New nuclear: from choosing technologies to building platform-scale industry

Nuclear power is entering a new phase of development. Until recently, debate has concentrated largely on the technology itself, particularly the design of new reactors and the merits of competing technologies. Yet recent developments suggest the focus is shifting, with the ability to finance and industrialise these technologies at a competitive cost moving to the fore.

The return of nuclear power is reflected in the emergence of new financing mechanisms and the return of private investors alongside governments. Announcements around the financing of Sizewell C in the United Kingdom, the structuring of the EPR2 programme in France, the commercial successes of Rolls-Royce SMR in the United Kingdom, the Czech Republic and now Sweden, as well as successive fundraising rounds by developers such as X-energy, Newcleo and Proxima Fusion, all point to this profound shift.

For large-scale reactors, strategies are increasingly being built around fleet economics. The EPR2 programme aims to recreate the benefits of series production through equipment standardisation, industrial continuity and greater visibility over future revenues. In the United Kingdom, Sizewell C marks an equally significant shift: the innovation lies not in the reactor – which is identical to Hinkley Point C – but in its financing. The adoption of the RAB (Regulated Asset Base) financing mechanism is intended to reduce the cost of capital by sharing risks more effectively between the state, consumers and private investors, thereby opening the way to a new class of long-term investors.

Innovative and smaller-scale reactor technologies – SMRs and AMRs – are following a path converging towards large-scale reactors. After an initial phase focused on technological demonstration, recent fundraising rounds show that investors are now financing industrialisation pathways designed to deploy fleets rather than just demonstrators. Companies able to secure industrial partnerships, commercial outlets and long-term financing are therefore gradually gaining the upper hand. The arrival of new buyers of low-carbon electricity, particularly major digital players facing surging data-centre demand, could also accelerate this transition by providing PPAs (long-term contracts) capable of securing revenues for the first projects.

This evolution is profoundly changing the sector’s sources of competitiveness. Reactor performance remains essential, but it is no longer, on its own, a decisive advantage. The ability to replicate a design, standardise equipment, secure fuel, organise a robust supply chain, attract abundant, low-cost capital and then deploy a fleet of reactors is becoming just as critical.

For Europe, the issue therefore goes beyond choosing between competing technologies. The continent has a recognised industrial base, unquestionable expertise in nuclear powerplant operations and the fuel cycle. However, it does not yet have capital markets as deep as those of the United States. The creation of the Scaleup Europe Fund is an encouraging sign, as is the France 2030 initiative in France. But these mechanisms primarily meet innovation financing needs; financing the transition from prototype to first commercial units is for the most part yet to be structured.

It is likely at this stage that the reality of the nuclear revival in Europe will be decided. The challenge today is to create the conditions that will enable the most credible projects to reach critical mass, namely: securing initial orders, financing first-of-a-kind projects and then facilitating the gradual transition from public capital and equity to debt and infrastructure investors. Without this financing continuum, Europe risks having the technologies but lacking the platforms capable of industrialising them.