Beyond economics: The nuclear energy debate

There are several reasons why some governments and companies are reconsidering investing in nuclear energy production. The Russian gas crisis has shifted focus back on energy security. Then there’s the worsening climate crisis, with the clear inability to keep global warming within 1.5°C above pre-industrial levels, making the use of non-CO₂-emitting sources increasingly urgent. And the growing demand for electricity from data centers and new green technologies (such as electric vehicles) is raising concerns that power generation may soon fall short of demand. But among these reasons, the economic argument - namely the current cost of building nuclear power plants in Europe - does not seem to come up.

Between 2009 and 2024, the average Levelized Cost of Electricity (LCOE) for utility-scale solar photovoltaic plummeted from $359 to $61 per MWh, while onshore wind plunged from $135 to $50 per MWh. Over the same period, nuclear LCOE rose from $123 to $182 per MWh (World Nuclear Industry Status 2024), making it the most expensive utility-scale energy source. Added to this is the fact that building nuclear power plants tends to take much longer and cost far more than initially planned, compared to other major infrastructure projects. Here are some examples.

The most recent reactor to be connected to the grid in France, in December 2024, was Flamanville 3, coming 25 years after the previous one. Its construction took 17 years instead of the planned five, with a cost of around €13 billion - four times the original budget. Worst of all, the French Court of Auditors recently stated that the investment will never be recovered by EDF (the government-owned power company).

In March 2022, Finland connected the Olkiluoto 3 reactor to the electricity grid. It was the first next-generation EPR (European Pressurized Reactor) in Europe to become operational. Initially expected to take four years, the project took more than 16 due to technological issues and legal disputes. The final cost was around €11 billion, nearly triple the original estimate.

The UK’s Hinkley Point C nuclear power station was initially scheduled for completion in 2017 with a projected cost of £18 billion. The latest forecasts now suggest it may open in 2031, with a price tag of at least £35 billion. Another plant planned for Sizewell is currently on hold after the Chinese partner CGN was excluded from the project for security reasons. Back in 2020, the projected cost was £20 billion; now it’s estimated at £40 billion.

If we were to start building a nuclear power plant today, we’d need to compare the relative energy costs to the costs that renewable sources will reach in 10, 15, or 20 years. If the current LCOE trends continue, the comparison will be unsustainable. What’s more, these costs don’t yet factor in dealing with the nuclear waste produced by the plants.

Meanwhile, in 2024, renewables provided 47% of the European Union’s electricity (55% in Germany, 39% in Italy), compared to 29% from fossil fuels and 24% from nuclear energy. And investments in renewable technologies continue to grow worldwide, exceeding $700 billion in 2024, according to BNEF. That said, solar and wind technologies still face two major challenges: the intermittency of production and heavy reliance on China for key components. The first challenge can be addressed more effectively through investments in grid infrastructure and storage technologies, while the second calls for a more diversified supply of critical materials and technologies.

To sum up, any plan to relaunch nuclear power must contend with a rapidly advancing renewable sector, higher construction costs for nuclear plants, and increasingly urgent climate targets that demand faster timelines and greater flexibility.

Originally published in Fortune Italia