Investment in nuclear energy is necessary to meet our climate, energy, and security goals. That’s why it’s so important to know what the latest is.
Want to learn more about what is going on with investments in nuclear energy? We’re asking the expert, Benton Arnett, NEI’s senior director for market and policy.
What role does finance play in clean energy?
As we think about the energy transition, you know, that transition is going to require a massive deployment of new infrastructure. And deploying that infrastructure is going to require a lot of capital. And I really don't think we can talk about having an energy transition or combating climate change without having finance at the table. When we look at McKinsey and Company, which released a report in 2020 to around what it's going to actually cost to finance this energy transition, they found we're going to need about $9 trillion per year all the way up to 2050 in global investment to achieve those goals. That's nearly $275 trillion in total investment. The opportunity is massive, but the need is also massive to make sure that we have these capital providers at the table.
Is nuclear energy a smart investment?
I think nuclear energy is a necessary investment. So, when we look at what the IPCC says about it, which is the climate arm of the United Nations, they identified the need for $100 billion worth of annual investment globally into nuclear if we're going to achieve our goals. And not only is this investment necessary just to achieve our climate goals, it's necessary to make sure that we're on one of the cheapest pathways to achieving our climate goals.
So, a couple of years ago, Vibrant Clean Energy put together a report that identified that if nuclear energy is included in the transmission mix as the U.S. looks to decarbonize, we'll actually save our ratepayers about half a trillion dollars. And so, yeah, I think we're at a point where we can't afford to not invest in nuclear energy.
What are the types of investments that the nuclear industry needs right now?
We're going to need all types of investment. So, when we look at the nuclear supply chain and the opportunities there, we're going to need investments in our existing fleets to keep that carbon free power flowing. We're going to need investments in our supply chain so we can support the build out of new reactors. We're going to need investment in the kinds of projects and delivery models that we think are needed to deploy these new nuclear facilities.
So, it's really across the board. And I think that's going to encompass, you know, some of the more traditional investors we've seen in this space, and also entirely new classes of investors who maybe have not been familiar with nuclear in the past, but are getting interested in this growing opportunity.
What are you hearing from Wall Street?
I can honestly say that this is the most interest from Wall Street I've ever seen in nuclear energy. I think there's a couple of factors for that. I think when we look at the growing need of decarbonization and the need for investment in this energy transition, we're increasingly looking at technologies that can deliver, you know, clean, reliable power.
Nuclear is second to none in that category. And so, I think Wall Street's really coming around to that. They're really identifying and realizing that that need and that's driving a lot of interest. But also, we're seeing really unprecedented customer demand. So, when we think about the large tech firms, we think about the industrial sector, all these sectors are looking for that clean, reliable power today.
So, when we combine those two pictures, it really creates this massive opportunity for investment. And so, you know, a big part of NEI's goal right now has been to improve our relationship with the financial community, because we know that that those investment decisions are on the horizon and we want to make sure that they're ready and prepared when they come available.
I think the next step in this process, though, is that we're going to need to move from identifying that this is a really great opportunity and ideally identifying that conceptually it's something that needs to happen and we need to get to a place where capital is actually flowing to real projects, and we see some examples of that today, but if we're going to meet the 200 gigawatts of new nuclear energy, the Department of Energy says that we need, that's going to have to ramp up massively. I think that relationship that we're developing with Wall Street is only going to grow in the near future.
What is driving Wall Street’s interest in nuclear?
Well, I mentioned a lot of interest that's being driven by some of these new customers that are entering the space and the need to combat climate change. So, maybe a better way to answer that question is just to talk about some of the changes that we've seen in some of the public discourse around nuclear and around the energy transition.
I think one really great place to start with that is the most recent COP 28. So, you know, for many years, nuclear was excluded from COP. And now in 2023, we had COP 28, which was dubbed the nuclear COP. You know, we had a number of countries come together and agree to triple nuclear. And we had just a large interest in how nuclear can help drive decarbonization in countries.
So that really was, I think, a big change in the conversation. I think we're also seeing this interest manifest in other events as well. NEI hosts this Nuclear Financing Summit every year, and this past year, our summit was oversubscribed with the most interest we've ever seen and, you know, had standing room in the back. So, it was really exciting to see that kind of interest that we're hearing in these conversations really come to fruition at an event.
And then the last place I'd mention is CERAWeek where, you know, we saw nuclear just three years ago playing a pretty small role in the event. Now we have a lot of programing around nuclear coming up for CERAWeek. We can expect that trend to continue well into the future as well.
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