The proposed development of the nuclear power sector in Europe may need an additional €700 billion for debt funding, illustrating the amount of money required to facilitate the energy transition in Europe, a newly released industry analysis by S&P Global Ratings suggests.

The forecast is linked to the wider initiative of reviving nuclear energy in Europe as an energy resource that offers stability and low carbon emissions at a time of increased energy demands amid political tensions. The review highlights that establishing up to 60 gigawatts (GW) of nuclear power capacity over the next three decades will be contingent on massive debt financing, with the private sector taking a leading position.

It is worth noting that nuclear power projects represent some of the most expensive forms of energy infrastructure development. As the report highlights, the expense of developing one big nuclear reactor is estimated to be between €10 billion and €15 billion, with the cost of purchasing necessary equipment reaching up to €10,000 per kilowatt.

Moreover, besides new constructions, the extension of nuclear plants' lives is supposed to require an additional €70 billion in debt. The need for financing the expansion of nuclear plants can be seen as another problem that should be solved by European governments, who will have to increase the capacity and preserve old infrastructure.

The attention to nuclear energy is part of a paradigm shift regarding the energy mix of Europe. In recent years, European leaders have started considering nuclear power plants as a crucial element of ensuring energy security, especially due to recent fuel price changes. At present, about a quarter of the EU's electricity production comes from nuclear plants.

Financing is a crucial issue for the development of nuclear plants. According to the report, the costs associated with nuclear power depend primarily on borrowing costs rather than operating costs and fuel prices. Therefore, governments should be able to create favourable financial conditions, offering subsidised lending and insurance services.

The investment climate might change soon. Recently, there has been an indication that investments in nuclear energy projects are becoming suitable for some green finance standards, allowing the use of sustainable investment vehicles, such as green bonds. Nevertheless, inflation and market instability still affect investors negatively.

These results highlight the importance of money in Europe’s energy transition. Even though nuclear power is once again seen as an alternative that is safe and low-carbon, its implementation will require considerable financing. According to the report, unless the region can continue to finance itself via debt markets, its nuclear goals might be delayed.