IEA’s Fatih Birol on the state of nuclear energy advancement around the world

Speaker

Fatih Birol
Executive Director, International Energy Agency

Moderator

Frederick Kempe
President and CEO, Atlantic Council

Uncorrected transcript: Check against delivery

FREDERICK KEMPE: I’m Fred Kempe. I’m president and CEO of the Atlantic Council. And I’m talking to you from our new global headquarters in Washington, DC.

Nuclear energy has been providing power in the United States and many other nations around the world for decades. As more countries look to nuclear to address their energy security concerns and meet growing power demands, the industry faces an inflection point. We have companies coming to us that never thought much about energy before, with needs for data centers, with needs driven by artificial intelligence, that are now talking about energy and talking about nuclear energy in a way they just didn’t even a couple of years ago.

Nuclear also has received rising levels of public support and has experienced remarkable innovation. But it’s going to take coordinated leadership and investment to turn this current momentum into lasting progress. In the United States last year bipartisan legislation, such as the ADVANCE Act, was key to strengthening the domestic nuclear energy industry. The industry also received a first-of-its-kind public support from major technology companies and financial institutions. And on a global level, the United States continued to strengthen its civil-nuclear relationships through close bilateral and multilateral cooperation. These actions reflect the commitment of the United States to establish US and global energy security. And the incoming Trump administration has made very clear that this is going to be a priority for them.

With all of this going on, I can’t think of a better person to shed some light on this set of issues than Dr. Fatih Birol, executive director of the International Energy Agency. So Fatih, it’s just wonderful to have you with us. We’re proud that Fatih is also a member of the Atlantic Council’s International Advisory Board. And I’ve been proud to call him a friend for many years. Recently we were catching up at the World Economic Forum in Davos and he mentioned the International Energy Agency’s latest report on nuclear energy. And I’m so delighted that he is here to address issues that were raised in that report. Just last week, Fatih was presented with the prestigious Order of Merit of the Italian Republic, the country’s highest civilian honor, for his outstanding contributions to addressing global energy challenges.

In his remarks at the ceremony, Italian Ambassador Sabbatucci noted the IEA’s extraordinary contribution to Italy’s G7 presidency last year. The Atlantic Council was fortunate to host Dr. Birol at a sidelines event at that G7 energy ministerial. And we commend him for his leadership in helping to secure a brighter global future on the energy stage. At our Global Energy—annual Global Energy Forum over the years Fatih has been often a keynote. And he always plays to packed audiences for his insights in the global energy picture. For those of you tuning in, this year we’re going to be doing the Atlantic Council Global Energy Forum on June 17 and 18 in Washington, DC. Moving it here because of the high level of interest in how US energy policy will evolve and who will be leading energy questions in the United States.

Fatih has worked at the heart of global dialog on energy since I’ve known him and I look forward to hearing his insights today. I also want to thank our Global Energy Center’s Nuclear Energy Policy Initiative for hosting this conversation. Jennifer Gordon has just been a magnificent leader—a leader of that initiative and really has positioned ourselves, I think, right at the forefront of this thinking on the future of nuclear energy. For everyone watching, submit your questions by going to AskAC.org—AskAC.org. And I’ll get to them a little bit later in the discussion. So, Fatih, let’s dive right in.

You may want to make a couple opening comments or so, but I always like starting off by hearing how you’re looking at your overall set of priorities at this fascinating moment for global energy, in 2025, and how nuclear has fit into that, and why the IEA has decided to put out a report on nuclear power now. So over to you.

FATIH BIROL: So thank you very much, Fred. Greetings from IEA headquarters in Paris to your new headquarters in Washington, DC. I am very much looking forward to visit your new headquarters as a friend and as a board member of the Atlantic Council. Looking forward to having a cup of tea or cup of coffee in your wonderful office. Thank you very much, Fred. It was very nice to see you also in Davos. As it happens almost all the time in the last several years, over a decade, in Davos you are one of the key figures, of course, in Davos, in the World Economic Forum. Especially given the developments in the United States and in the world, people want to hear Atlantic Council’s views, your views closely.

