It's not an exaggeration to say that the nuclear landscape has undergone a seminal shift in recent years. This change is captured perfectly by McKinsey & Company, a well-known global consulting firm.
In a 2021 McKinsey article on how to rapidly decarbonize the U.S. power grid, they predicted what amounted to a nuclear phaseout by 2050. They didn't appear to feel too differently in a January 2022 report on the net-zero transition.
Now, just 15 months after their January 2022 report, McKinsey sees that the tides have turned.
Geopolitics changed, climate realities became clearer—government officials and company executives realized that nuclear energy is a proven net-zero technology that can provide energy security, reliably and affordably power a clean grid, and decarbonize whole economies.
These factors have created a new reality for nuclear energy, and McKinsey recently posed an interesting question to the industry: “What will it take for nuclear power to meet the climate challenge?”
Modeling predicts that the global energy transition could require an additional 400 to 800 GW of new nuclear.
The group acknowledged the massive opportunity before the nuclear energy industry and identified key areas where attention is needed to fulfill the promise nuclear energy holds, including financing, workforce development, licensing processes, and supply chains.
McKinsey modeling now predicts a global scale-up of somewhere between 400 and 800 GW of new nuclear. In order to realize this significant increase, McKinsey estimates that nearly $500 billion per year in capital would need to go toward new reactors. Their analysis also suggests that the current nuclear workforce would need to grow to more than 5 million people worldwide.
When it comes to nuclear, the challenge isn’t demand—it’s being able to build quickly enough to meet demand. But McKinsey concluded that the roadblocks they identified can be overcome, and the scale-up required by the industry is achievable.
Estimates show a rapid scale-up of nuclear could cost roughly $500 billion per year in capital.
They’re not the only ones who are seeing the importance of more nuclear. Last year, Vibrant Clean Energy found that the lowest cost scenario for a carbon-free electric grid would require 300 GW of advanced nuclear, and the United Nations’ Intergovernmental Panel on Climate Change (IPCC) released a report calling for global nuclear energy generation to at least double by 2050 in order to hold the 1.5℃ global average temperature increase.
The Department of Energy (DOE) also recently announced their Pathways to Commercial Liftoff for clean energy technologies that are crucial for meeting decarbonization goals, and advanced nuclear is chief among them.
Echoing McKinsey, the DOE report found an increased need for nuclear, realizing that domestic nuclear capacity has the potential to triple by 2050, and recognized that there are challenges ahead but that the industry is well-equipped to meet them head on. In fact, the industry is already responding.
Recently, NEI polled utility members, who currently operate 80 of today’s 92 nuclear reactors in the U.S., and respondents found an expanded role for nuclear in their energy mix.
Analysis suggests that the nuclear workforce would need to grow to more than five million people worldwide in order to meet increased demand.
The demand for new nuclear is real, and there’s a clear consensus on the world stage—we cannot tackle the climate threat without the versatility, reliability, and affordability that clean nuclear power ensures. It’s up to the industry players, investors and policymakers to turn existing support into actual projects that will bring communities and businesses into the clean energy future.
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