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Against a backdrop of persistently high energy prices and environmental concerns over the use of fossil fuels, attention has turned to nuclear energy as an alternative source of clean power.
The current Labour government was elected on a manifesto that stressed its nuclear ambitions: “We will ensure the long-term security of the sector, extending the lifetime of existing plants, and we will get Hinkley Point C over the line.
“New nuclear power stations, such as Sizewell C, and Small Modular Reactors, will play an important role in helping the UK achieve energy security and clean power.”
The previous Conservative administration had plans for nuclear power to generate up to 25% of the nation’s electricity by 2050, and the 2023 Budget saw the creation of Great British Nuclear, a body established to support nuclear energy and invest in small modular reactors. It was renamed Great British Energy – Nuclear in June 2025.
Nuclear energy is classified as “environmentally sustainable”, giving it access to renewable energy investment incentives. But while it may offer a solution in terms of helping replace fossil fuels, it continues to face challenges, including safety concerns, and the substantial cost and length of time needed to build nuclear plants.
Here’s a look at some pros and cons of investing in nuclear energy, along with some of the options available to retail investors.
Why consider investing in nuclear energy?
Global demand for nuclear energy is likely to grow over the next 30 years. According to the International Atomic Energy Agency, nuclear energy capacity may double by 2050 to help meet the forecast rise in demand for electricity.
One of the main growth drivers of nuclear is the target of net-zero global carbon dioxide emissions by 2050, which requires countries to reduce their use of fossil fuels. According to the Nuclear Energy Institute, nuclear energy cuts carbon dioxide emissions by the equivalent of emissions from 100 million cars a year.
In addition, nuclear power doesn’t suffer from the capacity constraints of wind and solar power. Gemma Boothroyd, a trading platform analyst at Freetrade, says: “Turbines and solar grids are great when they’re running at full capacity, but the sun won’t always shine and the wind won’t always blow.
“That unpredictability is a major reason why nuclear technology seems a promising alternative. Power plants don’t rely on natural forces to run – they need uranium, which the Earth happens to have in abundance.”
Europe is also looking at nuclear energy to help replace Russian gas. France is the world’s third-largest producer of nuclear electricity, behind the US and China. Even traditionally hostile Germany, which closed its remaining nuclear power plants in 2023, may be reconsidering its position following the election of a sympathetic government in 2025.
The UK and US increasingly seem to be willing to put their previous concerns over nuclear power to one side as they look to boost their energy security in an uncertain geopolitical environment.
What are some possible drawbacks?
One of the key issues with nuclear energy is the risk of catastrophic accidents, such as at Chernobyl and Fukushima. Nuclear energy also poses problems for investors looking for investments that are compliant with ethical, social and governance (ESG) strictures.
The nuclear industry was typically excluded from ESG and ‘socially responsible’ indices and funds because issues surrounding waste and safety outweighed its green credentials. However, the decision by the EU to add nuclear to its list of environmentally sustainable economic activities in 2023 was an indication of changing attitudes.
Henry Cobbe, head of research at investment firm Elston Consulting, says: “A robust and stable energy supply is key for energy security. In this respect, nuclear needs to be in the mix to enable the transition to ‘net zero’, but whether ESG indices come to the same conclusion is another matter.”
Craig Bonthron, co-manager of the Artemis Positive Future Fund, says nuclear power faces other challenges: “Not only is nuclear power beset with structural problems, but it has been undercut by cleaner, cheaper, safer and faster technologies.”
Mr Bonthron highlights the time and complexity of constructing nuclear power plants. “According to research by Stanford University, nuclear power stations cost two to seven times more than wind and utility-scale solar and take five to 17 years longer from planning to operation.
“In every way, renewable power is faster to bring online. Even if we put costs to one side, the world can’t afford to wait for nuclear energy.”
What are some options for investing in nuclear energy?
There is a range of investment options available, from companies that mine and extract uranium ore to broader-based commodity funds.
1. Pure-play nuclear stocks
One option is to invest in companies mining the source metals used in nuclear reactors. Gemma Boothroyd picks out Cameco in this space, a Canadian firm involved in the exploration, mining and refining of uranium.
She comments: “The firm already has plenty of the metal in its reserves, but it’s waiting for the spot [market] price of uranium to grow again.
“Theoretically, that should happen if more power plants are built, jacking up demand for the metal. As that happens, Cameco’s stockpile could become more cash-generative and more attractive.”
However, Ms Boothroyd warns: “Cameco’s success is dependent on global demand for uranium – a factor which it cannot control.”
2. Nuclear-related stocks
Another option is to invest in companies with a more diversified spread of operations that include links to nuclear energy. For example, Rolls-Royce has a nuclear arm in addition to its aerospace and car manufacturing activities.
It states: “Nuclear energy is the most powerful source of ‘always on’ clean energy. However, it must be deliverable, scalable and cost-competitive for it to be widely embraced. We’ve designed a factory-built nuclear power plant that will offer clean, affordable energy for all.
“A single Rolls-Royce small modular reactor (SMR) power station will occupy the footprint of two football pitches and power approximately one million homes. It can support both on-grid electricity and a range of off-grid clean energy solutions, enabling the decarbonisation of industrial processes and the production of clean fuels, such as sustainable aviation fuels (SAF) and green hydrogen, to support the energy transition in the wider heat and transportation sectors.”
Suggested Read: How To Buy And Sell Rolls-Royce (RR.) Shares
Alternatively, Jersey-based Yellow Cake is a passive investor in uranium – in other words, the company holds and trades uranium oxide in physical form, but without the operational risk of exploration and mining.
Ms Boothroyd says: “Yellow Cake’s profitability depends on the uranium spot [or market] price. In a way, it can be thought of as a trust, with a calculable net asset value, or NAV, for all of the uranium it holds.”
The share price of the company can differ from the value of its underlying assets (known as NAV). In this case, the NAV relates to the value of the uranium held by the company. If the share price is above or below the NAV, it is described as trading at a premium or discount, respectively, to its underlying assets.
3. Funds and ETFs
Funds pool money from investors to invest in a ready-made portfolio of assets such as shares or commodities. As with individual company shares, it is possible to invest solely in the nuclear sector, or as part of a wider investment in mining companies and natural resources.
One investment option is the Global X Uranium Exchange-Traded Fund (ETF). An ETF is a passively-managed fund that tracks an index – in this case, companies involved in uranium mining and the production of nuclear components. It has an annual expense ratio of 0.69% (including management fees), which is charged to investors for holding the fund.
Alternatively, the broader-based JPM Natural Resources fund invests in companies engaged in the production and marketing of commodities, including uranium producers. As an actively-managed fund, it comprises a basket of securities chosen to outperform a particular index, in this case, the EMIX Global Mining & Energy Index. It has an annual cost of 0.83%.
All of these investment types can be bought in a tax-efficient wrapper such as an Individual Savings Account (ISA). It’s also worth comparing some of the best trading platforms as the fees and range of investments can vary significantly.
Tax treatment depends on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
