Electricity needs are increasing globally and triggering investors’ and industries’ interest in nuclear energy. The issue was in focus last week as top uranium and nuclear energy executives, experts, and investors met at the World Nuclear Association (WNA) symposium in London, as quoted on CNBC.

The United States is the world's top producer of nuclear power, making up about 30% of worldwide generation of nuclear electricity, as quoted on World Nuclear Association. However, the nuclear sector faces significant costs and uncertainty due to regulatory requirements. Most U.S. nuclear capacity comes from reactors built between 1967 and 1990. Until 2013, there were no new construction starts since 1977, per WNA.

After a long pause in new starts due to cheaper gas and safety concerns following 1979, construction resumed with Watts Bar 2 in 2016 and Vogtle 3 & 4 in 2023–24, according to the World Nuclear Association. But now seems to be the time to charge up nuclear projects.The initial momentum has already been witnessed.

Lest we forget, nuclear reactors generated a total of 2667 TWh of electricity in 2024, up 66 TWh from 2601 TWh in 2023. This marked the highest ever generation from nuclear in one year, topping the previous record of 2660 TWh in 2006, per World Nuclear Association.

Why Nuclear Power Is Important

Nuclear energy offers round-the-clock power. IEA executive director Fatih Birol said,“more than 70 gigawatts of new nuclear capacity are under construction globally, one of the highest levels in the last 30 years, and more than 40 countries around the world have plans to expand nuclear’s role in their energy systems.” 

It is the world’s second-largest source of low-emissions electricity after hydropower. Nuclear power now produces just under 10% of the global electricity supply, per IEA.

Tech Giants Turn to Nuclear, But Other Sectors Are Also in the Queue

Big technology companies are investing in nuclear energy to power data centers and support their AI growth, as quoted on CNBC. The World Nuclear Association Director General Sama Bilbao y León told CNBC that demand for electricity will rise across several industries. Beyond AI, nuclear energy will be deployed in the metallurgical industry’s electrification push, as well as in chemical, maritime and shipping sectors.

Political and Financial Challenges

Still, investors worry about high costs, delays and technical challenges, the abovementioned CNBC article indicated. The article went on to explain that financing nuclear projects is another challenge. 

According to IEA, lenders rely on stable cash flow. So, in markets with volatile power prices, tools like power purchase agreements, and contracts for difference and regulated asset base models are crucial. The IEA article also indicated that green bond issuances for nuclear energy have raised over $5 billion, mainly for lifetime extensions and refinancing of projects entering their operating cycle.

Another IEA article indicated that Small Modular Reactors (SMRs) are faster to build and can lead to significant cost reductions. These are drawing increasing interest from the private sector. With proper backing, SMR installations could touch the 80 GW mark by 2040, making up about 10% of overall nuclear capacity globally, per IEA. 

Government Initiatives

Earlier this year, U.S. President Donald Trump signed a number of executive orders to speed up the development of nuclear reactors and quadruple nuclear generating capacity by 2025, as quoted in another CNBC article.

ETFs in Focus

Investors should note that the below-mentioned nuclear-focused exchange-traded funds (ETFs) have gained massively in the past year.

VanEck Uranium and Nuclear ETF (NLR Quick QuoteNLR - Free Report) – Up 68.5% over the past year

Range Nuclear Renaissance Index ETF (NUKZ Quick QuoteNUKZ - Free Report) – Up 88% over the past year

Global X Uranium ETF (URA Quick QuoteURA - Free Report) – Up 72.7% over the past year

Themes Uranium & Nuclear ETF (URAN Quick QuoteURAN - Free Report) – Up 41.5% over the past year