Nuclear energy, one of the largest low-carbon sources of electricity, is set to grow exponentially in different parts of the world and as varying designs are prioritized and developed. A variety of factors contribute to this growth driven by potential acceleration of new technologies becoming scalable and commercialized. The fight against climate change and the importance of low-carbon sources of power should inevitably secure a market share for nuclear in the broader energy mix. 2022 was a landmark year in the history of nuclear energy, as it gained public appreciation for the first time since the Fukushima Daiichi accident in 2011.
Specifically, it appears more obvious that — even though the large-scale buildout of conventional nuclear plants will still occur in certain parts of the world — there could be more next generation-type reactors built in the next decade and after. Advanced fission, including small modular reactors (SMRs) and advanced reactors (ARs), as well as fusion, are set to shape the future of nuclear, sealing its role in the energy transition era and the broader mix as being a dispatchable low-carbon source of electricity.
There has been an overwhelming number of positive developments in the nuclear energy industry in the last five years. Regulatory policies have been shifting back to support existing nuclear capacity and investment in new and advanced projects, including in the U.S. as a result of the Bipartisan Infrastructure Law and the Inflation Reduction Act; in the EU with regulatory initiatives like the EU Green Deal Industrial Plan; and in other countries such as the UK, China, Japan, and Canada.
Such regulatory advancements can unleash public spending while also having a multiplicative effect that stimulates private funding — a trend currently observed in both advanced fission and fusion nuclear energy. Improving public sentiment around nuclear energy — likely due in part to the unreliability of renewable energy and the volatility of the fossil fuel commodities used for power generation in the last two to three years — is serving as another positive development for the energy source.
Both advanced fission as well as fusion nuclear energy are set to contribute to net-zero commitments globally. Overall, we anticipate that SMRs and advanced fission reactors will be commercialized sooner around the world (excluding Russia and China) than fusion energy. Russia and China have already commercialized fission AR/SMR concepts. Meanwhile, reactors based on fusion energy most likely will be commercialized in the middle to end of the next decade, with a number of successful private firms navigating the space.