IEA report shows nuclear sector booming despite costs

According to the report, The Path to a New Era for Nuclear Energy, the sector is set for continued growth, despite cost overruns and project delays in many countries. Construction of new projects is at one of its highest levels in 30 years, with over 70 gigawatts of capacity in progress across more than 40 countries.

“It’s clear today that the strong comeback for nuclear energy that the IEA predicted several years ago is well underway, with nuclear set to generate a record level of electricity in 2025,” said IEA Executive Director Fatih Birol.

“SMRs in particular offer exciting growth potential. However, governments and industry must still overcome some significant hurdles on the path to a new era for nuclear energy, starting with delivering new projects on time and on budget – but also in terms of financing and supply chains.”

Commenting on the IEA report, GE Vernova’s Nomi Ahmad also flagged the potential for SMRs to buck the trend of spiralling nuclear costs. It was reported by the Financial Times earlier this week that the final cost of the UK’s Sizewell C nuclear plant is likely to reach £40bn – double the estimate from 2020 – although this figure was described as ‘speculative’ by a spokesperson for the Department for Energy Security and Net Zero (Desnz). According to Ahmad, CEO of GE Vernova's Financial Services business, SMRs can help bring nuclear costs back in line with other energy infrastructure, if the right framework is provided.   

“SMRs have the potential to break the stigma of run-away costs and schedules and make nuclear energy as easily deployable as a combined cycle project, but first, we need clear government commitment to a nuclear roadmap,” said Ahmad.

“SMRs create the opportunity for a repeatable cycle that creates business cases for investors and supply chain alike, who are champing at the bit to drive economic growth and deliver energy security.”

Alongside costs overruns and delays, the IEA report highlighted how congested nuclear fuel supply chains might hold the sector back, with production and enrichment of uranium highly concentrated in just a handful of countries.

“Today, more than 99 per cent of the enrichment capacity takes place in four supplier countries, with Russia accounting for 40 per cent of global capacity, the single largest share,” said Birol. 

“Highly concentrated markets for nuclear technologies, as well as for uranium production and enrichment, represent a risk factor for the future and underscore the need for greater diversity in supply chains.”