German and French investors revisit nuclear opportunities as energy realities shift

Germany’s shift away from nuclear to a more diversified energy supply based on renewables has been well documented.

• Read more from Pinsent Masons’ ‘inside the energy transition’ research

After decades of growing environmental concerns over nuclear power in German society, it was the 2011 Fukushima disaster that finally accelerated the country’s nuclear phase-out, prompting ministers to completely decommission the country’s nuclear energy programme and shutter its last remaining nuclear power plants in April 2023.

However, three years on, there are some initial indications that investor appetite for new nuclear technologies in some parts of Germany industry, according to a recent global study by Pinsent Masons and Censuswide that surveyed more than 1,000 venture capital (VC) investment funds and developers engaged in low-carbon technologies.

A striking 44% of German respondents said they had either invested in or developed advanced nuclear fission technologies – including molten salt reactors (MSRs) and small modular reactors (SMRs) – over the last 12 months. This was 13% higher than the average response across all jurisdictions, suggesting there has been a distinctive shift in German investors and developers’ stance on nuclear.

Although the sample size was relatively small, Dr Sönke Gödeke, an energy expert at Pinsent Masons’ office in Düsseldorf, said the survey results reflected an increasing openness in Germany towards energy diversification and nuclear, which formed part of “a broader European trend of renewed interest in nuclear as a complementary low carbon technology.”

Rather than a “great return” to nuclear, “what we are seeing is a shift in sentiment among investors and market participants, driven by changing energy realities”, he added. “Overall, the data suggests a gradual repositioning of nuclear in strategic thinking, rather than a reversal of German energy policy. Nuclear fusion represents a distinct and forward-looking field in which Germany has positioned itself as a leading hub within Europe. German companies have attracted approximately €600 million in private investment, accounting for an estimated 80-85% of total private fusion funding in the EU, complemented by around €2 billion in public support.”

This renewed interest in new nuclear technologies – though still nuanced and constrained by political and historical legacies – is likely being driven by several factors, not least heightened concerns over energy costs and energy security as conflict in the Middle East continues to affect energy supplies worldwide.

The energy crisis has certainly helped fuel growing recognition – including among Germany’s political leadership – that a more diverse energy mix will be required to sustain the country’s energy stability and scalability long-term. “Chancellor Friedrich Merz has described Germany’s nuclear phase‑out as a “serious strategic mistake”, said Gödeke, “highlighting concerns around energy capacity, while at the same time emphasising that the decision remains irreversible. Against this backdrop, nuclear is being reconsidered more broadly as part of a balanced energy portfolio. However, regulatory and societal constraints remain particularly relevant in Germany.”

As the data indicates, other European countries, such as France, are also returning their focus to nuclear. 51% of French survey respondents reported they had either invested in or developed advanced nuclear fission technologies over the past 12 months.

While Germany was shuttering its nuclear plants in 2023, France enacted the Nuclear Acceleration Act, which removed the 63.2 GW capacity cap on nuclear power plants, repealed the requirement to reduce nuclear power to 50% of the country’s electricity mix and simplified planning and permitting procedures for new nuclear facilities located near existing nuclear sites.

In February 2026, after two years of delays, France also finally published its pluriannual energy programme (PPE3), which placed a renewed focus on nuclear power and reconfirmed the country’s renewed focus on nuclear energy.

Previously 14 of France’s 57 nuclear reactors were under threat of closure. PPE3 provides not only for these reactors to be kept online and their lifetime extended, but also the launch of new, large-scale EPR2 reactors in France.

Eran Chvika, an energy industry expert with Pinsent Masons in Paris, said the new energy programme has allowed France to reboot its nuclear energy market with renewed vigour. “France has now repositioned nuclear energy as a central pillar of its decarbonisation, industrial sovereignty and security of supply strategy,” he said.

As Germany and France appear to be experiencing their own, albeit very different, nuclear renaissances, Gödeke and Chvika said the EU’s approach remains more nuanced. “At EU level, there is a noticeable shift towards a more pragmatic recognition of nuclear as a low‑carbon technology,” said Gödeke. “This has led to closer cooperation among supportive member states. Against this backdrop, Germany’s approach appears more reserved, although it remains indirectly engaged through industrial and market developments.”

The EU’s decision several years ago to include certain nuclear activities in a complementary Delegated Act of the EU Taxonomy proved controversial among some nuclear member states, including Germany. While politically contested, Chvika said this classification gave nuclear energy “a clearer position within the sustainable finance framework” and sent a strong signal to investors.

This debate has been thrust back into the spotlight more recently as countries, including EU member states, such as France, increasingly point to the instrumental role that nuclear energy stands to play in providing a clean, sustainable form of power for data centres.

However, Chvika said the European Commission’s SMR strategy may provide the strongest political signal yet about Europe’s future nuclear trajectory. “It presents SMRs and advanced modular reactors as technologies capable of contributing to climate neutrality, energy security and industrial competitiveness, with the objective of bringing first projects online in Europe in the early 2030s,” he said.

In Germany, ministers recently publicly rejected a European Commission proposal to establish new EU subsidies to support SMR development as “backward-looking”, deeming the technology still too “high risk”. The strategy for small modular reactors would look to bring the first operational SMRs on stream from EU member states by the early 2030s. €200m in extra funding from the bloc’sinnovation fund would be made available to support projects until 2028.

Gödeke said there was still considerable reticence in Germany surrounding the deployment of this type of reactor. “SMRs are increasingly seen as an interesting technology, offering potential advantages such as lower capital intensity, greater flexibility and shorter deployment timelines compared to traditional nuclear plants,” he said. “They may also complement renewable energy sources by providing reliable baseload capacity and supporting industrial decarbonisation. At the same time, significant uncertainties remain regarding the commercial viability, cost competitiveness and scalability of SMRs.”

Chvika agreed that the business case for SMRs remains unproven at scale. “Licensing frameworks still require adaptation, supply chains need to mature and public acceptance remains uncertain,” he said. “In France, SMRs are likely to complement rather than replace large-scale nuclear. For Germany, they may reopen a political and industrial debate that had appeared closed after the 2023 phase-out.”

However, Chvika cautioned that any German “nuclear return” should be framed carefully. “At this stage, it is more a renewed debate and a shift in investor sentiment than a confirmed new-build policy,” he said. “The decisive question now will be whether Europe can move from prototypes and policy announcements to a deployable, financeable and standardised industrial model.”