Energy Chief Praises Research Hub Trump Once Sought to Ax

The Energy Chief's recent praise for a research hub that was once targeted for elimination by former President Trump has sparked renewed interest and investment in nuclear energy. This shift in perception and policy has significant implications for the future of the nuclear energy sector, which is poised for a renaissance that could attract $1.5 trillion in capital investment through 2050.

The Energy Chief's endorsement of the research hub underscores the importance of nuclear energy in addressing major crises such as energy and climate change. By highlighting the potential of nuclear energy to provide stable and low-carbon baseload generation, the Energy Chief has helped to shift the narrative around nuclear power from one of safety concerns and high costs to one of stability and low-carbon generation. This shift in perception is crucial for future investment opportunities in the sector.



The renewed interest in nuclear energy is driven by several technological advancements and policy changes. One of the key technological advancements is the development of Small Modular Reactors (SMRs). According to the IEA report, "Nuclear Power and Secure Energy Transitions: From Today’s Challenges to Tomorrow’s Clean Energy Systems," SMRs are poised for rapid growth. In the Announced Pledges Scenario (APS), where all energy and climate policies are met in full and on time, more than 1,000 SMRs are expected to be deployed by 2050, with a total capacity of 120 GW. This involves a rise in investment in SMRs from USD 5 billion today to over USD 25 billion in 2030, with cumulative investment of USD 670 billion by 2050. The benefits of SMRs include lower power output and smaller reactor cores, which increase the effectiveness of passive safety systems and simplify reactor designs, potentially lowering costs.

Policy changes also play a significant role in driving investment in nuclear energy. For instance, the IEA report identifies several policy, regulatory, and market changes that could create new investment opportunities. One key recommendation is the need for new nuclear reactor construction costs to fall sharply. The report states, "The cost of building new nuclear reactors will be crucial to the future role of nuclear power in the global clean energy transition. At the cost assumptions in the NZE, nuclear plays a complementary role, contributing to system stability, expanding the suite of low emissions sources and stepping up where renewables are constrained." To compete directly with solar PV and wind power, the construction cost of new nuclear would need to be reduced to $2000/kW or less for capacity to be added in 2030.

Additionally, the report highlights the importance of carbon pricing in valuing the low emissions benefits of nuclear power. "The introduction of carbon pricing or an increase in the CO2 price has the effect of pushing up the cost of fossil-based generators, which raises the wholesale electricity price and increases the revenues received by nuclear plants without changing their costs." This policy change can make nuclear power more economically viable and attractive for investment.

Furthermore, the global push for decarbonization and the need for stable, low-carbon baseload generation are driving investment in nuclear energy. Morgan Stanley Research notes, "Nuclear energy can play a critical role toward decarbonization targets by providing stable and low-carbon baseload generation." This is supported by the targets set at the UN’s COP28 climate conference, which call for a tripling of nuclear capacity by 2050. Morgan Stanley sees global nuclear capacity doubling by 2050, with funding coming from government support via subsidies, tax schemes, and bond investors. This renewed interest and investment are expected to benefit everything from uranium mining and nuclear power generation to physical infrastructure and waste handling.

However, geopolitical tensions and international relations significantly impact the global nuclear energy market by influencing the flow of knowledge and investment, as well as the operational strategies of firms involved in international research collaborations (IRCs). For instance, political divergence between states can reduce the occurrence of IRCs, which are crucial for accessing a variety of knowledge resources. This effect is particularly pronounced for firms operating in high-tech industries, where knowledge sharing is essential for innovation and competitiveness. As noted, "political divergence decreases IRCs, and this effect is strengthened for firms operating in high-tech industries" (2025-03-18). Additionally, when conflict between two countries increases, IRCs are further reduced, especially for firms in politically aligned countries. This disruption in knowledge flow can hinder a firm's access to foreign knowledge, limiting its operational capabilities and the success of its operations strategy.

To mitigate these risks, investors can employ several strategies. Firstly, they can diversify their investment portfolios to include a mix of countries and regions, reducing reliance on any single geopolitical environment. Secondly, investors can engage in proactive risk management by closely monitoring geopolitical developments and adjusting their strategies accordingly. For example, firms may adjust their collaborations with foreign partners in response to geopolitical tensions, as seen in the case of the EU's decision to end research cooperation with Russia following its military aggression against Ukraine. This proactive approach can help firms mitigate the risk of government intervention and ensure the continuity of their operations.

Moreover, investors can focus on building strong relationships with local partners and stakeholders, which can provide a buffer against geopolitical risks. By fostering local partnerships, firms can gain a better understanding of the local political and regulatory environment, enabling them to navigate potential challenges more effectively. Additionally, investors can advocate for policies that promote international cooperation and knowledge sharing, as these can help create a more stable and predictable environment for nuclear energy investments. For instance, the IEA report highlights the importance of policy, regulatory, and market changes in creating new investment opportunities in the nuclear energy sector. By advocating for such changes, investors can help mitigate the risks associated with geopolitical tensions and ensure the long-term sustainability of their investments.

In summary, the Energy Chief's praise for the research hub has positively influenced public perception and support for nuclear energy, highlighting its role in addressing energy and climate crises. This shift in perception, coupled with the potential for significant investment opportunities, bodes well for the future of the nuclear energy sector. The development of SMRs, the need for cost reductions in new nuclear reactor construction, the implementation of carbon pricing, and the global push for decarbonization are all factors that are driving renewed interest and investment in nuclear energy. These technological advancements and policy changes are expected to continue to drive investment in the coming years, as the world seeks to meet its climate goals and ensure energy security.