Nuclear projects seen slowing after record 2024 output, report says

Global nuclear power production reached a record 2,677 terawatt-hours in 2024, primarily driven by growth in China, following a two-year decline. However, the World Nuclear Industry Status Report indicates this level will be challenging to maintain due to insufficient investment, aging infrastructure, and widespread project disruptions. The sector faces significant competition from increasingly cheaper renewables and battery storage, which attracted 21 times more investment and added over 100 times more net capacity last year, suggesting a likely erosion of nuclear's 9% share of global power generation unless project delivery and economics improve markedly.

Analysis

Despite global nuclear power generation reaching a record 2,677 terawatt-hours in 2024, driven primarily by growth in China, the World Nuclear Industry Status Report presents a strongly pessimistic outlook for the sector's sustainability. Maintaining this output level through 2030 would necessitate an annual startup rate approximately two and a half times that of the last decade, a pace deemed unachievable due to insufficient investment, aging plant infrastructure, and persistent project disruptions. The sector faces intense competitive pressure from renewables and battery storage, which attracted 21 times more investment and added over 100 times more net capacity than nuclear last year. This economic disparity is amplified by rising nuclear plant costs juxtaposed with a roughly 40% decline in battery costs in 2024. Furthermore, new construction is heavily concentrated, with 44 of 45 global starts between 2020 and mid-2025 attributed to Chinese or Russian state firms, indicating no significant buildout in the West. The report also tempers enthusiasm for Small Modular Reactors (SMRs), labeling them as 'largely aspirational' in Western markets with no construction initiated. Consequently, nuclear's 9% share of global power generation is projected to erode unless there are marked improvements in project delivery and cost-effectiveness.

Key Decisions for Investors

• Investors should exercise caution regarding the long-term growth narrative for the nuclear power sector, as structural headwinds like rising costs and project delays are likely to cap expansion outside of state-led programs in China and Russia.
• The superior investment flow and cost-competitiveness of renewables, which received 21 times the investment of nuclear last year, suggest that portfolio allocations within the energy transition theme should favor renewables and energy storage over nuclear generation assets.
• Potential investments in Western Small Modular Reactor (SMR) technology should be viewed as highly speculative, as the report indicates a significant gap between policy interest and tangible project execution, with no construction starts to date.
• Given the concentration of new projects, investors seeking exposure to nuclear growth must focus on entities involved with Chinese or Russian state-backed developments, while carefully weighing the inherent geopolitical risks associated with such investments.