Restarting the green energy transition in 2023: the nuclear option

Eye-watering energy prices and sweltering temperatures have led to a renewed focus on the transition to a greener energy mix. We think 2023 could see nuclear energy take greater prominence in that discussion.

Against a backdrop of high energy prices, some countries are reverting to emissions-intensive energy sources in order to secure supplies. But what about the long term? 

Want to go deeper? Listen to Fjordi Mulla, Alvaro Vivanco, and Caroline Haas discuss the big factors driving the transition to a more sustainable economy in 2023 in this special Year Ahead podcast on Spotify or Apple Podcasts.

Nuclear energy accounts for a tiny fraction of the global energy mix

The role of nuclear has taken on a more prominent role in discussions about a future, greener, energy mix. Nuclear energy is much cleaner from a carbon emissions perspective than other sources of power: it produces around three tons of greenhouse emissions per GW/hr of electricity, compared with 820 tons for coal, 720 tons for oil and 490 tons for natural gas. It even produces less emissions than solar and wind. What’s more, new, advanced reactors produce energy more securely, reliably, and cost-effectively than before. 

Nuclear energy is by far the cleanest available technology (tons of greenhouse gas emissions per gigawatt-hour of electricity)

Sources: NatWest Markets, Our World in Data

However, as of 2021, nuclear energy accounted for just 4% of global energy production – well behind oil, which accounted for close to a third of the total, natural gas, and coal. In fact, there are only a few countries where nuclear makes up a significant share of the energy mix. North America uses less nuclear power than Europe, while the share of solar and wind has gradually increased over the years and surpassed that of nuclear in 2017.  

Given their cost advantage, renewables will continue to play a critical role in the energy transition. But why does nuclear represent such a marginal source of global production? We think the main problems it faces are public concerns about its safety, high costs, a lack of political will and, ultimately, not enough investment.  

Nuclear and renewables are far safer than fossil fuels

Nuclear energy has a much better safety record than fossil fuels, which cause many more fatalities than nuclear and modern renewables per unit of electricity produced – around 1000 times more in the case of brown coal. If we consider deaths linked to air pollution, mortality rates from fossil fuels are likely to be even higher. Meanwhile, spent fuel, the main by-product of nuclear energy, is safely and securely stored at multiple reactor sites across the globe. 

Safety, though, remains at the core of the negative perception of nuclear. Historically low frequency, but highly visible, events such as Fukushima and Chernobyl have had a big impact on the public’s view of nuclear as a viable long-term source of energy. 

Public opposition to nuclear energy production

Sources: NatWest Markets, IPSOS MORI, Our World in Data

Efforts to harness nuclear’s potential are starting to increase

The recent global energy crunch has reignited the debate about the role of nuclear as a reliable source of power that produces limited carbon emissions; and it has led to a number of countries making concrete plans to increase their use:

  • In the UK, the Energy Security Strategy published in April set out new ambitions for nuclear energy. The strategy would see nuclear capacity of up to 24 GW by 2050, representing around 25% of projected electricity demand, up from 15% in 2022. Eight reactors would be built with the help of a new government body, Great British Nuclear, to speed up what has traditionally been a slow process.
  • In February, France announced plans to build six large new reactors starting in 2028 and eight more by 2050.
  • Poland has ramped up agreements and partnerships with countries beyond Europe, including the US, to build nuclear energy capabilities across the country.  
  • In the US, the Inflation Reduction Act complements the CHIPS Act’s acceleration of nuclear by including several tax credits and incentives to support the potential deployment of advanced reactors. The legislation also includes $700 million for the Office of Nuclear Energy to support the development of a domestic supply chain for uranium. 
  • Japan has restarted its nuclear reactors (they were all closed down after the Fukushima accident) and is looking to develop next-generation reactors that will be safer and more efficient. 
  • In July, South Korea’s government laid out its New Energy Policy Direction, which aims to ensure nuclear accounts for a minimum of 30% of the country’s energy mix by 2030. It is also resuming the construction of two units at existing nuclear plants. 

Meanwhile, nuclear technology is developing quickly. More than 20 companies in the US are currently developing advanced reactors that will completely change the way we think about the nuclear industry. Most of these new reactors will be smaller, more flexible, and less expensive to build and operate. They can be used to power hospitals or other service centres on an exclusive basis and, if used appropriately, have the potential to reduce energy reliance on countries like Russia.

