The Next Nuclear Renaissance?

Will a new wave of nuclear power projects deliver the safe and economical electricity that proponents have long predicted?

CATO Institute, Fall 2025, By Steve Thomas

Over the past decade, there has been a growing interest in building new nuclear power stations, particularly among policymakers. This comes some two decades after a previously forecast “nuclear renaissance” petered out, having produced few orders, all of which went badly wrong.

This article reviews the previous renaissance: What was promised, what was delivered, and why it failed. It then considers the current claims of a new renaissance led by Small Modular Reactors, forthcoming “Generation IV” designs, new large reactors, and extending the lifetime of existing nuclear plants. Despite the need for clean generation, the growing demand for electricity to power new technologies and global development, and claims of nuclear generation breakthroughs that are either here or soon will be, this new renaissance appears destined for the same failure as the previous ones.

The Last Renaissance

Around the start of this century, there was a great deal of publicity about a new generation of reactors: so-called Generation III+ designs. These would evolve from the existing dominant “Gen III” designs—Pressurized Water Reactors (PWRs) and Boiling Water Reactors (BWRs), collectively known as Light Water Reactors (LWRs)—rather than be radical new designs. There was no clear definition of the characteristics that would qualify a design as Gen III+ rather than just Gen III LWRs. However, Gen III+ was said to incorporate safety advances that would mitigate the risks of incidents like the 1979 partial meltdown at Three Mile Island (a Gen II design) and the 1986 Chernobyl meltdown (a Soviet design that used Gen I/II technology). Three Gen III+ designs received the most publicity: the Westinghouse AP1000 (Advanced Passive), the Areva EPR (European Pressurized Water Reactor), and the General Electric ESBWR (Economic Simplified Boiling Water Reactor).

The narrative was that Gen III designs had become too complex and difficult to build because designers were retrofitting safety features to avoid another Three Mile Island. Gen III+ supposedly went back to the drawing board, rationalizing existing systems and incorporating new safety features, thereby supposedly yielding a cheaper and easier-to-build design. A particular feature of these designs was the use of “passive safety” systems. In an accident situation, these did not require an engineered safety system to be activated by human operators and were not dependent on external sources of power; instead, the reactor would avoid a serious accident by employing natural processes such as convection cooling. These had an intuitive appeal, and a common assumption was that because they were not mechanical systems, they would be cheaper, and because they involved natural processes, they would never fail. Neither assumption is correct.

Another major safety feature resulting from the Chernobyl disaster was a system that, if the core was melting down, prevented the molten core from burning into the surrounding ground and contaminating it. A common approach was a “core-catcher” (already used in a few early reactors) that would be placed underneath the reactor. An alternative, often used for smaller reactors, was a system to flood the core with so much water that it would halt the meltdown.

After the September 11, 2001, terrorist attacks, designers attempted to further increase safety by strengthening the reactor shell so it could withstand an aircraft or missile impact. The core-melt and aircraft protection features inevitably tended to increase the size and complexity of the Gen III+ designs.

Nuclear advocates also claimed that the large cost and time overruns of previous plants were caused in part by the high proportion of work carried out on site. To combat this and the additional complexity noted above, designers vowed to rely more on factory-made modules that could be delivered by truck, reducing sitework mostly to “bolting together” the pieces. In practice, there was significant variability between the Gen III+ designs, with the AP1000 and ESBWR relying much more on passive safety and modular construction than the EPR.

What sold these designs to policymakers were some extraordinary claims about construction costs and times. It was claimed that their cost (excluding finance charges; so-called “overnight cost”) would be around $1,500–$2,000 per kilowatt (kW), meaning a large, 1,000-megawatt (MW) reactor would cost $1.5–$2 billion. Construction time would be no more than 48 months. While there were few existing nuclear projects then to compare the new designs with, these projected costs and times were far below the levels then being achieved with existing designs.

These claims convinced the US government, under President George W. Bush, and the UK government, under Prime Minister Tony Blair, to launch large reactor construction programs. As those countries were two of the pioneering users of nuclear power, this appeared to be a strategically important victory for the nuclear industry.

US / In 2002, President Bush announced his Nuclear 2010 program, so-called because it was expected the first reactor under the program would come online in 2010. It was assumed the new nuclear designs would be competitive with other forms of generation,………………………………………..

In states with regulated electricity markets, utilities were concerned that regulators might not allow them to recover their costs from consumers if there were time and cost overruns. Most of the other projects were abandoned on these grounds, leaving only two to enter the construction stage: a two-reactor project to join an existing reactor at the V.C. Summer plant in South Carolina, and a two-reactor project to join two existing reactors at the A.W. Vogtle project in Georgia. All four new reactors would be Westinghouse AP1000s.

In those two states, regulators gave clear signals that the utilities would be allowed to recover all their costs. The state governments broke with regulatory practice by passing legislation allowing the utilities to raise rates and start recovering their costs from the date of the investment decision, not the date when the reactors entered service…………………………………………….

