InterSectors

Christina

Energy demand from AI, data centers and heavy industry is surging, while governments are pushing to quadruple global nuclear capacity by 2050. Advancements in nuclear technology, including small modular reactors, promise reliable, low-carbon power on and off the grid. Yet even with growing public support and regulatory reform, continuing concerns with safety frameworks, liability regimes and first-of-a-kind risks create challenges for nuclear projects striving to reach bankability. In this episode, we explore how evolving technology, regulation and risk allocation, together with creative public-private partnerships, are making nuclear investable.

Welcome to InterSectors, where White & Case partners and senior advisors bring their diverse legal perspectives to complex topics at the intersection of industries and markets.

I'm Christina England-Livengood, a partner based in Washington, DC. My practice focuses on nuclear regulatory and policy matters in addition to project finance, drawing on nearly 16 years of government experience at the US Nuclear Regulatory Commission and the Department of Energy. And today I'm joined by Simon Stuttaford, a partner based in London, and Ximena Vásquez-Maignan, a special advisor and nuclear practice lead based in Paris.

Simon and Ximena, thank you for joining me. Can you please each give me an overview of your background and experience?

Simon

Hello, I'm Simon Stuttaford. I'm an energy regulatory lawyer. My practice focuses on energy and infrastructure regulation with particular experience in the nuclear sector and advanced nuclear technologies. I have approximately 20 years working in the nuclear sector, largely private practice, but also industry experience, both in a new-build project in the UK and also managing decommissioning projects on behalf of a US nuclear services company.

Ximena

Hi, I'm Ximena Vásquez-Maignan. I'm a project finance lawyer with more than 20 years' experience in the nuclear sector. I have worked with EDF, the first worldwide operator in number of reactors, but I have also worked at the OECD Nuclear Energy Agency for 11 years, where I was the head of the Office of Legal Counsel.

Christina

So, let's start with some basics, because even sophisticated investors and people involved in the energy industry often do not know how today's nuclear sector looks different to the one that they read about in the headlines 20 years ago. So, Simon, I want to start with you. Can you describe the global energy demand and the why nuclear case? Why are we here, and why are we talking so much about nuclear at this moment in time?

Simon

Thank you, Christina. I think there are a number of factors at play. Firstly, we just need to think about the huge growth in electricity demand around the world, whether that's in relation to AI data centers, electric vehicles or indeed many energy-intensive industries such as glass and chemicals.

But we also need to think about the energy security question, particularly in the light of conflicts in the Middle East and also the Ukraine crisis, which means that countries are increasingly looking for their own energy supply. We can't forget the climate change challenge in terms of reaching net-zero and the decarbonization efforts that go towards that. And if one thinks of all of those factors in mind, nuclear can clearly play a great role in addressing those challenges.

Christina

Absolutely. Let's take a quick ten-second reset for a moment so we all speak of the same terminology. When we talk about the big reactors, imagine big reactors that are about 1,000 megawatts, give or take.

Small reactors, let's imagine they're about 300 megawatts or less. And microreactors, let's go with five or 10. There are differences in the technologies, and those differences have developed over time. It has also evolved globally, which is why it's so exciting that we get to sit here representing three different very important jurisdictions in nuclear. This growing demand is a global concern, but what makes it so important right now? What are your thoughts, Ximena?

Ximena

Today, in fact, I think some people don't realize it, but we have never had as many reactors in operation as we have today. There are 415 reactors in operation in 31 countries all over the world. We have 73 reactors under construction all over the world. But what is incredible is that one of the countries that is most active is China. The US maintains its position as the first nuclear energy country, with more than 90 reactors in operation. Just a year ago, France was the second country with 57 reactors in operation.

But now China has in fact passed France because China has 60 reactors in operation. It has today more than 20 reactors under construction, so it's really now closing the gap even with the US. What is interesting also to see, because talking about energy mix, is that in the US nuclear is not a big part of the energy mix. In France, with 57 reactors, it's more than 70 percent of the energy mix. And in China, even though they have 60 reactors in operation, they're the second country in the world with operating reactors. It's a little bit less than 10 percent of their energy mix. So, it also shows the huge demand that there is for energy, and in order to be able to generate such an important quantity of energy, you do need to have nuclear.

