Introduction
The rapid growth of artificial intelligence (AI) is driving unprecedented electricity demand, creating a pressing need for large-scale, sustainable energy solutions. As coal plants continue to be phased out in the global transition toward cleaner energy, nuclear power emerges as a key alternative, offering reliable, low-emission electricity generation capable of meeting escalating demands.
Energy Resource Cost Comparisons
AI-driven industries, particularly data centers, require a stable, uninterrupted power supply. Nuclear power is uniquely suited to meet this need, with an operational capacity factor nearly twice that of coal and greater reliability than intermittent renewables such as solar and wind. While nuclear plants require large initial capital investments, their long-term operating costs are significantly lower, resulting in a more favorable lifetime cost compared to coal or natural gas. These plants also last more than twice as long as renewable sources like wind and solar which have average lifespans of about 20 years compared to more than 40 years for nuclear.
Forecast of New Nuclear Reactors
Worldwide, the number of operational and under-construction nuclear reactors is projected to grow significantly by 2030. Leading this expansion are China, Russia, and India, which are actively building large-scale nuclear reactors to meet domestic energy demands and support economic growth. China is particularly aggressive, with 30 reactors under construction and more planned, aiming to double its nuclear capacity by 2030. Meanwhile, Russia continues to deploy more of its VVER reactors and is exporting its technology globally, while India is prioritizing nuclear power as a core element of its clean energy strategy with multiple reactors currently in development.
Nuclear Reactor Construction Timeline
The primary barrier is the lengthy development timeline for traditional nuclear plants, which averages seven years, including feasibility studies, regulatory reviews, and site construction. These extended timelines pose challenges in meeting immediate energy needs, especially in rapidly evolving sectors like AI. Therefore, while traditional large-scale nuclear reactors can increase electricity supply with minimal new emissions in the long-term, they may not be a practical solution in the near-term.
The Emergence of SMRs
To overcome this near-term challenge, small modular reactors (SMRs) are emerging as a transformative technology in nuclear energy. SMRs boast shorter construction times (under three years), reduced capital costs, and enhanced flexibility. Their smaller size allows deployment in regions with limited resources and infrastructure, while advanced safety measures and reduced emergency planning zones address public concerns over nuclear risks.
SMRs are at various stages of development globally, with several designs in operation or under construction. The modular nature of SMRs enables rapid integration into existing energy grids, providing an adaptable and cost-effective solution for meeting localized energy demands. The United States, despite its limited investment in traditional reactors, leads in SMR innovation, contributing to nearly half of the world’s modular reactor designs.
SMRs are poised to play a pivotal role in supporting energy-intensive industries, particularly AI-driven data centers, by offering a scalable and sustainable energy source. The modularity and rapid deployment capabilities of SMRs make them an ideal solution for addressing the dual challenges of growing energy demand and sustainability goals. Leading energy countries (e.g., U.S., Russia, China) are accelerating these projects, underscoring the potential of SMRs to play a significant role in future energy systems.
The U.S. Department of Energy (DOE) heads the support of SMR development. In 2012, the DOE launched a 5-year, $452M SMR Licensing Technical Support (LTS) program where it would provide grants for up to half the cost of a project. In addition, the DOE set up the Advanced Research Projects Agency – Energy (ARPA-E) in 2007 with a focus on high-potential energy technologies still in early stages of development, such as its fission program to research microreactor technologies for below 10 MW capacities. Aside from government support, U.S. SMR investments are being advanced in the private sector through the SMR Start consortium of developers and potential customers (e.g., Bechtel, Fluor, Dominion, Duke Energy, GE Hitachi Nuclear Energy) that was founded in 2016
In China, the China National Nuclear Corporation (CNNC) controls most nuclear R&D. While the country has mostly focused on building out traditional reactor infrastructure, there are developments in SMRs led by organizations such as Chinergy and China Guodian Corporation.
As AI accelerates global energy consumption, nuclear power—bolstered by advancements in SMRs—offers a reliable and sustainable solution. Countries like China and Russia are advancing traditional nuclear projects, while the U.S. focuses on modernizing infrastructure and leading innovation in SMRs. The adoption of SMRs has the potential to revolutionize the nuclear energy landscape, making it a cornerstone of future energy systems that balance growth with environmental stewardship.
For more in-depth insights into energy trends and their intersection with AI, visit Red Chalk Group’s resources on cutting-edge developments in the industry.
About Red Chalk Group
Red Chalk Group is a boutique professional services firm focusing on advising senior management on issues related to top-line growth, disruptive technology, key mega-trends, and related intellectual property. Our firm delivers strategies related to new revenue platforms, emerging and disruptive technologies, industry & competitive analysis, merger & acquisition/investment support, and IP analysis and transaction services. Red Chalk Group has helped business leaders address their greatest challenges, issues, and opportunities at the most senior levels.
Sources:
- International Energy Agency, “Projected Costs of Generating Electricity”
- U.S. Department of Energy, “U.S. Capacity Factor by Energy Source”
- World Nuclear Association, “Plans For New Reactors Worldwide”
- International Atomic Energy Agency, “Nuclear Power Reactors in the World” (2024 Edition)
- International Atomic Energy Agency, “Project Management in Nuclear Power Plant Construction: Guidelines and Experience”
- International Energy Agency, “Projected Costs of Generating Electricity”
- World Nuclear Association, “Small Nuclear Power Reactors”
