A new analysis from the OECD Nuclear Energy Agency (NEA) assessing the current global status and future of nuclear identifies some significant challenges.
Global aspirations to significantly increase nuclear have clearly gathered momentum over recent years and the NEA notes that governments in both OECD countries and the Global South are repositioning nuclear as a core component of energy security, the environment and industrial competitiveness strategies. But the agency is equally emphatic that meeting nuclear expansion ambitions will require a massive effort to expand the nuclear workforce, build supply chains and improve the availability of finance.
The new report, ‘Nuclear Energy Outlook: Global Installed Capacity to 2050 and Beyond,’ describes four scenarios for the sector’s evolution to 2050, by which time nearly 40 nations have pledged to triple installed nuclear capacity worldwide. While the low scenario is more of a business-as-usual outcome which sees recent momentum peter out and any new projects offset by plant retirements, at the opposite end comes the transformative scenario. Should this come to pass, global capacity does indeed triple, reaching about 1,324GWe by 2050. This scenario is driven by sustained long-term national goals, including the US plan to quadruple nuclear capacity by 2050.
However, to be realised, this policy framework is also combined with a broad strategy for long-term operation, which the report says is essential. Accelerated large-scale new build and significant SMR deployment are two other key pillars in this transformative scenario. The NEA states that in OECD countries, this will require major policy changes, as well as improvements in project execution, industrial capability and financing.
Indeed, the NEA points out that global capital expenditure on new nuclear has averaged around US$30bn per year – mainly been driven by China and Russia – whereas the OECD contribution is less than half that. According to this analysis, OECD countries would need a massive increase annual capital investment for the transformative scenario to be achieved. Even during the 2030s, the transformative scenario could see OECD capital requirements approach $200bn per year, the NEA says.
The NEA does chime with a forecast from the beginning of the year by GlobalData, parent company of NEi. Their analysis indicates investments in nuclear power will grow reach $41.8bn by 2030, a marked acceleration as governments, utilities, and private investors reassess the technology.
According to GlobalData, new investment in nuclear power is estimated to reach a compound annual growth rate (CAGR) of 8% between 2025 and 2030. As with the NEA report, GlobalData emphasises the role of SMR deployments and lifetime extensions for existing reactors. They observe that more than 60 reactors or around 15% of global capacity have received lifetime extensions over the last five years alone.
These are evidently encouraging developments. Critically though – as both these reports point out – nuclear power has become a strategic pillar for energy security for nations seeking to reduce dependence on volatile fossil fuel markets. Russia’s attack on Ukraine and subsequent sanctions intensified demand for stable domestic energy resources and now recent developments in the Middle East have raised the spectre of a full-blown energy shock of the kind not seen since the 1970s.
The result is a far more concerted focus on rapid nuclear expansion. Will that materialise into the hundreds of billions of dollars a year of new investment required for transformation? Simply consider the cost of not having security of energy supply.
