Global Nuclear Investment of US$250 Billion a Year Needed to Triple Capacity

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

To meet global demand for nuclear energy, annual investment in the sector will need to average US$250 billion per year to support the ambition of tripling nuclear power capacity by 2050.

Governments, developers and financial institutions will have to spend an average of US$250 billion a year out to 2050 to support ambitious goals of tripling nuclear power's capacity. New analysis released by the World Nuclear Association in its Roadmap to Mainstream Finance: The Path to Scale Nuclear Energy report, finds that if the stated nuclear goals of the world's governments are reached then nuclear power capacity will more than triple from 403 gigawatts (GW) today to 1,446 GW by 2050, requiring a total investment of US$6 trillion. The costs factor in all aspects of the process, from mining to reactor construction to decommissioning and storage. The report was carried out with input from leading firms in the nuclear and financial sectors. According to Industrial Info Resources data, there are 976 nuclear-related projects globally worth more than US$2.1 trillion in investment. Leading the way are 178 grassroot nuclear projects worth nearly US$960 billion and 148 unit additions worth US$750 billion. 

Nuclear Resurgence

"After decades of uneven progress, nuclear energy is re-emerging as a core component of national energy strategies across a growing number of markets", the World Nuclear Association stated. It is being driven by three structural trends: rising demand for clean, reliable power; the imperative of energy security; and the emergence of new sources of electricity demand, including electrification, industrial growth and data center expansion. It cited the International Energy Agency (IEA), which predicts that from 2026 to 2030 there will be 50% more electricity demand growth per year than the previous decade. While emerging economies will drive much of this growth, led by China, India and southeast Asia, demand is rising rapidly in advanced economies also, thanks to the rise of AI, data centers, advanced manufacturing and electric vehicles (EVs). Today, 38 countries have signed the COP28 Declaration to Triple Nuclear Energy Capacity by 2050, boosted this year by the addition of China, Brazil, Italy and Belgium. That Declaration sets the target at 1,200 GW. 

The Challenge 

It will require "significant investment from private, as well as public sources of finance" to help nuclear power achieve industrial scale worldwide as opposed to in a few existing markets today. Capital will be needed not only for construction, but also to develop and manage the full nuclear fuel cycle from creation to storage. "The challenge is not a shortage of capital," said Dr. Sama Bilbao y León, director general of the World Nuclear Association. "The challenge is creating the confidence, capability and investment architecture that allows capital to flow to nuclear projects at scale. The World Nuclear Investment Guide gives financial institutions the tools, frameworks and expertise they need to assess nuclear projects with the same confidence they bring to other major infrastructure investments."

Changes Required

The Investment Guide sets out tasks for governments, financial institutions and project developers to address, with much of the heavy-lifting being required by governments to create a positive and stable nuclear investment environment. 

For Governments:

• Recognize that nuclear energy is a central pillar in meeting global climate goals, especially given the expected increase in electricity and energy demand.
• Integrate nuclear energy into long-term decarbonization and energy security planning, alongside renewables and other low-carbon technologies.
• Set durable, actionable nuclear policies and industrial strategies to enable long-term investment and to maintain industrial capabilities, workforce and supply chains.
• Support operating lifetime extension programmes to 60-80 years where technically feasible, avoiding premature closures.
• Reform electricity markets to ensure equitable treatment of nuclear energy alongside other low-carbon sources.
• Support the acceleration of licensing, siting, and financing mechanisms to facilitate an increase in construction rates.

For Financial Institutions:

• Implement technology-neutral lending and ESG policies to ensure nuclear and other low-carbon sources are evaluated using equivalent criteria.
• Support nuclear deployment in emerging economies through financing frameworks, guarantees and multilateral partnerships.

For the Nuclear Industry:

• Expand manufacturing and supply chain capacity, including fuel cycle infrastructure.
• Optimize series build to reduce costs and shorten build times.
• Develop large-scale deployment strategies to meet post-2035 demand, including for non-grid applications utilizing novel reactor technologies.

Positive Industry Support

Ananya Modi, managing director at Rothschild & Co, said: "The challenge for nuclear power is as much about capital as it is about technology. We often hear about the need for nuclear power to become more standardised if it is to become scalable and cost-effective, and financing is a core part of that transition. The World Nuclear Association has taken on an important and ambitious task in bringing together people who operate and advise across multiple jurisdictions and technology classes. That collaboration is essential if we are to meet the urgent demand for capital that will support the exponential growth of this critical asset class."

Luba Kotzeva, chief executive officer of Etara, added: "The transition from strategic sovereign capital to mainstream finance will be one of the defining challenges for the nuclear sector. This first module, of the World Nuclear Investment Guide, provides a practical roadmap for bringing new sources of capital into the market."

Key Takeaways

• Governments, developers and financial institutions will have to spend an average of US$250 billion a year out to 2050 to support a tripling of nuclear power's capacity.
• Industrial Info Resources is tracking 976 nuclear-related projects globally worth more than US$2.1 trillion in investment.
• Emerging economies led by China, India and south-east Asia will drive much of the demand for more power.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).