Revitalising Nuclear: The UK Can Power AI and Lead the Clean-Energy Transition

Tony Blair Institute for Global ChangePaper

2nd December 2024

By multiple experts (7)

Chapter 1

Executive Summary


Artificial intelligence is ushering in a new era of infrastructure and energy.

As data centres and compute are built at scale, they are driving an unprecedented demand for energy. In turn, the world is witnessing a massive mobilisation of capital towards clean technology. Geothermal, solar, wind and new forms of ocean power are being developed. But one of the most significant implications is that nuclear is back. Countries such as the United States, South Korea, Canada, France and Japan have all committed to new nuclear programmes, while the US is moving at speed to fulfil its ambition to be the pre-eminent AI superpower. If the United Kingdom wants to remain competitive, it needs to build at pace.

On 20 September 2024, Microsoft announced it was paying to reopen the Three Mile Island Unit 1 nuclear reactor.

[1]Link to footnote It was a symbolic announcement. The partial meltdown of the reactor’s counterpart, Unit 2, in 1979 was the beginning of the decline of nuclear power. After the Chernobyl catastrophe that followed, the world witnessed a slowdown of nuclear. The price of this slowdown is now clear: if the world had not turned away from nuclear after Chernobyl, energy-related CO2 emissions could have been 6 per cent lower in 2023, the same as taking 450 million passenger vehicles off the road for a year.

Renewed interest in nuclear is being driven by giant AI companies seeking to build vast data centres – using hundreds of megawatts of clean, firm power – in one place. However, in most geographies, connections are constrained and access to reliable power has become one of the primary bottlenecks to future AI growth. To resolve AI’s energy problem, large hyperscalers are turning to nuclear energy. As a source of clean power with high energy density that is always available, nuclear power has the qualities that AI companies are looking for.

In addition to Microsoft’s announcement, Google has committed to buying seven new small modular reactors (SMRs) from Kairos Power; Amazon
[2]Link to footnote has signed three deals to deploy SMRs across the US; and Oracle has committed to building three SMRs to power a gigawatt-scale data centre.
[3]Link to footnote These announcements come just weeks after White House officials met with leaders from AI and associated infrastructure companies to “ensure the United States continues to lead the world in AI”
[4]Link to footnote and pushed to triple the country’s nuclear-power capacity by the middle of the 21st century.
[5]Link to footnote

This new dawn for nuclear energy represents a significant opportunity for the UK. The country was the first to split the atom, pioneered the development of civil nuclear technology and hosted the world’s first commercial nuclear-power station. In 1965, there were 21 nuclear reactors within the country’s borders, compared to 19 in the rest of the world combined.

But this is not a story of decline; the UK has maintained strong expertise that can provide hope for the future. Nuclear is the most cost-effective way for the country to deliver net zero and, with the right action, it can be a leader in the next era of the nuclear industry.

The UK can harness innovative nuclear technologies to power its AI future, help decarbonise its industries and deliver low-cost electricity for its grids. It could become a leader in nuclear technology and expertise, providing good jobs and economic growth across the country, and forming strategic geopolitical relationships with the US and beyond.

For the UK to benefit, it needs a bold new strategy – designed for the future of the nuclear industry – with action across three core areas.

First, the UK should create a modernised, streamlined and efficient planning and regulatory regime for new nuclear technologies. This would reduce delays and enhance the standardisation required to unlock new low-cost projects at scale.

Recommendations to achieve this include:

Introducing new “AI growth zones” around the country, with simplified planning and environmental permitting applied to new nuclear plants for AI data centres.

Recognising new design approvals for nuclear technology from trusted international regulators such as the US, Canada, France and South Korea, to enable faster approvals of new designs through the UK regulatory process.

Requiring the Office of Nuclear Regulation (ONR) to regard approval of a single reactor as the basis for fleet approval, to standardise design across deployment.

Introducing a two-year limit for the ONR and Environment Agency to license nuclear reactors that are similar to previously licensed designs.

Second, the UK government should use the conclusion of its ongoing SMR competition to help kick-start the SMR pipeline. This would create options for government procurement of SMR capacity for the grid or public compute.

Recommendations to achieve this include:

Having Great British Nuclear partner with AI hyperscalers to create a single entity that pools data-centre demand for a small fleet of Gen III and Gen IV reactors, and provides financing for their deployment.

Third, the government should deepen the UK-US partnership on SMR and the deployment of advanced modular reactors (AMRs), also known as Gen IV reactors, including cooperation on fuels, financing and supply-chain development.

Recommendations to achieve this include:

Developing a co-financing partnership with the US to drive an international orderbook of a particular SMR or AMR design or set of designs, expanding the potential pool of off-takers and investors, and aggregating a broader suite of private and public financing tools. Such cooperation can mitigate risk, pool sufficient capital to drive an orderbook and stimulate private investment in supply chains and workforce skills.

Establishing ways for the UK and US governments to work together to provide industry assurances of a robust transatlantic fuel supply chain, through trade agreements promoting procurement of fuel services.

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Revitalising Nuclear: The UK Can Power AI and Lead the Clean-Energy Transition