Article

Nuclear could reshape power strategies for energy-intensive organizations

Nuclear energy may help organizations secure reliable power, but project success depends on managing construction, supply chain, and insurance risks.

For many organizations pursuing large, energy-intensive projects, access to sufficient electricity is becoming a strategic constraint.

Electricity demand is rising across the US. In 2025, US net electricity generation reached a record 44,300 TWh, up 2.8% from 2024, a sharp shift from the relatively flat trend seen between the mid-2000s and early 2020s.

The swift expansion of digital infrastructure, especially data centers, is intensifying demand for reliable, always-on power. But there is often a mismatch between demand and availability. A data center can often be built in roughly 12 to 18 months, while the grid upgrades needed to supply it with front-of-the-meter power can take five to seven years. For organizations under pressure to bring capacity online quickly, waiting for transmission upgrades, interconnection approvals, or additional utility capacity may not be commercially viable. As a result, some are being pushed to consider alternatives beyond the traditional grid.

Nuclear energy is increasingly part of the conversation because it can offer the type of reliable baseload power that is table stakes for operations where uptime is critical and interruptions are costly.

Two nuclear options, with very different profiles

Both traditional large-scale nuclear plants and small modular reactors, or SMRs, can help meet the rising demand for power.

Conventional nuclear plants are established, proven generating assets. They can produce very large amounts of zero-carbon electricity and have played a longstanding, baseload role in the generation mix, accounting for 18% of utility-scale electricity generation in 2025. But nuclear construction projects can also be associated with long development timelines — sometimes taking more than a decade to become fully operational — very large capital commitments, and, in some cases, a history of material cost and schedule overruns. For this reason, they might not be the most intuitive choice for organizations trying to solve a more near-term power-procurement challenge.

SMRs, on the other hand, are smaller by design, and many concepts rely on modular fabrication and assembly rather than fully stick-built construction. That means they may be deployed in a way that is more flexible, more repeatable, and potentially better aligned with the power needs of a specific project.

That is especially relevant for behind-the-meter applications. Some organizations are not looking for a massive utility-scale power-generating asset, but rather for right-sized power that can be delivered on a timeline that works for their project.

The opportunity is real, but so are the risks

The case for nuclear is often framed around availability and reliability. But organizations considering nuclear also need to consider the related risks, which are mainly twofold.

Property and casualty risk

Many of the key risks related to conventional large-scale nuclear plants are well understood and the industry has an established framework for how to address and insure these exposures.

SMRs can require a more nuanced approach.

Many SMR concepts involve non-water-based cooling systems, novel designs, and new deployment models. This means that they cannot be assessed as if they were simply smaller versions of legacy water-cooled reactors. Their risks need to be assessed on their own technical merits.

This becomes especially apparent during construction, testing, commissioning, and handover, when the modular approach that makes SMRs appealing can create additional complexity. A project may involve a factory fabricator, transport providers, a principal contractor, an owner, a fuel supplier, and, in some cases, a separate operator. Each of those handoffs can create uncertainty if responsibilities are not defined carefully.

Because of this additional complexity, it can be prudent to involve nuclear risk and insurance advisors before contracts are finalized to help identify and address engineering considerations, liability transfer, insurance triggers, acceptance criteria, and operational responsibilities.

For behind-the-meter users, there may be another important consideration: concentrated dependency. The appeal of dedicated generation can be greater control over timing and supply. But if a facility is relying on an on-site or dedicated nuclear asset without the grid as a practical fallback, the consequences of an outage may be immediate and severe.

Supply chain risk

Nuclear projects face many of the same supply chain pressures affecting the wider power sector. Long lead times for transformers and other critical equipment are already challenging project schedules.

But nuclear can also have a more specific supply chain issue: fuel.

The US domestic nuclear fuel supply chain has weakened over time. Constraints in uranium mining, enrichment, and fuel fabrication can add to supply chain complexity, particularly as interest in nuclear grows. At the same time, parts of the global nuclear fuel ecosystem remain exposed to geopolitical instability. This can put pressure on organizations to develop a sound fuel-procurement strategy that aligns with their needs.

The same is true for specialized labor and technical capability. Nuclear construction and operations require skills that are not easily replaced, and the available talent pool is limited. That can affect project timelines, operational readiness, and recovery from loss events.

Insurability can impact project commerciality, bankability

As interest in nuclear energy grows, insurability remains a critical consideration, and in the case of new nuclear technologies often hinges on whether the risk is understood well enough by insurers to confidently provide coverage on the most competitive terms.

Historically, nuclear risks have been a relatively closed market, primarily supported by specialized nuclear mutual insurers, (re)insurance pools, and managing general agents. That market is now evolving, with growing interest and demand for participation from parts of the commercial, non-nuclear insurance market.

Especially where technologies are new, insurers may collectively have limited experience with the specific design, coolant system, fuel type, commissioning sequence, or operational model being proposed. Securing optimal coverage may call for comprehensive engineering analysis, quantified loss scenarios, clarity around contracts and operations, and evidence that the technology has been de-risked against insurable loss as far as reasonably possible.

A prudent pre-marketing effort to effectively manage contractual and insurance risk transfer may be more critical than ever to the success of nuclear projects.

Nuclear provides an option if risks are understood and addressed

For organizations that cannot obtain the power they need from the grid, new nuclear can be an option, particularly as SMR technologies advance. But setting nuclear as a credible alternative may depend on risks being identified clearly and addressed.

Organizations that start early, define responsibilities clearly, engage technical and risk expertise up front, and build resilience into project planning will likely be better positioned to evaluate whether nuclear can function as a viable alternative power pathway.

Marsh’s team of energy and power specialists has deep experience in nuclear technologies and can help organizations like yours identify and address risks and engage in conversations with underwriters to design an insurance program in an effort to provide adequate protection.

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Article

Nuclear could reshape power strategies for energy-intensive organizations

For many organizations pursuing large, energy-intensive projects, access to sufficient electricity is becoming a strategic constraint.

Two nuclear options, with very different profiles

The opportunity is real, but so are the risks

Property and casualty risk

Supply chain risk

Insurability can impact project commerciality, bankability

Nuclear provides an option if risks are understood and addressed

Our people

Everett Hansen

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Nuclear could reshape power strategies for energy-intensive organizations

For many organizations pursuing large, energy-intensive projects, access to sufficient electricity is becoming a strategic constraint.

Two nuclear options, with very different profiles

The opportunity is real, but so are the risks

Property and casualty risk

Supply chain risk

Insurability can impact project commerciality, bankability

Nuclear provides an option if risks are understood and addressed

Connect with a Marsh specialist to discuss nuclear risks

Our people

Everett Hansen

Related insights

Proposed SEC rollbacks for public company quarterly reporting and disclosures

The power equation: What the digital infrastructure boom means for utilities and IPPs

Protecting power investments during the data center boom

100 largest losses in the hydrocarbon industry 1974 - 2025