In 1997, over one-third of Europe’s electricity came from nuclear reactors. By 2023, that proportion had dropped to 23%.
Yet worldwide, nuclear output is expected to reach its highest level on record in 2025, propelled by 70 gigawatts of capacity under construction and the reactivation of dormant reactors in Japan and elsewhere. These shifts illustrate a dynamic tension: advanced economies have reduced their reliance on nuclear, while emerging markets are ramping up. Evidence suggests a recalibration is under way, framed by energy security concerns, the acceleration of data-hungry technologies, and revived policy interest in long-term power stability.
New demand drivers are fueling nuclear’s momentum (data centers alone present a near-constant load that aligns well with nuclear’s baseload profile). Recent commitments from large technology firms highlight how stable supply and predictable costs can attract private capital, especially if smaller-scale nuclear facilities prove more economically manageable. The pivot toward small modular reactors (SMRs) is central to this narrative, reshaping cost assumptions and investment strategies.
Shifting Market Leadership Backed by Numbers
For decades, advanced economies dominated nuclear technology. The United States, European nations, and Japan accounted for the world’s principal fleet, pushing nuclear’s share of total electricity to double digits by the late 20th century. Several factors then converged—public opinion challenges, lengthening construction times, and cost overruns—leading to a protracted slowdown. This shifted market leadership toward emerging economies.
Between 2017 and 2024, 52 new reactors broke ground worldwide, with China leading at 25. Russia followed closely with 23. During the same period, advanced economies broke ground on only four. Over the next five years, China is set to surpass Europe and the United States in total nuclear capacity, thanks to a carefully managed pipeline of large-scale reactor projects. Evidence of this shift is clear in global construction patterns: new nuclear in emerging economies continues to outpace many older fleets, despite recent policy reversals in some advanced nations.
Shoring Up Energy Security Through Supply Chain Diversification
Amid nuclear’s resurgence, a key vulnerability is the concentration of certain parts of the supply chain. About 40% of the world’s uranium enrichment capacity currently sits in Russia. Such dominance underscores concerns that one of nuclear power’s primary benefits—energy security—could be undermined if supply chains remain too narrow. Several governments are responding by accelerating plans to diversify enrichment and fuel production capabilities. This push aims to safeguard nuclear’s role as a stable, low-carbon option unexposed to the same commodity price swings that buffet some other energy sources.
Data-Driven Insights on SMR Potential
Ongoing innovation is reframing nuclear as more flexible than many once believed. SMRs exemplify this shift by targeting smaller investment outlays and faster build times. Studies indicate at least 25 gigawatts of SMR capacity—mostly in the United States—are in advanced planning or under development. China is also pursuing SMR designs for electricity, heating, and desalination, highlighting cross-sector uses beyond traditional power generation.
SMRs may achieve a cost in the range of USD 60–80 per megawatt-hour within 15 years. This estimate is more conservative than projections by reactor vendors but still places SMRs in competition with large-scale hydropower, offshore wind, and certain natural gas systems, depending on gas prices. Emerging markets see smaller upfront costs as a key advantage. Larger power plants can exceed USD 10 billion and span a decade in construction, whereas an SMR might need around USD 2 billion, making it more approachable for public-private partnerships and commercial lenders. Synergies with data centers add another dimension, as tech firms often have strong credit ratings and require stable, round-the-clock power.
Cost Overruns and Investment Realities
Historical data highlight persistent challenges in advanced economies: newly completed nuclear projects often run eight years behind schedule at 2.5 times their initial budget. Such overruns have dampened investor appetite. Regulatory uncertainties and fragmented electricity markets further complicate the picture. Most existing large nuclear installations date to a time when many power markets were regulated, providing assured revenue streams over decades. Today’s competitive markets demand new financing structures—long-term contracts, direct guarantees, or public-sector risk sharing—to offset capital risks.
Interviews with major financial institutions confirm a willingness to fund nuclear if stability, regulatory clarity, and derisking measures are in place. The projected doubling of global nuclear capacity to around 870 gigawatts by 2050 would require more than USD 2.5 trillion in investment, with a major share going toward new large-scale plants and about a quarter earmarked for SMRs. Lifetime extensions—often more cost-effective than building from scratch—draw significant capital, especially in the United States, France, and Japan.
Intensifying Competition and Technology Exports
Nations vying to regain market leadership are focusing on standardized, scalable designs. Several U.S. and European models already see renewed momentum, propelled by updated government policies and export strategies. By 2030, the share of reactor designs originating from Europe, the United States, Japan, and Korea is expected to climb from 10% to 45%, surpassing 60% soon after. China’s current dominance in large-scale builds may taper after the 2030s, opening space for multiple suppliers.
The growing diversity of nuclear technology providers benefits countries seeking reliable, dispatchable capacity as part of a balanced energy mix. In many advanced economies, nuclear’s expansion will run in parallel with a continued surge in renewables. In emerging markets, nuclear can offset the heavier reliance on fossil fuels and help meet industrial electricity and heat demand. Where data center expansions push local grids to capacity, nuclear offers a firm supply that may be easier to finance with private capital eager for stable returns.
Underlying Signals and Strategic Takeaways
Rising power demand from electric vehicles, industrial electrification, and digital infrastructure is accelerating the need for stable baseload capacity. Although renewables will supply most of the growth, nuclear power—especially SMRs—looks increasingly poised to play a complementary role. When combined with Renewables, expanded nuclear capacity may bolster grid resilience and reduce dependence on imported fossil fuels.
Supply chain diversification remains crucial. The present concentration in uranium enrichment underscores the necessity of a more balanced approach. Governments that wish to bolster nuclear power’s role face a dual challenge: sustaining investor confidence in large-scale, capital-intensive projects while facilitating SMR deployment through standardized design approvals and streamlined safety reviews.
Policy stability emerges as the fulcrum. Clear regulations, long-term off-take agreements, and innovative financing structures could encourage more private sector participation. The history of nuclear buildouts in advanced economies shows that cost overruns thrive in conditions with shifting political support. When frameworks remain consistent over a plant’s entire lifecycle, developers can better manage timelines and costs.
A global nuclear resurgence is not a foregone outcome, but data indicate that momentum is genuine. Multiple countries—over 40 by recent counts—are advancing or reviving nuclear plans. In 1980, the main concern was overinvestment in heavily regulated markets. Today, the issue is bridging private capital with government priorities under market liberalization. Aligning nuclear’s technical strengths with new demand drivers—from round-the-clock data centers to decarbonized industrial heat—may define how effectively countries harness this technology in the decades ahead.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
