A recent report from the International Energy Agency (IEA) suggests that renewed momentum in nuclear energy could usher in a transformative era for the low-emissions power source, just as global electricity needs are rapidly increasing.

Titled The Path to a New Era for Nuclear Energy, the report outlines how new policies, increased investment, active projects, and technological innovations—particularly the rise of small modular reactors (SMRs)—are reviving interest in nuclear power. It provides a thorough overview of the sector’s current status and highlights key challenges to sustaining this momentum, including financing mechanisms and the need for robust, diversified supply chains for plant construction and fuel sourcing.

“Nuclear energy’s revival, which the IEA forecasted years ago, is now clearly materializing, with nuclear power set to reach record electricity generation levels by 2025,” said IEA Executive Director Fatih Birol. “We’re seeing over 70 gigawatts of new nuclear capacity currently under construction—one of the highest figures in three decades—and more than 40 countries are actively planning to expand their nuclear portfolios. SMRs, in particular, offer major growth potential. But realizing this potential requires overcoming critical challenges such as completing projects within budget and on schedule, securing financing, and stabilizing supply chains.”

Nuclear energy currently supplies just under 10% of global electricity and is the second-largest source of low-carbon power after hydropower. As global electricity demand surges—fueled by increasing reliance on electric vehicles, industrial electrification, AI-powered data centers, and climate control—there’s a growing need for steady, adaptable power sources like nuclear energy. The IEA projects electricity demand to grow at a rate six times faster than overall energy demand in the coming decades.

While much of the world’s current nuclear fleet exists in developed economies and dates back several decades, the nuclear landscape is shifting. China is leading global nuclear expansion and is set to surpass both the U.S. and Europe in total installed capacity by 2030. Russia also plays a key role in nuclear development. Since 2017, of the 52 nuclear reactors under construction globally, 25 are Chinese-designed and 23 are Russian-designed. Additionally, uranium enrichment—a critical part of the nuclear fuel cycle—is dominated by just a few countries, with Russia accounting for 40% of global enrichment capacity.

“This heavy concentration of technological and fuel resources poses supply chain risks,” Birol warned. “Diversifying sources of nuclear technology, uranium production, and enrichment is essential to securing the industry’s future.”

Technological breakthroughs—especially in SMRs—are playing a crucial role in revitalizing the sector. SMRs are compact, quicker to build, and offer opportunities for significant cost reductions. These systems are attracting increased interest from the private sector due to their potential for lower financial risk. With proper backing, SMRs could provide up to 80 gigawatts of global capacity by 2040, accounting for 10% of total nuclear generation. However, this will depend on reducing production and deployment costs to levels comparable with other large-scale renewable sources such as offshore wind and hydropower.

A nuclear renaissance will also require massive financial investment. To achieve a rapid expansion scenario, annual global investment in nuclear must rise to USD 120 billion by 2030—twice today’s levels. Because public funding alone is unlikely to meet this demand, private investment will play a pivotal role. According to the IEA, ensuring predictable, long-term revenue streams is critical to reducing financial risks and attracting private capital. Encouragingly, more private investors are viewing nuclear as a viable source of reliable, low-carbon energy. Major tech firms are now signing long-term power purchase agreements with nuclear developers to power energy-intensive operations such as AI and data centers.

To fully capitalize on nuclear power’s potential, governments must create stable policy and regulatory environments that encourage private sector participation. The IEA emphasizes that strategic leadership, smart public financing, and targeted incentives will be crucial to unlocking the full capabilities of nuclear energy and ensuring it contributes meaningfully to the world’s clean energy transition.

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