The 2024 edition of the IAEA's Climate Change and Nuclear Power report has been released, highlighting the need for a significant increase in investment to achieve goals for expanding nuclear power. The new report was launched last week on the margins of the Clean Energy Ministerial (CEM) in Brazil.
Nuclear power is enjoying increasing interest around the world as countries seek to strengthen energy security and decarbonize their economies. A rapid expansion of clean energy technologies is required to achieve net zero emissions by 2050 and nuclear power is expected to play a key role, with the IAEA projecting a capacity increase of 2.5 times the current level by mid-century in its high case scenario.
According to the report, global investment in nuclear energy must increase to 125 billion USD annually, up from the around 50 billion USD invested each year from 2017-2023, to meet the IAEA's high case projection for nuclear capacity in 2050. The more aspirational goal of tripling of capacity, which more than 20 countries pledged to work towards at COP28 last year, would require upwards of USD 150 billion in annual investment.
"Across its near century-long lifetime, a nuclear power plant is affordable and cost competitive. Financing the upfront costs can be a challenge however, especially in market driven economies and developing countries," said IAEA Director General Rafael Mariano Grossi. "The private sector will increasingly need to contribute to financing, but so too will other institutions. The IAEA is engaging multilateral development banks to highlight their potential role in making sure that developing countries have more and better financing options when it comes to investing in nuclear energy."
The new report also examines ways to unlock private sector finance, a topic that is gaining increasing attention worldwide. Last month, 14 major financial institutions including some of the world's largest banks came together during a New York Climate Week event to signal a willingness to help finance nuclear newbuild projects.
The report was presented at a side event jointly organized by the Agency and the CEM's Nuclear Innovation: Clean Energy Future (NICE) initiative on the margins of the 15th CEM in Brazil. The CEM is a high-level global forum that promotes policies and programmes to advance clean energy technology, and share lessons learned and best practices.
"The CEM is bringing together key stakeholders to discuss concrete steps to make clean energy-including nuclear power-affordable, attractive and accessible for all and accelerate clean energy transitions around the world," said Jean-Francois Garnier, Head of the CEM Secretariat. "Financing the necessary expansion of nuclear power to help integrate other sources of clean electricity is key to this success and I am happy to see the IAEA and CEM/NICE Future partnering to launch this report which highlights some innovative approaches to attract investments from both the public and private sectors."
The side event featured speakers from Brazil, the IAEA, the International Energy Agency (IEA) and the United States of America sharing their thoughts on how best to secure capital for nuclear power projects and looking ahead to COP29 in Baku, Azerbaijan, where financing the clean energy transition is set to be a major topic of discussion.
"IAEA energy system modelling and planning tools and publications are fundamental to decision-making processes for nuclear power plants," said Giovani Machado, Advisor to the President of Brazil's Energy Research Office (EPE). "IAEA publications on full cost analyses for electricity provision and financing of nuclear power plants were very useful to an EPE study on the Angra-3 nuclear power reactor for the National Energy Policy Council of Brazil."
Nuclear power's inclusion in sustainable financing frameworks, including the European Union (EU) taxonomy for sustainable activities, is having a tangible impact. In the EU, the first green bonds have been issued for nuclear power in Finland and France in 2023. Electricité de France (EDF) was one of the first recipients, with the award of €4 billion in green bonds and around €7 billion in green loans between 2022 and 2024.
To achieve climate change goals, global nuclear capacity needs to increase rapidly, increasing by a factor of 1.8 by 2035, said Sylvia Beyer, a Senior Energy Policy Analyst at the IEA. "Financing mechanisms that support scale, work force and supply chain development are going to be needed," she added.
The report makes the case for policy reform and international partnerships to help bridge the financing gap and accelerate nuclear power expansion into emerging markets and developing economies, including for small modular reactors. Robust regulatory frameworks, new delivery models, skilled labour development and stakeholder engagement can unlock new avenues for sustainable energy investments towards development goals.
"Accelerating the transition process is a multifaceted challenge that needs to be addressed within the broader framework of energy transition plans," said Celso Cunha, President of the Brazilian Association for the Development of Nuclear Activities.
