IEA Chief Calls for Risk Reduction in European Nuclear Investment
By Forrest Crellin
PARIS (Reuters) - Private investors, major banks and tech companies are showing interest in the European nuclear industry, but governments need to lower risks to encourage investment by guaranteeing contracts and cutting regulation, the head of the International Energy Agency (IEA) Fatih Birol told Reuters.
The private sector started to invest more in nuclear in 2024 to cover growing electricity demand for data centres and artificial intelligence, but long delays and cost overruns for recent projects have hurt European competitiveness.
Political uncertainties and poor performance by utilities have hindered growth in Europe as nuclear power production has fallen to less than 25% of total energy production and in 10 years' time it should be less than 15%, Birol said.
"It is important that the governments take some measures in terms of showing their long-term commitment and creating some derisking mechanisms for the investment, including at least partially guaranteeing contracts and streamlining the regulatory process," Birol said in an interview.
He declined to name specific investors that were interested in European nuclear power.
China has risen to be a top player in the nuclear industry due to a decades-long commitment by the government and the development of a strong supply chain, which Europe will need to emulate to meet its development goals, Birol said.
The growth in installed nuclear power capacity in China is set to eclipse the United States and the European Union by 2030 as more projects come online, an IEA report released on Thursday said.
The 63 nuclear reactors under construction globally represent more than 70 gigawatts (GW) of capacity, with half based in China, while annual investment has increased by nearly 50% in the three years since 2020, the report said.
The development of small modular reactors could lead to Europe, the United States and Japan retaking the nuclear technology lead in the next decade, and with strong investment some 80 GW could be installed by 2040, the report said.
However, to get to these levels the industry will need to cut costs to levels similar to large-scale hydropower and offshore wind projects. Investment would need to increase five-fold to $25 billion (24.32 billion euros) by the end of the decade, the report said.
(1 euro = $1.0278)
(Reporting by Forrest Crellin; Editing by Ros Russell)
