Most projects are in China, which is set to be world leader for installed reactor capacity by 2030
Nuclear power generation is likely to break records in 2025 as electricity demand accelerates – but costs, project overruns and financing must be addressed, particularly in the US and Europe where new projects have exceeded budgets and seen delays, according to a report by the International Energy Agency (IEA).
The agency said in the report, The Path to a New Era for Nuclear Energy, that renewed momentum behind nuclear energy has the potential to open a new era for nuclear power with 70 GW of new nuclear capacity under construction globally, one of the highest levels in the last 30 years. More than 40 countries around the world have plans to expand nuclear’s role in their energy systems, it said.
Small modular reactor in particular offer exciting growth potential with the first commercial units expected online in the mid-2030s.
China, India, South Korea and Europe are likely to have new reactors come on stream, while several in Japan are also forecast to return to generation, and French output should increase.
Electricity demand is also expected to increase around the world, fuelled largely by the move to a low-carbon economy. Data centres, electric vehicles and heat pumps, as well as many low-carbon industrial processes, require electricity rather than oil and gas.
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, the IEA said.
IEA executive director Fatih Birol said there is “fresh impetus” behind nuclear in the form of new policies, projects, investments and technological advances.
Action Needed On Financing And Supply Chains
But he warned there are 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 fuelling them.
Governments and industry must still overcome some significant hurdles, starting with delivering new projects on time and on budget.
Birol said in the US and Europe new nuclear projects have come online “much later and much more expensive than planned”. New plants have seen delays of about eight years and have been about 2.5 times over the original cost.
“There is a major issue of performance of nuclear companies in the US and Europe,” Birol told a press conference on 16 January. “This is one of the reasons why we have seen a decline in the share of nuclear in the US and Europe. In Europe the nuclear share was 35% in 1990s. It is now 25% and in 10 years it will be less than 15%.”
He said that in the US and Europe the political appetite for nuclear had not been strong and the industry had not performed well.
China, Birol said, has stable policies that support the construction of new nuclear plants. Half of the commercial nuclear plants under construction are Chinese. In five years, China will overtake US and Europe and will be the number one nuclear power in the world, he said.
The Global Map Is Changing
The IEA said most of the existing nuclear power fleet is 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 US 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.
According to the report, a new era for nuclear energy will require significant investment. In a rapid growth scenario for nuclear, annual investment would need to double to $120bn (€116bn) by 2030. Given the scale of the infrastructure investment required, the rollout of new nuclear projects cannot rely exclusively on public finances, the report said.
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.
Birol said private investors, major banks and tech companies are showing interest in the European nuclear industry, but governments need to lower risks to encourage investment by guaranteeing contracts and cutting regulation.
The private sector started to invest more in nuclear in 2024 to cover growing electricity demand for data centres and artificial intelligence, but long delays and cost overruns for recent projects have hurt European competitiveness.
