In November, the International Energy Agency (IEA) released its World Energy Outlook presenting an overview of the past and present state of affairs across energy sectors, forecasting the future, and outlining key challenges and risks. The nuclear industry is growing, but not as fast as other energy sectors.
The IEA report posits that instability is the defining factor of the current global reality, and energy security is the primary concern.
The main risks highlighted by the IEA include geopolitical turbulence and conflicts, restrained supply amid rising demand in the oil market, constraints on the supply of critical minerals, cyber threats, and industrial and climate risks. “Decisions taken by energy policy makers will be crucial to address these risks, but they do so against a complex backdrop,” the report notes.
The world continues to face an energy shortage. Energy remains — as it often has in the past — at the heart of modern geopolitical tensions. Under these conditions, countries strive to ensure energy security and the availability of energy resources, but they pursue this goal through different means: “Some, including many fuel-importing countries, lean towards renewables and efficiency as solutions. Others focus more on ensuring ample supplies of traditional fuels,” the authors believe.
Every type of energy generation is on the rise: “Renewables set new records for deployment in 2024 for the 23rd consecutive year. Oil, natural gas and coal consumption, and nuclear output, all reached record highs as well,” the report states.
Another important trend noted by IEA analysts is the declining intensity of efforts to reduce emissions at both national and international levels. Since 2019, coal demand — driven largely by China — has grown 50% faster than demand for natural gas, the next fastest-growing fossil fuel. This is a key reason for the continued rise in energy-related emissions.
Since 2010, global energy demand has increased by more than 20%. In 2024, it continued to climb, rising by 2% to over 650 exajoules (EJ). This is much higher than the average growth rate of 1.4% recorded between 2010 and 2023. Fossil fuels satisfied nearly 80% of total energy demand in 2024. Wind and solar generation show steady growth (nearly 700 TWh). Nuclear power output, having dipped in the early 2010s, has since risen due to new units being brought online and the restart of previously halted reactors. The report calls this a ‘strong increase,’ yet compared to other energy sources, the volume of electricity from nuclear generation remains low (surpassing only biomass).
The increase in global installed nuclear capacity also looks extremely modest, averaging only 8 GW per year over the last decade. By comparison, global installed solar capacity grew tenfold over the same period, reaching 540 GW in 2024.
Energy investment in 2024 rose to USD 3.2 trillion, significantly higher than the USD 2.6 trillion average of the previous decade. The chart presented by the IEA reveals that nuclear energy is underinvested not only compared to popular and fast-growing segments like energy efficiency, renewables, and battery storage, but also compared to sectors like oil, gas, and even coal. A 70% increase in investment over the last five years sounds positive, but when compared to the doubling of investment in solar panels over the same period, it is clear that the growth rate (especially given the lower base) is, unfortunately, small.
Europe and the US have ceased to be leaders in the nuclear industry. “Nuclear power experienced significant delays and cost overruns in recent years for large-scale reactors in Europe and the United States, which on average have been completed eight years later than planned and cost 2.5-times as much as originally estimated,” the report says. The report mentions modestly, though, that some nuclear projects in Russia, China, and Korea were completed closer to their original schedules and budgets.
Traditionally, the IEA presents several energy development scenarios in its World Energy Outlook. The Current Policies Scenario (CPS) provides a snapshot of existing policies and regulations, offering a cautious assessment of the speed at which new energy technologies are deployed and integrated into the grid. The Stated Policies Scenario (STEPS) includes officially proposed but not yet enacted policies, as well as other strategic documents indicating the direction of energy development. This scenario assumes that barriers to technology adoption are lower than in the CPS. These two scenarios appear to be assessed as the most probable. The report also presents the Net Zero Emissions by 2050 (NZE) scenario, charting a path to reducing global energy-related CO2 emissions to zero by 2050, and the Accelerating Clean Cooking and Electricity Services Scenario (ACCESS).
