Nuclear power has remained a dormant force in U.S. electric generation capacity since the Cold War. Once perceived as the revolutionary technology of the next era, nuclear science has often been defined by advances in weapons technology rather than energy. Today, decades of innovation and a timely increase in U.S. electric demand have put nuclear back in the minds of policymakers as a potential long term energy solution.
Nuclear presents itself as a unique solution to the energy demand driven by data centers and other large-load industrial entities. For the first time, commercial energy demand is outpacing residential. AI facilities already make up five percent of total U.S. energy demand, potentially hitting a high of 17 percent by 2030. In a recent survey of 150 utility executives, 81 percent report that clients are requesting increases in production between 100 MW – 1 GW, and every respondent reported the need to increase production by similar amounts.
Compared to other energy sources, nuclear power’s ability to scale up to such large amounts of demanded power make it a promising solution to rising energy demand. Nuclear fuel is incredibly energy efficient, featuring a capacity factor of 92.5 percent, far more efficient than natural gas (60.5 percent), wind (34.3 percent), and solar (23.2 percent). Nuclear plants standout as an already efficient component of U.S. energy production; in 2024, nuclear energy represented 19 percent of total power generated while making up only eight percent in total operating capacity. Of all carbon-free power generation, nuclear makes up 55 percent.
However, incredible fuel efficiency and output potential has been a known aspect of nuclear power for decades. What has delayed nuclear progress is technology and cost. Utility executives surveyed indicate cost, regulation barriers, and safety concerns as the greatest barriers to entry. Nuclear energy projects are capital intensive, requiring between $12,300-$17,750 per kW. Additionally, slow construction and lack of standardized designs for reactors have brought into question the maturity of U.S. nuclear capacity and its readiness for generation expansion.
What truly raises nuclear energy as a potential significant source of future energy is the combination of technical advances and shift in federal policy. Passive safety systems have been made a priority in the Gen III reactors used in the U.S. today. Coolant innovations have seen a move away from water towards sodium and gas, allowing for reactors to operate at higher temperatures under safer conditions.
Breakthroughs in fuel have raised the bar on reactor efficiency. TRISO fuel represents the apex of these innovations; the fuel is comprised of enriched uranium enveloped by carbon and silicon carbide. This chemical shell contains the byproducts of nuclear fission, eliminating the need for containment structures. This breakthrough has significant ramifications for reactor design, allowing for much smaller and more efficient designs.
Perhaps the most defining innovation of the second nuclear age is the small nuclear reactor (SMR). This technology is exactly what it sounds like, a small nuclear reactor designed to output around 300 MW of electricity, significantly less than the traditional 1,000 MW nuclear reactors common across the United States. These reactors mitigate much of the barriers to entry posed by nuclear projects, such as high capex requirements and long construction periods. SMR’s can easily be assembled and moved onto smaller tracts of land than traditional plants. SMR’s have proven to be an incredibly attractive commercial idea, with foreign governments across the world pouring funding into SMR research. Currently, the only countries on earth with commercially operating SMR’s are China and Russia, while the U.S., Japan, and Canada have laid out plans for SMR projects.
Federal policy has also reorientated towards a more nuclear-friendly approach. Policymakers, understanding the challenges of meeting rising energy demands, while also pointing to decarbonization, have undertaken the challenge of rebuilding the U.S. nuclear industry. The DOE has made public it’s goals to extend the service life of the existing fleet of 93 U.S. reactors, as well create policy to help nuclear compete within the free market. The Reactor Pilot Program was created to help U.S. companies accelerate their progress in SMR construction by fast-tracking licensing. Three of these reactors have reached criticality as of July 2026.
Across the globe, nuclear energy is finally becoming a safe, efficient, and economically sound source of carbon-free energy. Nuclear technology has long been a revolutionary prospect, until now untapped. Now, innovation has caught up with our scientific knowledge, and the world may be on the cusp of a second nuclear age.
Written by Owen Williams, Public Policy Intern
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.