error
Subscriptions are not available for this site while you are logged into your current account.
close
Skip to main content
Submit RFP

      Substantial amounts of funding are flowing into new nuclear projects globally – estimated at over $80 billion annually and rising. Investments into the total nuclear value chain could total $2.2 trillion by 2050. Currently, there are around 70 reactors under construction, 110 reactors in planning and a further 300 more are at proposal stage.

      It is no surprise that there was a mood of optimism and confidence amongst industry executives at the recent World Nuclear Symposium in London organised by the World Nuclear Authority (WNA), where it was highlighted that a nuclear renaissance is being sparked by a number of global trends.

      firla-cuchra-matt
      Matt Firla-Cuchra

      Partner at KPMG, UK Head of Water, Power & Utilities, Global Lead Nuclear Energy

      KPMG in the UK

      • New tech is fuelling the demand for electricity

        In particular, high-performance computing, EVs and heating solutions are contributing to an expected continuing boom. Hyperscalers such as Google and Microsoft are building energy-hungry new infrastructure which needs clean, reliable electricity at scale.

      • Nuclear offers stable and secure supply

        Nuclear gives the stability that systems need, providing the baseload with guaranteed reliability. Recent energy outages have underlined the fragility of systems relying on just one predominant energy source rather than a stable mix.

      • Geographical instabilities are driving energy safety concerns

        Nuclear provides secure, eco-friendly energy independent of other nations, which is increasingly being prioritised in today’s volatile geopolitical environment.

      Alongside this, new technology is opening up the art of the possible. There is considerable anticipation in the industry about the potential of small modular reactors (SMRs). The first SMR in the US is currently being built, while in the UK Rolls Royce has recently been selected as the preferred bidder to partner with Great British Energy – Nuclear to construct SMRs here. But there is innovation across the piece – improving for instance the efficiency of nuclear plants, reducing water usage, or introducing new cooling techniques.

      Moving to the next level: three key components

      These developments are encouraging – but I believe there is scope to do more to ensure nuclear truly fulfils its potential. Much of this centres on securing financing for big projects – because without that, expansion won’t happen. It is true that investment is being secured. Sizewell C, for example, is the first time that entirely private investors have taken a stake in large new nuclear in the UK. Prior to this, in June the World Bank announced that it is lifting its block on nuclear investment. However, it is now about converting these positive currents into an even stronger flow of investment and funding.

      In my view, investors need significantly more visibility over projects and much greater comfort levels over their likely success. There are three essential elements to enable this:

      We need to open up the ‘black box’ of nuclear projects

      Nuclear builds are highly complex undertakings, technologically as well as structurally due to the sheer amount of stakeholders involved (supply chain, governments, regulators etc) – this can give it a ‘black box’ feel. It’s essential to cast light on the process and open that black box up.

      This will enable financiers to better understand the risks, at what stage(s) these risks might apply, and what mitigations can be put in place.

      Clarity over risk is key

      It’s critical that the project owner builds a robust risk matrix that shows how the different parties to a project (investors, insurers, contractors, government, etc) will take a slice of the risk and how this will be appropriately priced. The tide is certainly moving towards lower levels of public money in nuclear amidst the expectation that private investors will shoulder more of the financing and, therefore, more of the risk. Risk allocation has become a critical question.

      At the same time, governments need to ensure they have a granular understanding of the risk and control dynamics in different scenarios as the project progresses.

      Investors need to be involved from the get-go

      Project developers and investors need to work with each other from the outset to find the right solutions.

      This should be an active process on both sides – it’s not about investors sitting back and waiting for the project developers’ proposal to be presented to them; this should be a co-creation process.

      There is huge opportunity ahead. A golden age of nuclear is a genuine possibility, not just a soundbite. The challenge facing the industry is to capitalise on this opportunity – and for that, transparency over processes, collaborative partnership models and crystal clarity over risk will be key.

      Our energy insights

      Something went wrong

      Oops!! Something went wrong, please try again

      Get in touch

      Read enough? Get in touch with our team and find out why organisations across the UK trust us to make the difference.

      Contact us
      Person smiling whilst using a mobile phone