Under this scenario, electricity demand grows everywhere. India and Indonesia show the highest growth. Solar and wind power are expected to become competitive in many regions, but their deployment will face challenges that slow growth. Consequently, annual solar capacity additions average 540 GW by 2035, which is, by the way, comparable to the capacity installed in 2024 alone. Coal remains the largest source of global electricity generation until 2035. Construction of new nuclear power plants accelerates in the 2030s: “More than 40 countries have policies in place to expand the use of nuclear power, investment has doubled since 2015, and there is a growing pipeline of projects under development: as a result, global nuclear capacity in the CPS expands by one-third by 2035.” By 2050, growth exceeds 80%. IEA analysts cite reactor restarts in Japan and new builds in the US, Japan, Korea, and France as sources of this growth.
To set the record straight, growth will be driven primarily by power units in Russia and China, as well as those power reactors in Europe, Asia, and Africa that Rosatom is currently building or preparing to build. In accordance with Russia’s national Power Plant Location Master Plan 2042, the country will commission 38 nuclear power units with a total capacity of 29.3 GW. The share of nuclear in the Russian energy mix will rise from 18.9% in 2023 to 24% in 2042. Rosatom’s project pipeline includes 41 large and small power units in 11 countries around the world.
“China accounts for close to half of all nuclear capacity under construction today, and is on track to become the world’s largest nuclear power operator around 2030,” the report admits.
Despite nuclear energy growing at roughly the same rate as other energy sources (e.g., coal) over the next decade in the CPS, installed nuclear capacity in 2035 remains at the lowest level in absolute terms compared to other sources—due to the low base.
This scenario is designed to reflect the prevailing direction of the energy sector development even if national rules and regulations are not yet legally codified.
According to this scenario, renewable energy generation will be able to meet all additional global energy demand from the 2030s onwards. The share of renewables in electricity generation will rise from one-third today to more than half by 2035 and two-thirds by 2050, primarily driven by solar and wind combined with battery storage. Nuclear power generation grows by 40% by 2035, maintaining its share of total electricity production at around 9%. The IEA has revised its forecast for nuclear demand in this scenario, projecting it to be 4% higher by 2035 than predicted a year earlier. From 2035 to 2050, if the STEPS scenario materializes, nuclear energy will grow by an additional 40% but will still remain at around 9%.
Under both scenarios, investment in nuclear energy increases by 2035 as several countries make final investment decisions on large new reactors. Investment rises by 40% from current levels to over USD 100 billion per year in the STEPS and by roughly 30% to over USD 90 billion per year in the CPS. Looking at investments in other energy segments, it becomes obvious that nuclear investment figures are quite small. For instance, global investment in power grids rises to around USD 715 billion in 2035 in the CPS and USD 730 billion in the STEPS.
The state of affairs and the most probable scenarios presented in the IEA report show that nuclear generation — a high-tech industry that meets demands for environmental sustainability, low carbon emissions, and stable output — has the smallest share among all other types of electricity generation.
Given the overall growth in the consumption of electricity and, in general, energy resources worldwide, the nuclear industry will have to ‘run very fast’ just to maintain its current share (about 9%) in the global energy mix.
To achieve better results, it will have to ‘run even faster.’ This requires appropriate policy decisions, technologies, investment, and personnel.
Fortunately, the investment climate is gradually changing for the better. In late November, the Asian Development Bank (ADB) amended its policies to allow investment in nuclear energy projects. The ADB also signed a cooperation agreement with the IAEA to support countries in the Asia-Pacific region exploring the use of nuclear energy within their energy and development strategies. A similar decision was previously made by the World Bank.
One can hope that these decisions and agreements will be followed by others. Such investments will enable the construction of new large and small reactors around the world, providing countries with sustainable electricity, people with interesting high-paying jobs, and fostering the development of science and technology.
Photo by: Leningrad NPP, Rosatom Renewable Energy JSC, Unsplash