Christina

Absolutely. I was talking to some friends recently about data centers and why do they need to have data centers in their communities. Why is it important to have it if they don't feel like they need it? And when you realize how much it impacts our lives, you realize why we have this intense increase in energy demand where the sources that we have now are just not equipped to meet that demand, which brings nuclear back on the table. Ximena, I want to ask you a question. You mentioned something to me recently that was so fascinating. The American Nuclear Society out in Colorado met recently, and you shared with me an important insight that you took away when it comes to data centers and nuclear. Could you share that with us again?

Ximena

Yeah, sure. It was a presentation given by an expert from one of the US national labs. She had made a study on the acceptance of data centers in Tennessee. Before, nuclear was not accepted by the public because of the risk and because of the history; but now things have changed because people want to have low-carbon energy, a lot of energy. And she was saying that as the communities were not really open to have data centers because of the use of water and also the impact it has on the electricity side, meaning that they use a lot of electricity, and also prices just skyrocket. In such a case, she thought that it could be a good opportunity to in fact locate a data center with a small modular reactor, because then the communities would know that the data center would not be using the electricity they need and should not have any impact on the price of electricity for them, and that would contribute, in fact, to the acceptance of the data centers.

Christina

Wow. What kind of a world are we in when we're looking at data centers adding nuclear to increase acceptance in communities? It's so different than the world that we've been working in for decades on the nuclear side. It's an exciting shift in public perception. What are your thoughts on this, Simon? What are you seeing in the UK? Is public perception shifting in the same direction?

Simon

I think public perception is certainly shifting in favor of nuclear. In the UK at the moment, we've got two large projects underway, Hinkley Point C that has been plagued by delays and cost overruns, but is now moving at pace. We've also got its sister, shall we say, Sizewell C, which is now going through the permitting process as well.

We've had an SMR competition, and Rolls-Royce was the successful winner of that, which will be developing its rather large SMR, so 470 megawatts, which is comparable to half the size of what we regard as large nuclear power plants today.

And the interesting thing about that is that the UK is a pretty small country. Rolls-Royce will have its eyes set on the international market as well. And interestingly enough, so they have plans to build three of their SMRs in North Wales, and they've also signed an agreement with Czechia, with the ČEZ, a utility in Czechia, where they will also be building, or they plan to develop SMRs there. And indeed, recently they signed an agreement with Sweden and Vattenfall to develop SMRs there. So that's two other jurisdictions they're targeting. And we are seeing this theme amongst SMR developers, this concept that they are looking for an exportable product and this idea of developing a fleet. So, we are seeing quite a lot of movement in the UK.

And, back to your question about public acceptance, I think the public is pretty on board with it now for a number of reasons—energy security, energy prices, the challenge in relation to net-zero, which probably your average member of the public doesn't really focus on, but certainly affordability and energy security I think are high up in terms of their priorities.

Christina

I noticed two things that jumped out at me, Simon, when you mentioned the word winners and international export. Those are two big themes that are coming up often as the US is moving into this nuclear resurgence. Part of what kickstarted this was the ADVANCE Act in 2024. Congress in the US—it seems like one of the unique, wonderful things that they could all agree on is nuclear power because it is clean, it's reliable, it has the opportunity to provide baseload power to the grid while providing that modularity aspect.

So, the ADVANCE Act was nearly unanimously passed by the US Congress in 2024. And then in 2025, the new administration put out four different executive orders really trying to jumpstart and propel forward the advancement of the technologies with deadlines that were relatively intense, but were great to get people moving forward toward establishing zero power criticality and advancing the technology closer out of the development stage into a marketable commercialized product. And we've already seen two of the 11 projects that were accepted under the Department of Energy's Reactor Pilot Program reach zero power criticality. It's a great milestone that moves them closer to commercialization. What's also incredible is that while the federal governments have been stepping up, so have the states.

