The dramatic energy price surge triggered by the Middle East conflict reignited debates about nuclear energy on Monday, as advocates of the technology pointed to the crisis as evidence for the importance of maintaining reliable, geopolitically insulated baseload electricity generation capacity. Countries that had maintained or expanded their nuclear capacity were in a significantly better position to absorb the gas price shock than those that had prematurely closed nuclear plants, drawing fresh attention to decisions made about nuclear capacity in the years since the 2011 Fukushima accident.
France, which generates approximately 70% of its electricity from nuclear power, entered the current crisis with a significant structural advantage over its European neighbours. French electricity prices, while affected by European gas market dynamics through the interconnected electricity grid, are partially insulated by the baseload generation capacity provided by nuclear plants that do not depend on imported gas or oil. The current crisis provides a powerful practical demonstration of the energy security benefits that nuclear power, controversial as it is, can provide for countries that operate it at scale.
Countries that made decisions to accelerate the closure of nuclear plants, including Germany, face a more exposed position in the current crisis. Germany’s decision to close its remaining nuclear plants, finalised in 2023 after years of debate, has left the country more dependent on imported gas for power generation and industrial heat than would otherwise be the case. Higher gas prices therefore hit Germany’s electricity and industrial sector harder than they would have with nuclear capacity still in operation, providing ammunition for critics of the country’s nuclear exit decision.
The nuclear debate was further complicated by the announcement that the military conflict could last for several more weeks. If gas prices remain elevated at their new levels for an extended period, the economic case for nuclear power investments becomes substantially stronger. New nuclear capacity, which requires very long lead times and very high upfront capital costs, cannot be quickly built in response to a crisis. However, the crisis does provide fresh evidence for the economic and strategic value of the nuclear capacity that already exists and for the case for extending the lives of plants approaching their original retirement dates.
Small modular reactors, which have been the subject of significant investment and development activity in recent years, also received renewed attention in the context of Monday’s crisis. These smaller, more flexible nuclear designs promise shorter construction times and lower upfront costs than conventional large nuclear plants, potentially making nuclear power more accessible to a wider range of countries and energy systems. Whether these technologies can be deployed at sufficient scale and speed to make a meaningful contribution to energy security in the medium term is uncertain, but the current crisis provides additional motivation for accelerating their development.