Nuclear power remains controversial from an environmental standpoint, but a growing energy crisis could accelerate adoption and help the industry recover from record-low power generation levels.

The share of nuclear power in global gross electricity generation fell below 10% last year to the lowest levels in four decades, according to the annual World Nuclear Industry Status Report. Nuclear power accounted for just 9.8% of global power generation, with 2,653 terawatts of output from 411 reactors operating in 33 countries.

Meanwhile, global investment in new nuclear construction projects reached just $24 billion last year – just 6.5% of the $366 billion in non-hydro renewable projects. The slowdown in nuclear investment comes as solar fell to $36 per MWh and wind fell to $38 per MWh, which are significantly lower than nuclear's $167 per MWh cost.

Many nuclear power projects are also falling behind schedule. For example, about half of the 53 reactors under construction worldwide have experienced delays in their launch timelines. In addition, while five new plants became operational, eight existing plants shut down, creating a net decrease in nuclear power stations.

These shutdowns come at an inopportune time when Russia's invasion of Ukraine is sharply increasing energy prices. At the same time, a 20% drop in the output from European wind power in 2021 highlighted the need for a more stable energy source. Nuclear power is one of the few alternatives offering stable energy production and predictable prices.

Nuclear power remains controversial from an environmental standpoint. While it doesn't generate any carbon emissions, nuclear waste is certainly toxic to humanity and the environment. As a result, many ESG funds shun nuclear power exposure, ranking it well-below other forms of renewable energy and even below some fossil fuel projects.

That said, nuclear power may be necessary for a carbon-free future. While solar and wind power are cheaper, they produce energy on uneven and unpredictable schedules and require battery storage to provide consistency. Nuclear power could provide a stop-gap source of power at night or on calm days, ensuring there aren't any outages.

The industry also has several innovations that could lower costs and improve safety and output. For instance, TAE Technologies is a nuclear fusion startup that raised $1.2 billion from Google, Chevron, and others. The company could generate nearly unlimited emissions-free energy without harmful, long-lasting nuclear waste if successful.

TerraPower, backed by Bill Gates, and other startups also plan to develop mini-reactors that are faster and cheaper to build. By converting and burning much of the natural or depleted uranium in the fuel without reprocessing, these technologies could also help reduce the amount of nuclear waste by upwards of 80% compared to light water reactors.

These projects could ultimately help the industry recover from its slumping output and deliver cleaner energy needed to drive the transition to renewables.