What do Microsoft founder Bill Gates, climate scientist James Hansen, legendary venture capitalist Fred Wilson and the governments of Germany and Japan have in common? They are all exploring how nuclear power can be a part of the transition to a net zero world.

What a difference a decade makes. After the 2011 Fukushima crisis, nuclear power seemed to be facing possible extinction after Japan and Germany pledged to phase out nuclear energy. Now, everything is changing for three main reasons; a global energy crisis caused by Russia’s invasion of Ukraine, an evolving understanding of the role nuclear power can play in helping battle climate change, and advances in technology enabling smaller nuclear plants.

In late August, Japan said it will restart idled nuclear plants and may develop next-generation reactors, something unimaginable after a tsunami caused a nuclear meltdown at Fukushima. Japan’s short-term motive is ending its reliance on Russian oil. Long-term, it’s a step toward a fossil fuel-free world. And, in a policy reversal, Germany is expected to prolong the use of three nuclear power plants because bans on Russian oil and natural gas have made it possible that millions of Europeans may be unable to afford to heat their homes this winter.

Many in Generation X and Baby Boomers — the generations of my parents and most of their peers — understandably think of nuclear energy with dread. They grew up in a Cold War society fearing nuclear annihilation, and have vivid memories of nuclear accidents near home at Three-Mile Island, and in far away places like Chernobyl. 

Putting Past in Perspective

But for many of my generation, the kids of Gen X, harnessing nuclear energy is an idea worth consideration. We can put those earlier nuclear disasters in perspective, mindful that the larger, looming catastrophe we face is climate change. Long after the Baby Boom generation has passed on, our generation and our children will inhabit a still-heating planet where we still pump carbon dioxide emissions from fossil fuels into the atmosphere.

To be sure, nuclear energy needs to be tightly managed. Corruption and ignorance played a part in past disasters and Russia’s bombardment of a nuclear plant in Ukraine highlights ongoing security concerns. But technology has advanced, and our outlook must evolve, too. 

This shift in attitudes has boosted nuclear stocks. Significant investment is making nuclear facilities more agile, faster to build and bring online and, ultimately, safer. Regulations are also helping. Stocks of nuclear power providers have outperformed the broader stock market lately. Outperformers include Constellation Energy ( CEG ), NRG Energy ( NRG ), Xcel Energy ( XEL ) and Entergy Corp. ( ETR ), which all outpaced the broad S&P 500 Index over the summer. Helping their advance has been the Inflation Reduction Act, which includes a subsidy for nuclear plants, including “production tax credits” to existing plants.

Why is Washington supporting nuclear energy in a law aimed at tackling climate change? Because the sun doesn’t shine at night and wind turbines only operate efficiently within a narrow range of wind speeds. That means we need something paired with renewables for reliability. One option is natural gas-fired peaker plants that burn fossil fuels. Or we could develop better batteries to efficiently store solar and wind power for when it is needed, or employ another form of clean energy, such as nuclear power. As policymakers consider these choices, nuclear is overcoming some of its long-standing constraints through innovation. 

For Nuclear, Smaller is Better

Smaller nukes can now be built within existing electrical facilities to replace coal-burning plants. These space-efficient plants require less time for regulatory approval and are safer, requiring less oversight. The “tiny nuclear” movement (which shares its ethos with the distributed solar movement) has attracted investment from private firms testing new designs. 

And two of the world’s smartest guys (a Boomer and a member of the Greatest Generation) are also betting on tiny nukes. Bill Gates’ Terrapower and Warren Buffett’s PaciCorp are partnering to build a facility on the site of a Wyoming coal-fired power plant. The 345-megawatt reactor would be the smallest commercial U.S. nuclear plant and could power 400,000 homes. Terrapower believes its design can enable faster licensing and construction, and position it to go live on the power grid in 2028. Through U.S. Department of Energy grants and other incentives, Washington has committed $1.9 billion to the project.

Public pressure triggered by Three-Mile Island in 1979, amplified by Chernobyl in 1986 and hammered home by Fukushima in 2011 caused the nuclear industry to retrench. But these disasters were unique and had limited consequences. Since Three Mile Island, there have been few notable U.S. nuclear incidents even as nuclear provides some 20% of our electricity. Chernobyl was caused by negligence while Fukushima was located near an undersea fault line. A common element of all three is how few humans were sickened or died. 

The long-term safety record of nuclear energy was among the reasons why in 2020 the Democratic party changed its position regarding nuclear energy to favor “all zero-carbon technologies, including hydroelectric power, geothermal, existing and advanced nuclear, and carbon capture and storage.” This was the first time Democrats have backed nuclear since 1972 and today both parties are backing nuclear.

Even climate scientist James Hansen has called nuclear power one of the best means for rapidly reducing greenhouse gas emissions. Meanwhile, nuclear energy costs pennies on the dollar compared to fossil fuels. And while the sun gives away its energy for free, we’ve yet to figure out an efficient way to harvest, store and transport electricity from it at scale. 

Technology could yet push nuclear energy to new advances. Legendary venture capitalist Fred Wilson has put out a call for novel ideas to advance nuclear energy. “I’ve been looking into nuclear reactors and batteries with the lens of how small is possible,” the famed investor wrote on his blog. “Could we make a nuclear reactor or battery that fits in our home? Could we make a nuclear reactor or battery that we carry with us like a phone? I know these ideas seem preposterous but … often we bump into something else along the way that is even more interesting.”

With enthusiasm like this from Wall Street, climate scientists and leading governments from Washington to Tokyo, it seems like nuclear power is getting a new lease on life.

Mareks Zeile, a Kent Denver high school senior, has been an investor since age 10 and has always had a keen interest in climate science and technology.

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Mentioned in this Article
Constellation Energy Corporation
Entergy Corp.
NRG Energy Inc.
Xcel Energy, Inc.