Consumers started paying for the reactors in 2009–2010, even though construction didn’t start until 2013. By 2015, both projects were in bad shape, way over time and budget. Westinghouse, then owned by Toshiba of Japan, was required to offer fixed-price terms to complete the projects. Those prices soon proved far too low, and in March 2017 Westinghouse filed for Chapter 11 bankruptcy protection. The whole of Toshiba was reportedly at risk as a result. In August 2017, the V.C. Summer project was abandoned. The A.W. Vogtle project continued, and the first reactor was completed in July 2023 with the second unit following in April 2024, six or seven years behind schedule and at more than double the forecasted cost. There are now no proposals for additional large reactor projects in the United States.

UK / In 2003, a UK Energy White Paper (DTI 2003) concluded there was no case for nuclear power because renewables and energy efficiency measures were cheaper. According to the report, “the current economics of nuclear power make it an unattractive option for new generating capacity and there are also important issues for nuclear waste to be resolved.” Only three years later and despite the lack of evidence that nuclear had become cheaper or that renewables and energy efficiency had become more expensive, Blair reversed the government’s position, claiming nuclear power was “back on the agenda with a vengeance.”

As with the US program, the assumption was that the new designs would be competitive. A key promise that made the program politically acceptable was there would be no public subsidies. Politicians—even those who were favorable to nuclear—were aware that previous UK nuclear projects had gone badly and the costs of this had fallen on taxpayers and electricity consumers. The energy minister told a Parliamentary Select Committee:

There will be no subsidies, direct or indirect. We are not in the business of subsidizing nuclear energy. No cheques will be written; there will be no sweetheart deals.

This promise of no subsidies remained government policy until 2015, despite it being clear long before then that new nuclear projects were only going forward in anticipation of large public subsidies……………………………………………………………

Three consortia were created, each led by some of the largest European utilities………………………………………………….. As early as 2007, the consortium led by EDF established a leading presence, with the CEO of EDF Energy, Vincent de Rivaz, notoriously claiming that Christmas turkeys in the UK would be cooked using power from the Hinkley Point C EPR in 2017. In 2010, the UK energy secretary still claimed Hinkley would begin generating no later than 2018.

The Final Investment Decision (FID) for Hinkley was not taken until October 2016, when it was expected the two reactors would be completed by October 2025 at an overnight cost of £18 billion (in 2015 pounds sterling, equivalent to $35 billion in today’s dollars). ……………………………………………..In January 2024, EDF issued a new cost and time update—its fifth—with completion now expected to be as late as 2032 at a cost of £35 billion (in 2015 pounds sterling, equivalent to $68.7 billion in today’s dollars). As a result, EDF wrote off €12.9 billion ($14 billion) of its investment in Hinkley Point C in 2023. By 2018, EDF recognized the error it made in accepting the risk of fixing the power price, and it abandoned plans for an EPR station at Sizewell using the Hinkley C financial model. In July 2025, an FID was taken on the Sizewell C project using a different financial model and completion is not expected before 2040.

The effect of the 2011 Fukushima, Japan, nuclear plant disaster, where a tsunami resulted in meltdowns in three reactors, combined with the effect of competition in wholesale and retail markets in electricity meant that European utilities could not justify to their shareholders the building of new reactors. The Horizon and Nugen consortia were sold to reactor vendors Westinghouse and Hitachi–GE, respectively. Those firms did not have the financial strength to take significant ownership stakes in the reactors, but they saw this as an opportunity to sell their reactors on the assumption that investors could later be found. Westinghouse (then planning three AP1000s for the Moorside site) filed for Chapter 11 bankruptcy protection in 2017. Hitachi–GE abandoned its two projects (four ABWRs, two each at Wylfa and Oldbury) in 2019 when it became clear that, despite the UK government offering to take a 30 percent stake in the reactors and to provide all the finance, other investors were not forthcoming.

Lessons learned / Thus ended the last nuclear renaissance. Its failure does not determine the outcome of the present attempt, but there are some important lessons that will shape the outcome this time:

While governments have always had to play a facilitating role in nuclear power projects, such as providing facilities to deal with the radioactive waste, they were centrally involved in the 2000 renaissance. This trend has continued, and governments are now offering to provide finance, take ownership stakes, offer publicly funded subsidies, and impose power purchase agreements that will insulate the reactors from competitive wholesale electricity markets.

Forecasts of construction costs and times made by the nuclear industry must be treated with extreme skepticism. The claim that the new designs would be so cheap they would be able to compete with the cheapest generation option then available—natural gas generation—proved so wide of the mark that other claimed characteristics, such as supplying base-load power and offering low-carbon generation, are now given as the prime justifications for the substantial extra cost of nuclear power over its alternatives.
The technical characteristics claimed to give advantages to the Gen III+ designs (such as factory-manufactured modules and passive safety) have not been effective in controlling construction times and costs.
The large reactor designs now on offer are the same ones that were offered previously. No fundamentally new designs have started development this century. It is hard to see why these designs that have failed by large margins to meet expectations will now be so much less problematic……………………………………………… https://www.cato.org/regulation/fall-2025/next-nuclear-renaissance#small-modular-reactors