And we, when I was working with the Department of Energy, were looking at how to collaborate with the states and create these nuclear campuses, these nuclear innovation campuses. States are putting up money and funding and resources, land. It's an amazing effort in public-private participation and partnerships. When I think about winners, I've asked this question often is, okay, you've got over 160 designs in the US. How many of those are going to be winners? Is there going to be one or two? I think we need to shift that question and that perspective a bit because one of the exciting things about small modular reactors and advanced reactor technology is that it enables us to meet multiple different types of user needs.

So rather than thinking about it from the perspective of winners and losers and which ones are going to attract the most funding, I see a perspective where we can start matching user needs to technologies that are an adept fit, and we have an opportunity to do it where there are off-takers for the energy that are willing to pay for that technological advancement and development.

And to mention, Simon, on that other point you mentioned of exports and international eyes on the technology for Rolls-Royce in the UK, there are so many countries that have never had nuclear that are working on developing safety frameworks so that when these technologies clear the hurdles in the US and in the UK and in other locations, they are ready to export them in a modular capacity or even build on-site.

Simon

So, can I just perhaps pick up on that theme, Christina, in terms of revising regulatory frameworks? So yes, we are seeing that around the world in different jurisdictions. The US certainly is one of them. The UK as well; they are looking to streamline regulatory licensing processes.

John Fingleton conducted a review last year and produced a report and essentially said, "We need to look at our regulatory processes to streamline them, to make them fit-for-purpose for these new technologies." The regulator in the UK is called the ONR, Office for Nuclear Regulation. They've produced a new framework called the Advanced Nuclear Framework, which is specifically designed towards these next-generation technologies.

We're seeing that in other countries as well. Finland has been revising its regulations. Other countries around the world are looking at their established frameworks, which of course were set up for large nuclear power plants. But now there's a realization that these regulatory processes need to be adapted and streamlined where possible.

A lot of these new technologies, they work on the basis that they are close to urban populations and in industrial centers, and that gives rise to a challenge over established siting criteria that typically have applied on the basis that large gigawatt plants were located on coastlines because of the requirement for water, but away from urban populations because of the perceived risk around radiation. And that, we're seeing that now being looked at slightly differently to accommodate these new technologies, which is a very interesting development.

Ximena

I would add maybe to this about the newcomer countries also. We're just until now talking about countries that have already nuclear power programs, but there is out there a very important number of countries that are also looking at nuclear, especially now that the World Bank has changed its policy and is looking forward to start financing nuclear projects. It will take a little bit of time, but they will certainly do. And so today there are a lot of countries that are setting up their legal framework in order to be able to welcome, in fact, this new technology. So that is also something that is very exciting.

Simon

I was involved in supporting Estonia to develop its legal regulatory framework, and part of that exercise was trying to future-proof that legislation so that it does work for these new technologies.

Christina

Let's take a step back for a minute to talk about what we mean by regulations. Let's put it this way. If you want to drive, you wouldn't want the person that is selling you your car to also be the one to determine whether you're safe to drive it. So, when I think about this, I think about two different things. There's the promotional side, the person selling your car, and the independent safety regulator, and, in this case, would be the one that decides that you are safe to drive on the road.

So here there's the Convention on Nuclear Safety with nearly 100 countries that are parties, and all of those countries have agreed to be required under the convention to have an independent safety regulator. And what that means is that they are committing humans, technology, and resources to ensure that there is an independent safety body that is able to be separate from industry and from government. This has worked really well. It's worked for many decades. It is part of why we have such an amazing safety culture in the nuclear industry.

There have been times, though, that we haven't been building anyway. So here we are with a very safe, very technologically advanced energy source, and we're still not building, and we've been trying to figure out exactly why, and it comes down to liability. So, what is nuclear liability, Ximena? And why is it so important when we're talking about nuclear?

Ximena

The regulatory aspect is key to nuclear because you need to ensure safety, but you also need to be prepared in order to know what's going to happen if by any chance there is an accident. In fact, in the nuclear sector, some people have a very bad image of nuclear, but in 70 years of operation, there have only been two accidents with offsite damage until now.