So, coming back to IEA, I mean, our main job is, if I can summarize, Fred, to provide everybody in the world with affordable, secure, and clean energy. So therefore, what we do is we look at the data. We are a data organization. And I tell my colleagues, data always wins. We are a data organization. And we look at all fuels, all technologies, and provide analysis, policy recommendations to governments, industry, citizens, academia, and others.

So why we made a report on nuclear power? I commissioned this report last June—June 2024—and in a short period of time, about seven, eight months, my colleagues put together this, in my view, the major report at a very important time. There are two reasons, in fact, why we did this report. The first one is when we look at the electricity demand globally it is growing very, very fast. In addition to the usual drivers of electricity demand growth such as industrial sector, household sector, there are new ones coming in the picture.

For example, air conditioning is today number-one driver of global electricity demand. If I can put it in context, Fred, in United States or in Japan and Korea, 90 percent of households they have an air conditioner but in Nigeria it is 5 percent, India 18 percent, Indonesia 20 percent. With the increase in income levels people buy air conditioners, which in turn increase the global electricity demand growth.

Another driver—a new driver is the data centers for artificial intelligence. They are—they do require permanent and clean electricity sources 24/7. So when we look at the options here, how we are going to meet that electricity demand growth with which technologies, nuclear comes as one of the key options.

This is the second reason. When we look at the nuclear power, you have mentioned in your opening remarks there was always interest in nuclear power but after the Fukushima accident in Japan 2011 the appetite fell down.

But recently, I mean, almost three years ago—I dare to say three years ago we may see nuclear making a comeback and today I can confirm that nuclear is making a comeback, a strong comeback, and when we look at the numbers we see this happening, Fred.

I’ll just give you a couple of—maybe three things. One, this year, 2025, we expect global nuclear electricity generation will be the highest in history. The biggest nuclear show—nuclear generation show a lot of zigzags but 2025 will be the highest in history.

Second, as we speak now seventy gigawatts of nuclear power plants in more than fifteen countries are under construction. We have never seen such a big amount of the construction of nuclear power plants in the last three decades.

And, third, maybe the small modular reactors are making inroads in many countries.

Putting these things together, we thought it is now time to put a framework for the governments, for the industry, and the others what is the state of play in nuclear power, what are the challenges in front of us and who is doing what here, and, therefore, we made this report and I am very happy to see that there is a lot of interest.

Just a few hours ago—I mean, you mentioned Italy. I am thankful to Prime Minister Meloni for this recognition for our work. But I am going to Italy, a country that has rejected nuclear power twice or three times by referendum. Now Italy is looking at the nuclear power being a part of energy mix.

Or Sweden stopped and coming back. Japan restarting. France, again, pushing strongly. Korea, many of the countries. And there are several countries for the first time, such as Poland, such as Turkey and others, are coming in the picture.

So we see a strong momentum and we will see if this—how much of this momentum will be translated into real gigawatts in the world. So I stop here maybe.

FREDERICK KEMPE: Fatih, thank you so much for that.

I’m going to go back and forth. When I see a question come up on my screen from the audience that I think fits into the moment that you’ve just talked about I’ll pick from that as well, and let me remind people again AskAC.org is where you can send your questions.

I have a question from Theo Randazzo. And it’s—and you’ve sort of answered it, so let me read the question but let me go further on it. So, are other countries around the globe taking a closer look at incorporating nuclear power in their energy production as in the US? And you cited Sweden and you cited Japan, France, Korea, Poland, Turkey. What’s prompting which countries to turn to nuclear? Is there something that differentiates one that goes in, one that doesn’t go that way? And particularly when it comes to AI and data centers, I think it’s going to be a particular country that’s going to have the source of energy and the capability to set up a data center. It’s not going to be for every country in the world, I would imagine.

FATIH BIROL: So, in fact before going to answer this question, let me mention one other country. I mentioned some new countries are coming in . . . There is one country which is playing a key role in recently nuclear power, which is China. When you look at it, Fred, in the last five years, more than 80 percent of the new nuclear capacity came from China only. So China is playing an important role. And think about this—how the nuclear industry has started to operate. So almost fifty years ago we have seen the new nuclear power plants built as a response to the oil crisis in the 1970s in US, Europe, and others. But now US and Europe—in fact US by far—was the highest nuclear power capacity in the world. But China, with the current policies, before the end of this decade will overtake United States and will be the number one nuclear power in the world.

