The International Energy Agency (IEA) has released a comprehensive report on the resurgence of nuclear energy, predicting that the sector is poised to enter a new era. With global demand for electricity growing rapidly, nuclear energy stands at the forefront of providing clean, secure, and low-emissions power. The IEA’s “Path to a New Era for Nuclear Energy” report outlines the renewed momentum behind nuclear energy. This momentum is driven by technological advancements, new policies, and investments.
It also evaluates the challenges that need to be tackled to fully harness the potential of nuclear power. This includes the role of small modular reactors (SMRs) in reshaping the landscape.
NUCLEAR ENERGY’S GROWING ROLE IN THE GLOBAL ENERGY LANDSCAPE
Today, nuclear energy is the second-largest source of low-emissions electricity worldwide, generating nearly 10% of the global electricity supply. As the world increasingly relies on electricity to power industries, the demand for power is set to rise rapidly. This includes powering electric vehicles, data centres, and technologies like artificial intelligence. The demand for power is rising six times faster than overall energy consumption. This growth underscores the need for new, reliable, and flexible power generation options. Nuclear energy plays a crucial role in meeting future demand.
In 2025, nuclear energy is expected to set a new record in electricity generation. Over 70 gigawatts of new nuclear capacity are under construction globally. These are the highest levels seen in the last 30 years. Over 40 countries are planning to expand nuclear’s role in their energy systems. They are particularly focusing on SMRs. SMRs offer exciting prospects for growth in the sector. However, governments and industry leaders must overcome significant challenges. They need to roll out new projects successfully. The challenges include delivering them on time and on budget, securing financing, and ensuring diversified supply chains.
CHINA AND RUSSIA LEADING NUCLEAR EXPANSION
The global map of nuclearenergy is rapidly changing, with China emerging as a dominant force in nuclear expansion. By 2030, China is on track to surpass both the United States and Europe in total nuclear capacity. Notably, 25 of the 52 reactors currently under construction worldwide are of Chinese design. Another 23 reactors are of Russian design. This shift highlights the growing role of these nations in nuclear technology. It underscores the importance of diversifying nuclear supply chains. This is necessary to reduce dependence on a handful of countries.
Russia, in particular, controls 40% of global enrichment capacity, a fact that raises concerns about future supply chain vulnerabilities. The report emphasizes the need to create more diverse markets for nuclear technologies. It also highlights the importance of expanding uranium production. These measures are suggested to mitigate potential risks.
TECHNOLOGICAL ADVANCEMENTS: THE PROMISE OF SMALL MODULAR REACTORS (SMRS)
The advancement of nuclear technologies is a key driver behind the renewed interest in nuclear energy. Small Modular Reactors (SMRs) are particularly noteworthy. These smaller-scale reactors are quicker to build and offer the potential for significant cost reductions. SMRs could play a critical role in addressing global power needs. They might account for 10% of global nuclear capacity by 2040. Installations could reach 80 GW.
The widespread adoption of SMRs will depend on the industry’s ability to reduce costs. These costs need to reach competitive levels. They should be similar to those of large-scale hydropower and offshore wind projects. The successful deployment of SMRs could lower financing costs. This provides a more affordable and efficient path forward for the nuclear sector.
INVESTMENT CHALLENGES: FINANCING A NEW ERA FOR NUCLEAR ENERGY
Realizing the full potential of nuclear energy will require substantial investment. In a rapid growth scenario, annual investment in nuclear would need to double to USD 120 billion by 2030. Given the scale of the infrastructure required, public financesalone will not suffice. The IEA’s report highlights the importance of ensuring predictable cash flows to attract privatecapital to the nuclear sector.
The private sector is increasingly recognizing nuclear energy as an investible energy source due to its ability to provide firm, competitive, and clean power on a 24/7 basis, especially for energy–intensiveindustries such as data centres and AI operations. Power purchase agreements (PPAs) are already being signed by tech giants to secure electricity for these operations, further driving investment in nuclear energy.
Governments must provide the strategicvision and stableregulatoryframeworks needed to inspire confidence in the private sector and unlock the investment required for a new nuclear era. The report also suggests that targeted incentives and public finance initiatives will be key to accelerating the growth of nuclear energy and providing greater cleanand reliable power globally.
