More than 70 gigawatts of new nuclear capacity is under construction globally, one of the biggest in the last 30 years. Over 40 countries around the world have plans to expand the role of nuclear power in their energy systems, according to a new report by the International Energy Agency (IEA), titled ‘A new era of nuclear energy’.

“It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear power set to generate a record level of electricity in 2025,” said IEA Executive Director Fatih Birol, in the report. 

Small modular reactors (SMRs), in particular, offer exciting growth potential. With the right support, SMR installations could reach 80 GW by 2040, accounting for 10 per cent of overall nuclear capacity globally. However, governments and industry must still overcome 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. 

It will require a lot of investment. In a rapid growth scenario for nuclear, annual investment would need to double to $120 billion by 2030. Given the scale of 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 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. Notably, big names in the technology sector are signing power purchase agreements with developers to provide electricity for data centres and artificial intelligence. 

Risk factors

The IEA report, however, offers a word of caution. Today, more than 99 per cent of the enrichment capacity takes place in four supplier countries, with Russia accounting for 40 per cent of global capacity, the single largest share. “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,” says Dr Birol in the report.