The United States can close China’s nuclear advantage by reducing project risk and giving private capital the certainty to invest.

The United States and China are entering into an era of strategic competition for dominance over nuclear energy. Washington does not lack for resources, but the coordination it provides has proven unable to match Beijing’s pace or scale.

The fundamental problem is risk. Building nuclear infrastructure requires project developers to commit billions of dollars and thousands of man-hours years before a project generates any revenue, creating tremendous uncertainty on projects with timelines that can stretch over a decade.

China is able to mitigate this problem by relying on centralized state planning and deployment mechanisms. This centralized system allows China to standardize reactor design, licensing, procurement, and deployment cycles while coordinating the financing, workforce, infrastructure, and supply chains required to support them. The result is not only the rapid development of infrastructure, but the rapid accumulation of experience. Each project builds the industrial capacity, institutional knowledge, trained workforce, and supplier base needed for the next. By doing this, China marshals its resources to build not only nuclear power plants but a supporting ecosystem that compounds advantage over time, leading to accelerating deployments as the ecosystem matures.

While China relies on central planning, the United States must rely on incentives to unleash its main advantages. The United States already possesses a well-developed continuing-education system capable of producing skilled and specialized workers across the nuclear infrastructure lifecycle, from initial construction and quality assurance to operations, project management, and research. It possesses dynamic and sophisticated capital markets capable of financing the substantial upfront costs of nuclear deployment. It has a federal regulatory environment that has recently become more supportive of nuclear development, alongside growing bipartisan political support for new nuclear infrastructure. 

Developing a system unique to the United States means treating the ecosystem surrounding nuclear projects as a public policy objective in its own right. Governments can help establish workforce pipelines before construction begins, coordinate infrastructure investments with project timelines, facilitate supplier qualification and capacity, provide greater certainty around regulatory and permitting processes, and use public financing and procurement mechanisms to reduce the risk borne by private investors. By providing these tools, governments can reduce the risk present in the process of infrastructure construction and provide new opportunities for capital markets to invest in US growth.

The Current Risks of Building Nuclear Energy Projects in America

The risk profile faced by US project developers is multifaceted and interconnected. The primary risk is always development and regulatory risk. A developer can spend years and hundreds of millions of dollars on site characterization, engineering, licensing, and environmental review before receiving certainty that construction can proceed on schedule. Because financing costs accumulate throughout this period, delays that may appear modest from a regulatory perspective can materially alter the economics of a project.

The second risk is construction and supply-chain risk. Nuclear projects require thousands of workers, specialized equipment, qualified suppliers, and components that may take years to manufacture. A shortage of qualified labor or a delay in a single long-lead component can disrupt an entire construction schedule, leaving expensive equipment and workers idle while the project continues to accumulate financing costs. These risks are particularly difficult for individual developers to manage because many of the capabilities required to complete a project depend on investments made by firms and institutions outside the project itself.

The final risk is market and financing risk. Nuclear plants require enormous amounts of capital before they generate electricity or revenue, while their economic value depends on electricity prices, offtake agreements, interest rates, and the cost of competing generation over decades. Investors therefore demand compensation not only for the expected cost of construction, but for the possibility that delays or changes in market conditions will undermine the project’s returns. The greater the uncertainty, the greater the return required to justify the initial investment—and the fewer projects that will clear the threshold for private financing.

These risks are mutually reinforcing. A regulatory delay increases financing costs; a financing constraint can delay procurement; a supply-chain failure can extend construction; and an uncertain completion date can make it more difficult to secure long-term power contracts. The developer consequently bears not one discrete risk but a web of interdependent risks extending across institutions it does not control. This coordination problem is itself a source of economic risk, and one that the government is uniquely positioned to reduce.

How Government Can De-risk American Infrastructure Projects

The first step toward de-risking nuclear infrastructure is to move more development activity upstream of private investment. Federal and state governments could prepare prospective nuclear sites and their surrounding infrastructure before developers are required to commit substantial capital. This means conducting site characterization and environmental studies, planning transmission connections, assessing water and transportation requirements, and establishing clear regulatory pathways before construction begins. The government could also identify the workforce and supply-chain requirements associated with prospective projects and begin addressing gaps years before they become constraints. By preparing the conditions for construction in advance, governments can reduce the development risk individual companies must assume before a project becomes financeable.

Similarly, governments could organize regional capacity around actual project timelines. A nuclear project does not simply require a reactor and a construction company; it requires thousands of qualified workers, specialized manufacturers, educational institutions, utilities, transportation networks, and local governments to perform their respective functions at the right time. State governments could establish regional nuclear development partnerships responsible for coordinating these capabilities around prospective projects. These partnerships would not manage construction or replace private developers. Their purpose would be to ensure that the workforce, suppliers, infrastructure, and public institutions surrounding a project are prepared to support it when construction begins. This would convert a collection of independent uncertainties into a coordinated deployment plan that developers and investors can evaluate in advance.

The federal government could also begin to use its balance sheet to address risks that private capital is poorly positioned to bear. Loan guarantees, tax incentives, long-term offtake agreements, and milestone-based grants can reduce financing and market uncertainty without requiring the government to finance an entire project. These instruments should be structured around measurable reductions in project risk and should preserve meaningful private exposure to construction and operational performance. The objective is not to guarantee returns to developers, but to lower the risk-adjusted cost of capital sufficiently for otherwise viable projects to attract private investment.

Finally, governments might consider creating a predictable pipeline of projects rather than treating each reactor as an isolated undertaking. Long-term procurement commitments, standardized regulatory processes, and coordinated infrastructure and workforce investments can give manufacturers and contractors confidence that demand will persist beyond a single project. That predictability is itself a form of de-risking. A supplier that knows it will serve five reactors can invest in specialized equipment and personnel that would be uneconomic for a single project; a community college can justify a nuclear training program when it has visibility into sustained regional demand; and investors can price a repeatable project model more confidently than a one-off undertaking. The policy should be designed around the goal of creating a system in which the successful completion of one project makes the next project cheaper, faster, and less risky.

US Nuclear Energy Competition With China Depends on Private Capital

By serving as a financial and regulatory backstop, governments may be able to change the financial calculus for private developers and investors. Once this coordination capacity is functional and well understood, US capital markets could unlock funding for infrastructure that will supply jobs and energy across the country. Those capital markets are what define the United States and are its greatest source of strength in any economic race against China, but they can only work if governments set incentives in the right direction. 

About the Author: Randall Schmollinger

Randall Schmollinger is the CEO of Aule Materials, a company designing software in tandem with partners at the Idaho National Lab for nuclear engineering applications. He holds a BA in computer science from the University at Albany and a master’s in international affairs from Columbia’s School of International and Public Affairs. 

The post How America Can Compete with China on Nuclear Energy appeared first on The National Interest.