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Europe grapples with energy costs and supply risks
Households and businesses across Europe are facing soaring gas and petrol prices, reigniting concerns over energy dependence as geopolitical tensions in the Middle East threaten further disruptions. While the UK government urges calm, the European Commission has called for reduced travel and increased remote work to ease demand.
Nuclear energy regains favor as a strategic solution
Amid fears of prolonged energy insecurity, nuclear power is experiencing a resurgence in Europe. At the recent European Nuclear Energy Summit in Paris, European Commission President Ursula von der Leyen described the continent's past shift away from nuclear as a "strategic mistake." In 1990, nuclear generated a third of Europe's electricity; today, that share has fallen to 15%, leaving the region heavily reliant on volatile fossil fuel imports.
Europe imports over half its energy, primarily oil and gas, exposing it to supply shocks-such as Russia's post-sanctions export cuts or Iran's restrictions on shipments through the Strait of Hormuz. Gas prices are rising uniformly across Europe, but electricity costs vary widely depending on national energy mixes. Spain, with its strong wind and solar capacity, expects average prices in 2026 to be half those of Italy, where gas dominates electricity generation.
France leads nuclear push, Germany reverses stance
France, Europe's largest nuclear producer, generates 65% of its electricity from atomic energy. Its future electricity prices are projected to be a fifth of Germany's, where nuclear phase-outs have left industries like automotive and chemicals heavily dependent on gas. This week, German economic research institutes slashed 2026 growth forecasts to 0.6% of GDP, citing global gas price surges.
Germany, long opposed to nuclear energy, has softened its stance, removing anti-nuclear biases from EU legislation. Analysts suggest this shift may be linked to security concerns, including Germany's request for France to extend its nuclear deterrent to European partners-a proposal France accepted this month.
"To build national resilience, drive energy security, and deliver economic growth, we need nuclear,"
Rachel Reeves, UK Shadow Chancellor
Public support for nuclear is growing, with a recent YouGov poll showing a majority in Scotland now backing its inclusion in the energy mix. France, the most vocal advocate, highlights nuclear's low-carbon credentials as key to meeting EU net-zero targets. President Emmanuel Macron framed it as essential for "reconciling independence, energy sovereignty, and decarbonization," while also addressing rising demand from AI-driven data centers.
Challenges and limitations of nuclear expansion
Despite renewed enthusiasm, nuclear energy is not a quick fix. Reactor construction faces lengthy delays, as seen with France's Flamanville-3 and the UK's Hinkley Point C projects. Waste management and safety concerns persist, and environmental groups warn that nuclear investment could divert resources from accelerating renewable energy deployment.
Chris Aylett, a Research Fellow at Chatham House, cautioned against viewing nuclear as a panacea. "Many European reactors are aging, and maintaining their current share requires significant investment. Expanding capacity demands even more time and money."
Cost is another hurdle. While nuclear was once competitive, wind and solar have become cheaper. Additionally, some Central European countries, like Hungary and Slovakia, still rely on Russian nuclear technology and uranium, adding strategic risks.
Small modular reactors emerge as a potential game-changer
The European Commission is betting on small modular reactors (SMRs) as a more cost-effective nuclear solution. Factory-produced and scalable, SMRs could power AI data centers, hydrogen production, and local heating networks. A €330 million EU investment package aims to bring SMRs online by the early 2030s.
Global interest in SMRs is rising. The US and Japan recently announced a $40 billion project to develop them in Tennessee and Alabama, while the UK's Rolls-Royce is seeking regulatory approval to build the first SMRs in Britain. However, as of early 2026, no commercial-scale SMRs have been licensed in the EU.
Fusion research and the road ahead
The EU is also investing in nuclear fusion, aiming to develop the first commercial fusion plant. Yet, for now, Europe remains dependent on fossil fuel imports, leaving it vulnerable to market fluctuations and geopolitical pressures.
Aylett emphasized the need for energy independence: "Europe cannot afford to be at the mercy of authoritarian regimes or commodity market algorithms." While nuclear is seen as part of the long-term solution, the immediate challenge remains securing stable, affordable energy supplies.
