Donald Trump speaks to city officials and employees of Double Eagle Energy on the site of an active … [+] oil rig. The president-elect views oil as a critical piece of American energy security. (Photo by Montinique Monroe/Getty Images)

Getty Images

In the run-up to President-Elect Donald Trump’s January 20, 2025, inauguration, energy markets have already begun to adjust to the new administration’s new economic policies. The incoming team’s support for the oil, gas, and nuclear industries reflects a re-evaluation of renewables stemming partly from a global shift towards energy security and reliability to hedge against the effects of the U.S.-China competition. This comes at a time when companies and states alike are seeking to secure more and cheaper energy than ever in anticipation of drastic increases in consumption for AI processing and/or higher levels of economic activity.

While the percentage of renewables in the global energy mix was projected to increase from about 30 percent to about 50 percent by 2030, Trump administration policies may change it. Trump’s campaign statements have already impacted the US, producing results. The nomination of Chris Wright, an oil industry CEO, to Secretary of Energy, pushes forward the incoming administration’s intent to maximize oil industry output. Trump’s transition team has also made statements about completely lifting Biden’s pause on LNG export licenses and speeding up the process for obtaining drilling permits on federal land.

Liberty Oilfield Services CEO Chris Wright is president-elect Trump’s presumptive nominee for energy … [+] security, indicating support for the oil industry in the U.S. (Photo by Andy Cross/The Denver Post via Getty Images)

Denver Post via Getty Images

These moves appear likely to severely strain the solar energy industry. The sector will not only lack the kind of support that the outgoing Biden administration had afforded it but also be dependent on imports from many Asian countries that Trump intends to target with tariffs, most notably China. These tariffs will likely hit solar and wind-powered businesses hard while leaving ample room for the nuclear energy industry to expand.

The Global Nuclear Renaissance

European countries, badly hit by the sanctions on the cheap Russian gas supply, are reconsidering nuclear. Hungary, a NATO partner and member of the European Union, is moving to expand its use of nuclear reactors with the addition of two Russian-made VVER reactors. Romania, Slovakia, Poland, Finland, and others are all getting on board with nuclear energy. Outside of Europe, Indonesia has tapped Russia and the United States for a deal to acquire nuclear technology to replace its prolific use of coal.

In smaller states, the increased interest in Small Modular Reactors may open a new pathway for economic diplomacy and interchange between emerging countries and countries with more advanced nuclear expertise.

Construction of the first commercial small modular reactor in China. Several countries are pursuing … [+] SMR technology as a way to generate nuclear power as a sustainable source of baseload energy. (Photo by Luo Yunfei/China News Service/VCG via Getty Images)

China News Service via Getty Images

India, one of the most populous countries in the world, has also announced its intention to triple its own nuclear energy production by 2030. If it embraces leadership in the nuclear sector, the US may find an opportunity to gain a stake in the Indian energy market by investing in and supporting nuclear infrastructure. In India, the Atomic Energy Act of 1962 prohibits the operation of nuclear power plants by anything other than government-owned entities. However, with increased pressure to ramp up electricity generation, the government earlier this year put the possibility of public-private partnerships on the table.

China also sees nuclear energy as a path forward after disappointing gains in the renewables market outside of solar panel and electric vehicle exports. By 2030, China is set to produce more nuclear power than the two current leaders – France and the United States – combined. It is doing this by muscling in on Russia’s dominance of civilian nuclear supply chains and increasing political ties with uranium-producing countries like Kazakhstan, Namibia, and Australia. As of April 2024, China had 23 nuclear power plants under construction. The United States has only constructed 1 new nuclear power plant in the last 30 years.

These trends follow a general decline of “faith” in the solar energy industry, much of it prompted by the energy supply crises triggered by Russia’s war on Ukraine and the Sino-American trade war. Before war-related economic sanctions and decoupling, many European states, like Germany, depended on Russian hydrocarbons and viewed trade with Moscow as a means of integrating Russia into the European community – an extension of the Cold War era Ostpolitik policy. Despite the inability of solar and wind to compensate, Germany pursued Energiewende, a transition to renewables. It doubled down on dismantling its nuclear reactors, only to wind up burning highly emissive coal as a source of baseload energy in the wake of Russia’s invasion of Ukraine. While this may not have generated an extreme backlash in Germany, others looked on in alarm.

Highlighting the interconnected nature of the European energy market, in a period where there was little wind blowing, Germany’s continued reliance on wind power as opposed to gas and nuclear recently pushed other European markets into an upward price spiral, prompting demands that German markets be divided into price zones and EU investment in nuclear energy continue. Norway is now on a path toward cutting energy links with mainland Europe. The Czech parliament has also begun to move on cutting significant aid to the solar industry in favor of more reliable and efficient alternatives.

Going Forward: Prioritize Gas and Nuclear Baseload for Energy Security

The overall trend going into 2025 is that many nations are noticing the persistent inefficiencies of renewables and their inability to meet rapidly increasing electricity demands. An international context dominated by tariffs and decoupling only exacerbates these problems.

Until battery storage technology becomes cheap and scalable enough to deploy alongside renewables, solar and wind will remain incapable of meeting high energy demand when the sun is not shining, or the wind is not blowing, except perhaps in specific locations where conditions are near constant. In the United States, the Trump administration is seeking to address this problem with a massive increase in oil and gas production, while countries worldwide are increasingly looking to supplement their energy supply with nuclear reactors.

As electricity demand grows across the board and renewables fail to provide baseload capacity, the shift toward energy security is a natural response as more and more electricity is needed to sustain national security, cutting-edge research, and economic growth.