Nuclear Power Poised to Break Records for Demand According to the IEA

What Happened?

The International Energy Association (IEA) issued a recent report which forecasts record demand for nuclear energy.

According to the IEA report:

‘Globally, nuclear energy is a leading source of clean and secure electricity generation – second only to hydropower among low-emissions sources. In 2025, nuclear is set to produce more electricity than ever before, a clear sign of the comeback that the IEA signaled in 2021. Another sign of momentum is that interest in nuclear energy today is at its highest levels since the oil crises of the 1970s, with support for expanding the use of nuclear power now in place in more than 40 countries. At the same time, innovation is changing the nuclear technology landscape through the development of small modular reactors (SMR), the first of which are expected to start commercial operations around 2030.’

Why it Matters

The IEA report forecasts growth in all energy sectors, not just nuclear. Driving the growing demand for energy is a number of factors globally, from rising consumer demand to a significant growth in new data centers to power artificial intelligence.

Across the board growth for the energy sector is explained early in the IEA report:

‘These positive developments for nuclear are well timed, as the world is moving towards the Age of Electricity, with global electricity demand for electricity set to grow six times as fast as overall energy demand in the coming decade, driven by the need to power everything from industrial machinery and air conditioning to electric vehicles and data centers. Alongside renewable technologies such as solar and wind, whose electricity output is expanding rapidly, nuclear can play an important role in meeting growing power demand securely and sustainably.’

In particular, data centers are turning to nuclear power to sustain their rapid growth. As the U.S. Energy Information Administration reported:

‘Last month, Constellation Energy announced a 20-year power purchase agreement (PPA) to provide electricity to Microsoft data centers in the mid-Atlantic region from the Unit 1 reactor at the Three Mile Island nuclear power plant in Pennsylvania. Data center electricity demand doesn’t fluctuate during the day in the same way as demand from residences or many other businesses. Instead, data center operators typically require a consistent and steady supply of electricity at all hours. Likewise, nuclear power plants operate continuously, and they have difficulty ramping up and down to match variable demand.’

The consistent output of energy by nuclear plants is a good match for the steady demand and consumption of new data centers.

How it Affects You

Tech companies are investing heavily in the energy sector to provide power to data centers, which in turns provides the processing capacity needed to utilize artificial intelligence applications.

The infrastructure being built to power data centers could usher in a new era of artificial intelligence applications that would impact nearly every sector of the economy.