FREDERICK KEMPE: True.

FATIH BIROL: So this is something that, put aside, I think is important to note.

Now, second, what drives the countries to push the nuclear industry? First of all, electricity security. With a nuclear power plant, you push the button—24/7, you have your electricity system run. And second, the demand is growing so much that in addition to others such as solar, such as wind, such as hydropower, such as geothermal energy, such as natural gas, you need additional power, and nuclear counts here. And third, nuclear power generates electricity but doesn’t emit emissions. So this is also good from an emission-reduction point of view.

So there are different reasons, but in the age of strong electricity demand quote, I see that the countries are moving forward to put nuclear in part of their power generation mix. And again, today—again, an indication of the great momentum of nuclear power, we have counted more than forty countries have concrete plans to build or expand their nuclear capacity. We have never seen this before.

So to repeat, more than forty countries have plans—concrete plans and projects in place to build or expand their nuclear capacity, and this is another, in my view, indication of the comeback of nuclear in a strong way.

FREDERICK KEMPE: So, the—of the new—these forty countries, the forty that have plans—that’s really extraordinary, the boom of planning of this that you’re talking about. There’s all sorts of—as you talked about small modular reactors, there’s different kinds of nuclear fuels, different kinds of business models, new types of reactors—what’s driving the new—what kind of reactors is driving this new exploration? Is it a mixture of both the conventional and the small modular reactors? Where are the—you know, where are the trends going?

FATIH BIROL: Today it is mostly the traditional, large-scale nuclear power plants, but there is a growing interest in small modular reactors. And that is for obvious reasons—the growing interest for small modular reactors. First, they are easier to finance. They are much more flexible, less complex projects to implement. And it takes less time, faster to build those power plants. And in terms of waste management, it is easier to handle the small modular reactor. So, from that point of view, SMR—small modular reactors—get a lot of interest.

Plus, you mentioned the data centers, artificial intelligence. They are making a contracts arrangement with the SMR companies in order to secure the electricity supplies. And the since these technology companies, datacenters, artificial intelligence companies, have good credit ratings it is easier to finance these SMRs compared to large-scale plans to fund financing, because they have good credit ratings.

And if I have to mention one more thing with the large scale reactors, Fred, which is one of the reasons why, for example, China is moving fast, or faster, than the US or European companies. In US and in Europe, when we look at the recent projects, it is rare that a project finishes on time and on budget. We have—we have looked all of them—my colleagues, we have a big team here. I have excellent experts. They look at all the projects. And recently on average in US and in Europe a nuclear project is at eight years of a delay—eight years of a delay. And the cost is two times, two-and-a-half times than the cost originally planned. So two-and-a-half times higher.

So it is not on budget and it is much more expensive it was thought. It is, of course, a major, major challenge for the—for the governments, for the investors, and others. There are some good examples. For example, Korea did a good job in several cases. And China is doing a better job as well. So if we were to see nuclear making a strong comeback, there is a big job for the nuclear industry in the advanced economies to deliver on time and on budget as well.

FREDERICK KEMPE: That’s really—that’s really interesting. So let’s stick with the AI boom a little bit longer. One question that’s come in says, as the AI boom expands even further, will we witness a reliance on nuclear source for energy or is wind/solar a more viable option? Let me add to that. What I’ve been hearing in the United States is that the SMRs won’t come online quickly enough to handle this situation for datacenters, so that actually gas—natural gas may be the bridge fuel—may be the fuel that gets us there faster. It was interesting that you were talking about air conditioning. I didn’t think about the impact of air conditioning on all of this, but that’s fascinating as well. But let’s stick with AI right now. How much of this boom in datacenters will be electrified by nuclear? And how much is going to come from other sources?

