Investing in uranium: IEA says global nuclear capacity needs to double to reach net-zero

Mon 04 Jul 22, 11:30am (AEDT)
Uranium 1 Nuclear
Source: iStock

Key Points

  • IEA calls for governments to support the nuclear industry
  • The global energy crisis and surging fuel prices has seen a renewed interest in nuclear energy adoption
  • Uranium prices remain rangebound amid demand headwinds from Germany and France

Global nuclear power capacity needs to double by 2050 to reach net-zero emission targets, according to the International Energy Agency (IEA).

IEA Executive Director Fatih Birol said that nuclear has a unique opportunity to “stage a comeback” amid a global energy crisis, skyrocketing fossil fuel prices, energy security challenges and climate commitments. 

The IEA’s report viewed that “building sustainable and clean energy systems will be harder, riskier and more expensive without nuclear.”

However, its inclusion into mainstream energy will be dependent on “governments putting in place robust policies to ensure safe and sustainable operation of nuclear plants for years to come,” said Birol.

Substantial capital costs for lifetime extensions and new plants has been a key hurdle for nuclear power. "Government financing will remain necessary to mobilise new investment ... because there is rarely sufficient private sector finance for such capital-intensive and long-lived assets," Birol said.

It was warned that without further efforts, the global nuclear fleet operating in advanced economies could shrink by one-third by 2030.

Tides beginning to turn

The IEA notes a total of 19 countries with nuclear reactors under construction, demonstrating some degree of momentum behind the sector thanks to spikes in energy prices.

In the past week, South Korea reversed its planned phase out of 25 reactors and Japan's Prime Minister Jumio Kishida expressed his eagerness to restart mothballed plants.

In early July, the US government launched a strategic uranium reserve program, open to bids from US producers for an aggregate of 1m lbs.

Rangebound uranium

Uranium spot prices has largely been rangebound around the low US$50s since September, with a brief rally to decade highs of US$65 in April.

Despite IEA calls for higher nuclear energy production, Germany remains adamant on shutting down its nuclear power plants and corrosion at French plants has severely cut back demand from Europe's top nuclear energy producer.

2022-07-04 11 07 50-Window
Uranium spot price


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Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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