But nuclear liability was one of the first things that led to an international convention. In the 1950s, when the private industry was invited to participate in nuclear adventure, they didn't want to because they were so afraid of the consequences of a nuclear accident; and therefore there was a need to develop maybe a new frame of risk allocation, a new liability regime, and that is what nuclear liability was there for. In fact, it determined very simply that in case of a nuclear accident, it was the operator where the nuclear incident occurred that would be exclusively and solely liable. The US has a little different liability regime, but for the rest of the world, if there is a nuclear accident, the victims can only sue the operator. In the US, we say that it's economic channeling because the operator will bear all the financial consequences, so it comes to the same thing. It's the operator who will, in fact, bear the financial consequences.

So that reassured, in fact, the investors, and should reassure investors today with regard to who is going to be liable in case of a nuclear accident.

But well, regulatory also has a huge impact, safety regulatory, on the total cost of the project, but that I think, Simon, is the one that's going to address that.

Simon

Yes. This concept of regulatory oversight clearly needs to be taken into account by a prospective developer come operator because it has an impact on the pre-construction phase, on the construction phase, and indeed on the operation phase. There is a regulator that will always be overseeing that project to make sure that it is safe leading up to operation. The regulator will have a say on the safety design, the safety case. It may require changes to be made, which in itself will have an impact on the project timeline and costs involved.

We haven't mentioned export controls, but in terms of obtaining key equipment, there may be delays in relation to obtaining that equipment from outside of that specific country. So, these are all factors that need to be borne in mind by a prospective operator. That's not to say that they're not achievable, but they do need to be borne in mind.

And there is some thinking that SMRs, whilst they will still clearly be subject to the same regulatory oversight, they do present, because of their unique concept, that they will be able to be built in a modular format so that items will be constructed off-site and then brought onto the site, and then construction will take place on-site. There is this concept that timelines should be improved. There will still be a requirement for regulatory oversight, and there are questions there as to how that regulatory oversight is going to happen in, in the factory setting in terms of certification and materials. So, there are a number of interlinked questions there, but I think we just have to bear in mind that regulatory oversight is key, and the nuclear industry, as we've already discussed, does place a premium on safety, and quite rightly so.

Christina

One of the exciting things in this area is how people are thinking innovatively in the framework and the structures that they're putting together to finance these endeavors. It's not just financing the development of the SMR, but when investors come together in these public-private partnerships, they try to leverage the partnership itself to create a more predictable investment. I see large-scale projects where multiple types of energy sources are co-located near a data center or an industrial complex, and integrative models are emerging that can help ensure that these are built at a cost that is predictable on a timeline that actually occurs without the cost overruns and the time delays.

We're seeing this happen in real time. In the US, we recently had a project that was approved 18 months before anticipated, and part of that was because of AI. What was really fascinating is that not only are these energy sources going to support data center development, which is going to create more processing for AI, but using AI to leverage all of the safety data over 70 years to help predict the future and ensure that we're running safety models is really helping these companies move forward more rapidly on their technology development.

Simon

Yeah, Christina, I agree, and this idea of public acceptance that we mentioned right at the beginning is absolutely key for the nuclear industry and for a number of the projects that we've been talking about, SMRs and AMRs. In all cases, they need to make the case to the public, to their local community, or indeed nationally, but primarily in, in local communities. They need to make the case for public acceptance. Usually, local communities are very supportive because they see the benefits in terms of jobs, good jobs, highly paid jobs, highly skilled jobs, and jobs that last for a number of years because of the length of these projects. So, we can't stress enough how important that is.

Christina

So, investors want to know who are the players and where should I invest? These projects are large, and I like to think of it at the beginning and the end. The beginning is where we're talking about the sponsors, who are the financiers, the banks, the private equity, and some responsibilities, the government sponsors. And then at the very end, you talk about who are the realistic off-takers. In this case, it's data centers and high-energy markets. But there's a lot that takes place between the beginning and the end, and ways that we could use public-private partnership to pull that forward. So, Ximena, I want to pass it over to you to talk a little more about this. How is the investment market in the EU handling this risk?