More investment in nuclear energy could help develop the sector

Nuclear has great potential, but it is also expensive to build new nuclear power plants. In order to reach global net zero targets and diversify the energy mix, major investments are needed and new forms of support for technological breakthroughs need to be pursued. 

Thus far, investment in nuclear has been miniscule compared with the amount of money flowing into traditional renewables and related areas such as electrified transport. This is despite the considerable benefits that nuclear power provides, both in efficiency and emissions terms.  

How will the nuclear debate evolve in 2023?

In addition to the two primary challenges that we referred to – high costs and social perception barriers – increased adoption of nuclear in 2023 could be stymied by the move towards renewable alternatives. The relatively attractive prices of solar and wind power represent a significant feature of the green transition. And the arguments in favour of nuclear become less compelling when we factor in that management and engineering teams are scarce and nuclear power plant construction projects are running significantly behind schedule.

While decarbonisation plans have not been explicitly shelved this year, the recent focus for governments has been on dealing with more immediate priorities such as safeguarding energy security, job stability, low prices, and the smooth functioning of economies.  

How nuclear could grow

In our view, several developments are needed if nuclear is to play a bigger role in the global energy transition. Small, advanced reactors must become more prominent as their flexibility and practicality is not yet being fully exploited. Supply chain fluidity has to improve, and public perception about safety must be properly addressed: this requires public campaigns about nuclear’s safety track record and the benefits that come with technological improvement.

What’s more, governments should see nuclear not just as a solution to their climate transition plans. It is important for them to focus on using local resources and meeting their domestic population’s needs in order to build a sustainable, secure energy system. We believe that nuclear has an important role to play in the transition to a greener economy.

Get essential insights into the year ahead

Get more essential insights into the year ahead and speak with your NatWest representative to learn about how the biggest themes and events shaping 2023 could affect your strategy. 


This article has been prepared for information purposes only, does not constitute an analysis of all potentially material issues and is subject to change at any time without prior notice. NatWest Markets does not undertake to update you of such changes.  It is indicative only and is not binding. Other than as indicated, this article has been prepared on the basis of publicly available information believed to be reliable but no representation, warranty, undertaking or assurance of any kind, express or implied, is made as to the adequacy, accuracy, completeness or reasonableness of the information contained in this article, nor does NatWest Markets accept any obligation to any recipient to update or correct any information contained herein. Views expressed herein are not intended to be and should not be viewed as advice or as a personal recommendation. The views expressed herein may not be objective or independent of the interests of the authors or other NatWest Markets trading desks, who may be active participants in the markets, investments or strategies referred to in this article. NatWest Markets will not act and has not acted as your legal, tax, regulatory, accounting or investment adviser; nor does NatWest Markets owe any fiduciary duties to you in connection with this, and/or any related transaction and no reliance may be placed on NatWest Markets for investment advice or recommendations of any sort. You should make your own independent evaluation of the relevance and adequacy of the information contained in this article and any issues that are of concern to you.

This article does not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell any investment, nor does it constitute an offer to provide any products or services that are capable of acceptance to form a contract. NatWest Markets and each of its respective affiliates accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

NatWest Markets Plc. Incorporated and registered in Scotland No. 90312 with limited liability. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. NatWest Markets N.V. is incorporated with limited liability in The Netherlands, authorised and supervised by De Nederlandsche Bank, the European Central Bank and the Autoriteit Financiële Markten. It has its seat at Amsterdam, The Netherlands, and is registered in the Commercial Register under number 33002587. Registered Office: Claude Debussylaan 94, Amsterdam, The Netherlands. NatWest Markets Plc is, in certain jurisdictions, an authorised agent of NatWest Markets N.V. and NatWest Markets N.V. is, in certain jurisdictions, an authorised agent of NatWest Markets Plc. NatWest Markets Securities Japan Limited [Kanto Financial Bureau (Kin-sho) No. 202] is authorised and regulated by the Japan Financial Services Agency. Securities business in the United States is conducted through NatWest Markets Securities Inc., a FINRA registered broker-dealer (http://www.finra.org), a SIPC member (www.sipc.org) and a wholly owned indirect subsidiary of NatWest Markets Plc.

Copyright © NatWest Markets Plc. All rights reserved.

scroll to top