Accelerating demand for electricity – rising six times faster than overall energy consumption – is putting pressure on the global energy sector to adopt sustainable solutions, including nuclear energy.

This is according to a new International Energy Agency (IEA) report, The Path to a New Era for Nuclear Energy, published this month. The report notes the need for stable, low-emission electricity sources and positions nuclear energy as a key component in the global energy mix. Nuclear energy provides just under 10% of global energy supply today.

Significant investments are being funnelled into new projects and the extension of existing reactors. Over 40 countries globally have adopted supportive nuclear policies, says Fatih Birol, the IEA’s Executive Director.

Unprecedented levels in 2025

Nuclear generation from the world’s fleet of 420 reactors is on track to reach unprecedented levels in 2025 – boosted by Japan’s restarted production, France’s completion of maintenance projects and new reactors coming online in China, India, Korea and Europe, the report says.

Currently, 63 nuclear reactors, representing 71 GW of capacity, are under construction worldwide – three quarters are located in emerging economies with China alone accounting for half. In addition, the operating lifetimes of more than 60 reactors worldwide are being extended – almost 15% of the total nuclear fleet.

Annual investment in nuclear energy increased by nearly 50% in three years, exceeding US$60 billion.

According to the report, China is projected to surpass the US and Europe in installed nuclear capacity by 2030. Of the 52 reactors constructed since 2017, 48 are either of Chinese or Russian design.

While emerging economies are forging ahead, advanced economies with ageing fleets face challenges, the report notes. Most existing nuclear power plants in developed countries are more than 36 years old while the United States and France are also grappling with delays and cost overruns in new large-scale reactor projects. Despite these hurdles, nuclear energy accounted for 17% of electricity generation in advanced economies in 2023 with France leading at 65% and the Slovak Republic at over 60%. The European Union’s share has declined from 34% in 1997 to 23% today. In the US, which has the largest nuclear fleet globally with 94 reactors, it is less than 20%.

In emerging markets, nuclear remains a smaller share of the energy mix, accounting for just 5% of electricity generation in 2023, with reactors in 13 countries. Ukraine has 50% of the nuclear share of these with Belarus at 35%. Four others – Armenia, the United Arab Emirates, the Russian Federation and Pakistan – each have a share of over 10%.

Small modular reactors: A nuclear sector game changer

Small modular reactors (SMRs), which are faster to build and less expensive than traditional nuclear plants, are attractive to private investors. The report notes plans for up to 25 GW of SMR capacity with the US, China, India, the European Union and United Kingdom leading deployment efforts. The first SMRs are expected to become operational by 2030.

Under current policies, SMR capacity could reach 40 GW by 2050. However, if tailored policies and streamlined regulations are implemented, the report says this figure could triple to 120 GW with over 1 000 SMRs in operation globally. Achieving this potential would require substantial investment – rising from less than US$5 billion today to US$25 billion by 2030 and US$670 billion by 2050.

The report also notes risks in the concentrated markets for nuclear technologies and uranium with Russia holding 40% of global enrichment capacity. It emphasises the need for diverse supply chains to support nuclear expansion. Governments should provide strategic direction and financial incentives to attract private capital as public financing alone cannot cover the required infrastructure investment. Although the private sector increasingly sees nuclear as a viable investment, mitigating the risks of cost overruns and delays is essential for financing growth. In a rapid growth scenario, annual investments in nuclear energy must double to US$120 billion by 2030, the report says.