Highlights
Highlights
Interest in nuclear energy has ebbed and flowed in the past few decades. We have seen several declarations of a ‘nuclear renaissance’ during this period, depending on prevailing public opinion around carbon emissions, energy security and nuclear safety, as well as country-specific issues.
Once again, sentiment for nuclear energy appears to be on the upswing. In the US, public support for nuclear is at a decade high.1 In Europe, the Council of EU member states and the European Parliament have officially classified nuclear as a strategic net-zero industry.2 Even Japan has restarted 12 nuclear reactors since the 2011 Fukushima disaster.3
The recent hype around generative AI and data centers4 adds another facet to the nuclear debate. Amazon recently acquired a data center that is 100 percent powered by nuclear,5 while media reports suggest that all the tech giants are increasingly looking to use nuclear to power their next generation of data centers.6
Today, renewable energy from wind, solar and energy storage simply cannot provide the same amount of uninterrupted carbon-free electricity 24/7 as nuclear to businesses such as data centers. Beyond providing electricity to homes and businesses, nuclear is also key to unlocking emerging technologies such as hydrogen production,7 nuclear desalination and indoor agriculture.
Nuclear has a cost problem
Nuclear has a cost problem
In their long-term forecasts, organizations, such as the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA),8 still show nuclear being a part of the 2050 energy mix. But the industry faces one simple but gigantic hurdle – cost. Currently, a new nuclear power plant is significantly more expensive to build and operate than other energy sources9, as the industry has been plagued by cost overruns.
For example, the recently commissioned Vogtle nuclear project in the US was USD 21 billion overbudget and delayed by seven years. The UK’s Hinkley Point project will be GBP 10 billion more than expected and four years behind schedule. Uranium prices have also quadrupled in recent years after the war in Ukraine started, adding to operating costs.
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Meet the members of the team responsible for UBS Asset Management’s strategic direction.