Performance Communications | September 4, 2025
It’s no secret that mass adoption of BEVs and PHEVs depends on access to reliable charging infrastructure, but an under-appreciated aspect of the EV revolution is how much it depends on affordable electricity. Here, Performance Communications’ own Matthew Kirtley explores how nuclear might be the missing piece of the jigsaw.
Rolls-Royce has recently claimed that its plan to power AI with its much-vaunted small modular reactors could turn it into the UK’s biggest company. And regardless of what you think about AI, it’s certainly true that nuclear is making a comeback worldwide as a popular vision for national energy generation mixes. The reason is simple: electrification is increasing demand on the grid, and nuclear is one of the most effective technologies to reduce electricity unit costs.
To understand the nature of the opportunity, let’s consider a Tesla Model Y: at the upper threshold, its battery can store around 80kWh of energy to cover around 300 miles. The average British motorist drives 7,500 miles per annum, which equates to 25 full charges of the Model Y. That totals 2,000kWh of electrical energy: with current retail prices being 25p/kWh, that’s at least £500 spent on electricity to power the Model Y each year.
That’s significantly cheaper than the approximately £1,000 per annum spent on fuel by the average petrol or diesel car driver. But BEVs also cost on average 22% more up-front than an ICE car of equivalent range: a £30k ICE car’s BEV equivalent costs £36k. That means it’ll take 12 years of ownership before the BEV’s cheaper fuel costs to help it pull ahead in terms of lifetime costs.
Cheaper electricity is the best lever we pull to reduce this timeline. At 15p/kWh, annual energy costs for our BEV fall to £300, meaning it takes around 8.5 years for it to break even against the ICE car. At 5p/kWh, the annual BEV fuel costs fall to £100, meaning it takes just over 6.5 years for it to break even.
If you’re running a fleet – which account for most the UK’s new car purchases – these economics matter quite a lot. But even if you’re a consumer, running costs can play a significant role: the psychological impact of a BEV’s fuel costs being one-tenth that of an ICE car would be a profound push for many BEV sceptics. After all, when the Chancellor adds a penny to the price of a litre of petrol, motorists pay attention.
Energy prices play a big role in the economics of BEVs. But energy also is critical to one of the major rationales for BEVs: their emissions performance. That’s because energy generation plays a significant role in the lifecycle greenhouse gas emissions of the vehicles it goes on to power.
While a 100kW BEV running on an entirely renewable-powered grid would have levelized emissions of 22.9kg of CO2 per kWh of charge, those operating on grids without renewables emit 82.5kg of CO2 per kWh. That’s still significantly better than the 160.1kg of CO2 per kWh emitted by petrol cars, but it takes the margin down significantly: from just 14.3% of the petrol car’s per-kWh emissions to 51.5%.
Inevitably, this is where we enter the classic trade-off of energy: affordability versus cleanliness. That’s because at the grid level, reliance on renewables like wind and solar is seldom as cheap as the p/kWh levelized costs for this generation. To make them reliable contributors to the grid you need energy storage, as supply isn’t necessarily timed to coincide with demand.
One paper in nature communications estimates that Britain’s storage requirements would be immense given our latitude and weather patterns. We’d need 210GW of total de-rated generation – three times more than moment-to-moment needs – and 12 hours of storage capacity at 2,500GWh. The latter figure alone, assuming a conservative cost of £250mn per GWh, would cost well over £600bn.
In short, a low-carbon grid needs more than just a source of intermittent power.
That’s where nuclear comes into play. Nuclear plants, owing to the density of their energy source cutting down refuelling requirements, can output power for well over 90% of a year. By comparison, wind and solar can only achieve 10-30% of the year.
This higher “capacity factor” of nuclear plants is critical, since it reduces the need for storage systems. Pair this with the compactness of nuclear plants – they require 40 times less land than an equivalent solar array, and 230 times less land than an equivalent onshore wind farm – and nuclear stands out as the most viable non-emitting source of energy for a widespread BEV fleet.
To get a sense as to what the results of cheap nuclear could be, you only need to look at South Korea. There, the cost per kWh of nuclear stands at just 4p. That’s enough to bring our hypothetical Tesla Model Y’s annual fuel bill down to just £80 a year.
On this basis, electrification looks set to breathe new life into the atomic age.
Matthew
