Explained: Why nuclear energy is back in fashion again

Interest in nuclear energy declined after the Fukushima disaster of 2011 but exponential demand for electricity in recent years, led by data centers and AI, is driving countries to invest in nuclear again

By Fazal Rahim Forbes India Staff

Published: Feb 7, 2025 06:18:41 PM IST

Updated: Feb 7, 2025 06:32:02 PM IST

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Atomic Power Station, in Rawatbhatta, Rajasthan. Image: Pallava Bagla/Corbis via Getty Images

In the early 70s, nuclear-generated electricity production was at about 200 terawatt-hours (TWh) and went on to become 2500 TWh by the turn of the century ( 1TWh=1000 Gigawatt). The number of operational reactors increased from 84 to 435 in the same period. It was seen as a relatively clean, reliable, and cheap source of energy. However, Japan’s Fukushima nuclear disaster of 2011 halted this progress.

The Fukushima disaster led to the death of 51 people and the displacement of about 1,64,000 residents in the area. Radioactive contamination in the region raised questions about the long-term effects of a nuclear accident. This resulted in a change in the perception of nuclear energy from a relatively safe energy source to a risky energy source.

In the aftermath of the Fukushima disaster, many nations decided to scale back their nuclear plants. Japan shut down all its 54 nuclear reactors. Germany shut down 8 of its reactors and decided to phase out the remaining reactors by 2022. Spain put a ban on building new reactors. Several other countries, such as France, Belgium, and Taiwan, agreed to reduce their dependency on nuclear energy.

Now, the global focus turned to renewable energy sources. Between 2010 and 2019, the total global investment in renewables amounted to $ 2.5 trillion, per the United Nations Environment Programme. In 2019, about $131 billion were invested in solar energy, and $138 billion were invested in wind energy. In contrast, the average annual investment in nuclear energy remained at $30 billion in the same period.

Similarly, electricity production by nuclear power remained relatively stagnant in this period, while solar and wind-produced electricity took off to new heights. According to the International Atomic Energy Agency, global nuclear energy production was at 2600 TWh in 2011, and by the end of the decade, it was at 2800 TWh. On the other hand, the combined solar and wind energy production increased from 400 TWh in 2010 to 2100 TWh in 2019.

Also read: Government action needed for world to meet renewables goal: IEA

The New Beginning for Nuclear Energy

The interest in nuclear energy has renewed again. Many countries have decided to make large investments in nuclear energy to increase their electricity output. France has decided to reverse its plans and build eight new nuclear power plants. South Korea, which previously decided to phase out its existing nuclear power plants, has now decided to build more new nuclear power plants.

India and the UK are investing in the development of Small Modular Reactors. In the latest budget of 2025, India has decided to invest Rs 20,000 crore to build five small modular reactors. The Indian government aims to have 100 GW of nuclear power capacity by 2047.

In the United States, major tech companies such as Amazon, Google, Meta, and Microsoft are also investing billions in nuclear energy. The tech companies are partnering up with nuclear plant developers. Amazon is investing close to a billion dollars in nuclear energy. Microsoft is investing about $1.5 billion in a partnership with Constellation Energy while Google and Meta are also working to produce 1 to 4 GW capacity through nuclear sources.

The biggest reason for the revival of nuclear energy is the exponential demand for electricity in recent years. Data centers and AI are the leading factors behind the increasing demand for electricity. According to the US Energy Department, the demand for electricity for data centers has tripled in the last ten years and is projected to double again by 2028.

According to research by Barclay, the electricity consumption by data centers in the US is 3.5 percent of its total electricity consumption. This figure is expected to rise to 9 percent by 2030. Besides the US, a large number of countries are investing in AI and data centers, which is expected to drive a similar demand for electricity.

Renewables, such as solar and wind, are still very much favoured by nations and corporations. However, there is an increasing fear that the pace of renewable energy might not catch up with the sudden increased demand for electricity.

Secondly, the ambitious Paris Agreement of 2015 to go net zero by 2050, signed by over 100 nations, is also a driving force behind the revival of nuclear energy. Many experts say that we need to deploy all the resources to produce clean energy, particularly nuclear to meet the net zero target by 2050.