FATIH BIROL: For this study, Fred, nuclear study, we carried out—by the way, our study is freely—it is free downloadable in our website. For this study, we talk with almost all key AI companies, with SMR companies. We check critically their projects, their assumptions. We think the SMRs commercially can hit the markets around 2030s. So there’s a lot of time between now and then, the first commercial large-scale SMR hitting the market. And I believe between now and then they will use natural gas to feed the—to meet the demand growth, and also partly renewables.

And I want to mention one renewable source, it is one of the recent reports we make, is geothermal energy. We talk about solar and wind a lot, but geothermal energy, which has been with us decades and decades, Fred. But as a result of applying the hydraulic fracturing, the horizontal drilling which we used for the oil and gas—shale oil and gas in the United States—we can go deeper and bring more geothermal energy to the market. And this can be a gamechanger as well. And this can is—is also a potential to meet the AI demand. So to sum up, we will see natural gas in the—maybe in the next few years to come, to start. But I believe SMRs, geothermal, and others will contribute as well.

FREDERICK KEMPE: So as this goes on—we have a question here from Maxim Dray: Are uranium stocks likely to benefit from the Trump presidency? How are tariffs likely to impact the sector?

Let me add to that my own question of how worried you are, if you’re worried at all, about the concentration of uranium supply and enrichment services, and is there a way to overcome that challenge?

FATIH BIROL: Yeah. I think the—when we look around the world, the efforts and a lot of interest in building new nuclear power plants in Americas, in Europe, in Asia. Africa, Middle East we see that there will be a boost for the uranium and nuclear industry in general. However, while I said the nuclear is very good for electricity security, generating electricity at home in any country, when I look at the enrichment—global enrichment capacity, I see a serious concentration. Our analysis show that about 40 percent—in fact, more than 40 percent of global uranium enrichment capacity is in one country, which is Russia. So therefore, there is a need to diversify the uranium enrichment capacity.

If the countries are serious—it can be US, it can be Canada, it can be a Europe, Japan, Korea, Middle East countries, other Asian countries. They have to pay attention not only building the new nuclear power plants, large-scale SMR, but they have to also look at the enrichment capacity and to build the enrichment capacity. I know that there are some steps taken in United States and in Europe. There are some projects underway to elevate this concentration away from one single country. But there is a need to definitely diversify it.

Fred for me, in the energy world it is oil, gas, renewables, nuclear. Magic word is diversification. We have—in Europe we have experienced the bitter consequence of overreliance on one single country of energy, which was Russia. And we pay a lot of costs of it by cutting it off, the Russian energy with high energy costs. So therefore, in fact, it’s an area that IEA has since decades warned the governments here. But we should learn from that. Diversification of the energy. Diversification of import sources. Diversification of the trade, which are always good for energy security. Not put all the eggs in the same basket.

FREDERICK KEMPE: So this is still—it’s still a challenge we have to overcome, without a great plan yet for how to overcome it?

FATIH BIROL: Exactly. This is serious challenge. Forty percent of the global uranium enrichment capacity comes from one single country, which is Russia today.

FREDERICK KEMPE: And since we’re talking about challenges, let’s go to nuclear waste. Gerardo Merina asks: Have there been advances in nuclear waste disposal? And Kanako Akayama says: How are the international regulations evolving to address the increasing volume of nuclear waste, considering the growth of nuclear capacity?

FATIH BIROL: So this is one of the challenges of the nuclear industry today. What do we do with the nuclear waste? So there is definitely some progress in long-term waste disposal. Several countries in the world, in advanced economies and others, have approved plans to build them. And technologies are underway to minimize, if not nullify, the risk of nuclear waste. It is still an issue, but I believe it will not be a barrier for the development of nuclear power plants. And this will be tackled by the right policies and the innovation of technology.

There is a lot of progress in the waste disposal around the world. And still most of the waste is stored onsite, and this is a challenge, but this can be easily overcome with the innovation we are seeing in many, many countries. So this is not something that will be a showstopper for a nuclear comeback.

FREDERICK KEMPE: That’s encouraging to hear.

So members of the new Trump administration have emphasized achieving energy independence. Energy security is going to be a top priority of this administration. How do you think this new administration will shape the outlook for nuclear power in the United States? And how will the IEA engage with the administration on this and other questions?