Ximena

We're talking a lot about the nuclear power plants, but in fact, it's the whole, what we call the nuclear fuel cycle that needs to be funded. And in fact, the different phases of the nuclear fuel cycle have different types of risks. And it's true that maybe the major risk is the one related to the operations of nuclear power plants. But we shouldn't forget that there also, there is the mining, there is the conversion and enrichment phase. There is also the radioactive waste management sector, and also there is the commissioning phase. Investors should be looking at all that because there is already today, as we saw, that there are a lot of large reactors in construction, and soon we'll have a lot of small module reactors. We have several large reactor projects that are being developed. We continue having, let's say, the same traditional approach, meaning that it's mostly governments that are funding those projects.

But we will see how it's going to go with small module reactors, where the private sector is expected, in fact, to invest much more. But what we understand is that this private sector is going to look for a government support in a certain way. So, we might be looking at having a similar approach that for large reactors, meaning maybe a contract for difference, but if it's an off-grid project, the governments will have to provide and come up with something.

Christina

What are you seeing in the UK, Simon?

Simon

So, in the UK, traditionally it's been that state-financed approach, certainly for large nuclear projects. Most recently, we had a couple unfortunately that failed because they didn't manage to reach agreement on the financing. So that led the UK government to look to an alternative, and they've developed something called the regulatory asset base model, which is now what is being applied to Sizewell C. And in practice, that has also meant that the government has stepped in with quite significant funding. So that's relevant for large nuclear.

As Ximena mentioned, it'd be interesting to see what we're looking at for small modular reactors. So, the UK government has taken a view, I think quite rightly, that state funding was needed at least to kickstart the SMR program, and therefore they have provided finance to Rolls-Royce directly and indeed indirectly through an entity called GBEN, Great British Energy Nuclear.

There's a hope that this will eventually lead to public-private finance, that private finance will play a part as these SMR projects develop. So that's the trend we're seeing at present.

Christina

One thing that I've been seeing in the US is very innovative approaches that not only divide the risk and try to allocate it in a palatable way so that multiple investors can see not only the potential return on an investment, but also leverage the risks and the first-of-a-kind risk they're concerned about.

One thing I've been seeing specifically with you all at White & Case is how much amazing work we can leverage collectively in the project finance sector. Yes, you're talking about a different technology, but it's still first-of-a-kind risk. There's so much knowledge that can be shared from the last several decades financing other innovative first-of-a-kind projects, and I'm excited to see how that translates into the frameworks we're seeing for investors to help bring these projects to life.

We've covered a lot of ground today from technology and regulation to financing, liability and risk allocation. So, as we wrap up, we always like to end by asking our guests to look toward the future. So, looking forward, Ximena, let's start with you. What excites you the most about the nuclear industry, and where do you see it going in the next five years?

Ximena

Well, what is really exciting today is that the nuclear sector is innovating. We talked about small modular reactors, a different type of reactor like the transportable. That's really amazing. But also what I think it's super-interesting in the years to come is that we will need to innovate also financially because we need new investment schemes, and also we have to discuss with the lenders how it's going to be possible to finance, in fact, these projects, which are so regulated that some banks might not be able to have the same approach as for other type of industries.

Christina

And Simon, what are you most excited about, and where do you see it going in the next five years?

Simon

I'm excited to see SMRs develop and move forward, perhaps with some accelerated timelines in relation to some of these technologies. It's going to be very interesting to see which ones come through in terms of design credibility. There's this kind of geopolitical angle here—which countries go for which different types of technologies to suit their needs. I think it's also going to be very interesting to see, in relation to nuclear newcomer countries, which ones push ahead perhaps even more aggressively than they are at the moment. Again, to see what that, the picture will look like in five years' time.

Ximena

And what about you, Christina?

Christina

I see a future where once we have gotten over some of the initial first-of-a-kind technology hurdles that we are tackling right now today, that five, 10 years from now, this is technology that can bring reliable power and access to desalinated clean water to communities that have never had that kind of reliable access.

I see availability and decreased power bills for people across the world. All of this is attainable, and to see so many people coming together and working together in this public-private partnership, not just in the US and not just in our countries, but globally, it shows a promise of nuclear power that makes me look forward to the future.

Simon and Ximena, thank you both for such an interesting discussion on the nuclear sector. And to our listeners, thanks for listening. This has been InterSectors. Please subscribe in your preferred podcast app so you don't miss future episodes. Until next time.