Nuclear power is poised to achieve a new milestone by 2025, enhancing global energy security in an era of rising electricity demand, the International Energy Agency (IEA) reports. However, the sector faces considerable challenges, including cost management, project delays, and financing hurdles that must be addressed.
New Era for Nuclear Energy
The IEA's report, entitled "The Path to a New Era for Nuclear Energy," outlines the renewed focus on nuclear energy through new policies, investments, and technological advancements, particularly small modular reactors (SMRs). The document provides a thorough examination of the current state of nuclear power, emphasizing the necessity of tackling these challenges to maintain momentum and usher in a new era for nuclear energy. Key areas for enhancement include financing new initiatives and ensuring dependable and diversified supply chains.
Projects On Schedule and Budget
IEA Executive Director Fatih Birol commented, “It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear set to generate a record level of electricity in 2025.” Over 70 gigawatts of nuclear capacity are under construction globally—the highest in three decades—with more than 40 countries planning expansions of nuclear in their energy portfolios. SMRs, in particular, present promising growth prospects, but the industry must overcome financial, scheduling, and supply chain obstacles to unlock this potential.
Expanding Generation Capacity
As demand for power accelerates—driven by industries, air conditioning, electric vehicles, and data centers—there is a burgeoning need for diverse technologies, including nuclear, which can offer stable and flexible energy outputs. Currently, nuclear power stands as the second-largest source of low-emissions electricity, following hydropower, and contributes nearly 10% of the world’s electricity supply.
Nuclear Technology Landscape
While advanced economies host a majority of the existing nuclear plants, many were constructed decades ago. The landscape is shifting, with China and Russia leading new construction efforts. China is on the path to surpass both the United States and Europe in nuclear capacity by 2030, and of the 52 reactors that have commenced construction since 2017, nearly half are designed by China and Russia. Additionally, uranium production and enrichment, concentrated largely in a few nations with Russia holding a significant share, highlights the need for more diverse supply chains.
Introduction of SMRs
Innovations such as SMRs are catalyzing nuclear project momentum, reflected in heightened private sector interest. These smaller-scale reactors offer accelerated build times and potential cost reductions. Given adequate support, SMR installations could grow to 80 GW by 2040, comprising 10% of global nuclear capacity. For SMRs to match the cost efficiency of large-scale hydropower and offshore wind by 2040, the industry must make headway in reducing expenses.
Investment Needs for a New Era
For nuclear energy to embark on this new era, a significant increase in investment is required. In a scenario of rapid nuclear expansion, annual investments would need to hit USD 120 billion by 2030. The anticipated infrastructure development cannot depend solely on public funds. The IEA stresses that predictable cash flows are vital to decreasing financing costs and attracting private investment to the nuclear sector. This perception is increasingly shared by the private sector, with nuclear energy seen as a promising, stable power source suitable for energy-intensive activities around the clock.
Stable Regulatory Frameworks
The report also emphasizes that to maximize nuclear power's benefits, governments need to provide a strategic vision and stable regulatory frameworks that bolster private sector investment confidence. Incentives and public financing can catalyze the investments necessary to elevate nuclear’s role in delivering clean and reliable energy in the future.
Nuclear power is set to reach a new record in 2025 and can improve energy security as electricity demand accelerates – but costs, project overruns and financing must be addressed.
Renewed momentum behind nuclear energy has the potential to open a new era for the secure and clean power source as demand for electricity grows strongly around the world, according to a new IEA report.
New Era for Nuclear Energy
It provides a total review of the current situation, identifying the major challenges that need to be addressed
The report, The Path to a New Era for Nuclear Energy, shows the fresh impetus behind nuclear in the form of new policies, projects, investments and technological advances, such as small modular reactors (SMRs).
It provides a comprehensive assessment of the current situation, identifying the major challenges that need to be addressed to build on the current momentum and enable a new era to take hold. This includes insights on how to finance new nuclear projects while ensuring reliable and diversified supply chains for building and fueling them.
New projects on time and on budget
“It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear set to generate a record level of electricity in 2025,” said IEA Executive Director Fatih Birol.
“In addition to this, more than 70 gigawatts of new nuclear capacity is under construction globally, one of the highest levels in the last 30 years, and more than 40 countries around the world have plans to expand nuclear’s role in their energy systems."
"SMRs in particular offer exciting growth potential. However, governments and industry must still overcome some significant hurdles on the path to a new era for nuclear energy, starting with delivering new projects on time and on budget – but also in terms of financing and supply chains.”
New generation capacity
New generation capacity from a range of technologies will be needed to keep pace with the rapid demand growth
As the world’s second-largest source of low-emissions electricity after hydropower, nuclear power now produces just under 10% of the global electricity supply.
The increasing use of electricity – to power everything from industry and air conditioning to electric vehicles and data centers amid the rise of artificial intelligence – is accelerating the growth in power demand, which is set to rise six times as fast as overall energy consumption in the coming decades, based on the policy settings.
New generation capacity from a range of technologies will be needed to keep pace with the rapid demand growth, including those that can provide firm and flexible output such as nuclear.
Nuclear technology landscape
Most of the existing nuclear power fleet is now in advanced economies, but many of those plants were built decades ago. Meanwhile, the global map for nuclear is changing, with the majority of projects under construction in China, which is on course to overtake both the United States and Europe in installed nuclear capacity by 2030.
Russia is also a major player in the nuclear technology landscape. Of the 52 reactors that have started construction worldwide since 2017, 25 are of Chinese design and another 23 are of Russian design. Similarly, the report shows how the production and enrichment of uranium, the fuel that goes into nuclear reactors, are highly concentrated.
Uranium production and enrichment
“Today, more than 99% of the enrichment capacity takes place in four supplier countries, with Russia accounting for 40% of global capacity, the single largest share,” Dr. Birol said.
“Highly concentrated markets for nuclear technologies, as well as for uranium production and enrichment, represent a risk factor for the future and underscore the need for greater diversity in supply chains.”
introduction of SMRs
Innovations in nuclear technologies are helping to drive momentum behind new projects, the report finds
Innovations in nuclear technologies are helping to drive momentum behind new projects, the report finds. SMRs, a type of smaller scale nuclear power plants that are quicker to build with greater scope for cost reductions, are drawing increasing interest from the private sector. The report highlights how the introduction of SMRs could lead to lower financing costs.
With the right support, SMR installations could reach 80 GW by 2040, accounting for 10% of overall nuclear capacity globally. However, the success of the technology and speed of adoption will hinge on the industry’s ability to bring down costs by 2040 to a similar level to those of large-scale hydropower and offshore wind projects.
investible energy source
A new era for nuclear energy will require a lot of investment. In a rapid growth scenario for nuclear, annual investment would need to double to USD 120 billion already by 2030. Given the scale of the infrastructure investment required, the rollout of new nuclear projects cannot rely exclusively on public finances.
IEA analysis shows that ensuring the predictability of future cash flows is key to bringing down financing costs
IEA analysis shows that ensuring the predictability of future cash flows is key to bringing down financing costs and attracting private capital to the nuclear sector.
The report highlights that the private sector is increasingly viewing nuclear energy as an investible energy source with the promise of firm, competitive, clean power that can serve energy-intensive operations 24/7.
Stable regulatory frameworks
Notably, big names in the technology sector are signing power purchase agreements with developers to provide electricity for data centers and artificial intelligence.
To take advantage of the opportunities that nuclear power offers, governments must be prepared to provide the strategic vision alongside stable regulatory frameworks that will give the private sector confidence to invest. The report details how incentives and public finance more broadly can unlock the investment needed to deliver greater clean and reliable power from nuclear.