FATIH BIROL: So I think the—when I look at the new administration’s energy priorities, I see that nuclear is one of the key priorities. This is very much in line with our hope and expectations expressed in our report, which we have started last June and came out only a few months ago. And when I look at the few statements from different leaders in the new administration, I see the same narrative.

And I have followed the hearing of the Secretary Chris Wright in the—in the Senate. He made several times a strong emphasis on nuclear power. And I think this is very important the United States not only talks about nuclear power, but builds nuclear power plants both in terms of the large-scale and also, hopefully, in terms of the small modular reactors by pushing the innovation button there and bringing the cost of SMRs down.

So it will be one of the areas that we are going to work with the new administration. And I see many other areas, from geothermal to nuclear power, from the energy efficiency to carbon capture and storage, because IEA is an organization which looks all fuels, all technologies, and energy security is very important for us.

Another issue that I wanted to mention to you, Fred, is that when we say energy security, we see two different elements there. So energy security, traditional energy security risks—that is, oil or natural gas—they are there, they are with us, and we have to be very careful with the oil security and gas security. But there are also looming new emerging energy security risks, such as critical minerals, such as supply chains, because we see that both critical minerals in terms of mining but also processing and some of the supply chains are also concentrated.

So, therefore, from IEA point of view, energy security is a full spectrum of the traditional energy security risks plus the emerging energy security risks, such as the critical minerals, supply chains. And considering this together, last July the IEA and the U.K. government announced a major summit, perhaps the most important energy meeting this year, taking place in London in April, Future of Energy Security Summit, which is going to be hosted by Sir Keir Starmer. And we are expecting several global leaders around the world come together to discuss the energy security challenges of today and tomorrow, and how we can come together to address this global challenge for everybody.

FREDERICK KEMPE: That’s absolutely fascinating. That sounds like an incredibly important, incredibly important conference. For a long period of time, energy security seemed to fall off the radar of high-level conversation, and that changed in 2022 with the—with the Russian invasion of Ukraine. And I think what you’re saying is it’s going to become even more an area of focus.

FATIH BIROL: Exactly.

FREDERICK KEMPE: Talk to me a little bit about—we have aligned countries. This competitive picture that you’re talking about, you’re looking at the enrichment competition in the 40 percent that’s with Russia. So there is going to be a competitive area. The Chinese deployment of nuclear capability and nuclear plants for middle and low income countries. My guess is they would be looking at these as business opportunities and also, you know, diplomatic opportunities.

How should the United States address this? How should the United States and Europe address this? Could one work—this is one of the questions that’s come in—could one work with aligned countries like South Korea and Japan to compete better with Chinese deployment of nuclear in middle- and low-income countries?

FATIH BIROL: So today, when you look at the orders, the nuclear power plant construction orders, we see that the—it is mainly Chinese construction that goes there or Russian construction. The reason is very simple, because Chinese, for example, they finish their projects on time and they have been doing this while the advanced economies—US or Europe or Japan—didn’t build a lot of or, if any, significant amount of nuclear power plants.

It is called learning by doing. If you do something you learn better, and if you don’t do it you forget how to do it, whatever it is in life. So, therefore, many countries in the developing nations and elsewhere choose Chinese or the Russian contractors because there was not much activity in Europe or US or elsewhere.

So what do we do? What needs to be doing? If we see a big momentum in the United States, in Europe, in Japan and elsewhere in other countries, we will see that the reactivation of the nuclear industry in these countries will give a boost to the chances to be chosen by the countries who want to build their nuclear industry. And it may be a good idea, as the colleague who asked this question mentioned, to coordinate the development of the supply chains between, for example, US and Europe; Canada, US, and Europe, Japan, Korea together. It could also have a—in the context of large scale but also SMRs and the development of the supply chains. It could be a good way of increasing the chances to be asked for to build nuclear power plants in developing countries.

And, of course, one thing that we should avoid is the stop and go policies because nuclear power is a very long lead industry. In many countries we get excited, we go, but after a while there’s a change in the government or change in the mood. Then you stop. Then you go again.

So you should give a predictable perspective here which would open the chances for the countries or the companies in the countries you have mentioned. So avoid stop and go policies is the other issue.

