The world needs $2tn in capital expenditure to build new power capacity to decarbonise generation and keep average temperatures well below 2°C and nuclear power – particularly competitively priced small modular reactors – could be key in the global decarbonisation movement, according to new research.

A new generation of SMRs can compete with renewables as a power source for hydrogen electrolysis if they can hit a $65/MWh price benchmark that's roughly half today's level, said Wood Mackenzie.

The research group said at that point, and assuming electrolysers running at sufficiently high load factors, SMRs could emerge as a key element of the energy transition mix as a flexible, dispatchable option for green hydrogen output alongside green hydrogen from wind and solar.