FREDERICK KEMPE: Thank you for that answer.

Let’s talk about one country that’s, as you know, a specific interest of my own and that’s Germany, where it was—you know, if you look at some of its companies and some of its history, it was cutting edge in a past life on nuclear capabilities and now, of course, it’s not developing plants and has decided against them.

Do you see any chance of a change of approach in Germany or is this policy going to persist?

FATIH BIROL: I think a German economy is one of the engines of the European economy, together with the French, Italian, and the others. But I see that the—if European economy today has a major competitiveness challenge, a major energy security challenge, among other reasons it is due to the fact that the European countries turned their back to nuclear power.

Fred, in the 1990s, end of—or, beginning of 2000, which was yesterday, 35 [percent]—more than one-third of the electricity in Europe came from nuclear power, but now it went down less than 25 percent. It is going down more and more, to 15 percent. From 35 [percent] to 15 [percent].

And in Germany—I respect the German government’s, German people’s decision to phase out nuclear power plant. In Germany, nuclear power plants were operating like a Swiss clock, just printing money, generating electricity without emissions, without—no problem. So that, in my view—my personal view as an expert, not as a politician, as an expert—this was a historic mistake that Germany did in terms of phasing out of existing nuclear power plants.

Now, we know that there is the elections in Germany—I’m sure you follow very closely—on 23rd of February. We don’t know what will be the result of those elections, but I am not surprised that nuclear power is one of the hottest topics in the election. And I wouldn’t be surprised, after the election, there may be a second look at the nuclear policies of Germany.

We have seen this in other countries. For example, in Sweden there is a strong comeback of nuclear power in Sweden with the new government. And also in Switzerland there is also a growing interest. In Poland, the first nuclear power plant going to be built, and in some other countries. But I imagine, especially Germany—a) it’s a country that you are interested in; and b) it is the engine of the European economy. So therefore I expect nuclear to be one of the hot topics even after the election.

FREDERICK KEMPE: Fascinating. Really, very interesting.

So obviously, you know, one has to finance all of this. It’s not cheap. With new customers for nuclear energy, where do you see the financing coming from? It seems to me that there’s going to be a need for greater investment in these technologies. What’s the role of public and private capital in financing the new nuclear projects?

FATIH BIROL: Yes. So in the matter of advanced economies where we have the markets—the market instruments are the ones who decide—which decide on any single investment, we have to be creative here because in the nuclear industry, where you make the nuclear—build the nuclear power plant, twenty years you have to wait for your return to come back. So this is not a very interesting option for the investors at first sight.

However, I believe, first of all, public funding to critical. And this means we need public funding, but also need to get private capital because public funding, government money, cannot solve all the problem.

Small model reactors could change the picture because they are working with the tech companies, which have, as I mentioned, high credit ratings which makes smaller projects investible. And we need governments to be creative and come up with some divesting investments, some of the revenues to be guaranteed of the nuclear projects.

So I see governments play a pivotal role here, both in terms of providing part of the funding maybe, but more importantly, coming up with instruments to divest investments and guarantee some of the revenues to get the private capital there.

At the end of the day, public, private—they both need to play an important role. And for governments, they should not forget that nuclear power—services should be numerated as an energy source which is secure, clean, and also makes the countries—the competitiveness even stronger vis-à-vis other economies in the world.

FREDERICK KEMPE: That’s just terrific. So thank you so much, Dr. Birol, Fatih, for joining us for this edition of Atlantic Council Front Page. I think I speak from our audiences watching from all around the world that it’s always an honor, a pleasure to listen to you, as one of the real great experts of our time on energy issues, writ large. And it’s a pleasure for me always to engage in conversations with you on this. I expect that supporting the growth of US energy production and nuclear energy production will continue to be a priority of this administration.

So thanks again, on behalf of everyone, Fatih, for sharing your insights into how government and industry leaders can play a crucial role in supporting this. I think your final answer on the financing of this points to the need for public-private in this field, probably even more than most others. So thanks again, Fatih.

FATIH BIROL: Thank you very, Fred. All the best. Thank you.

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