The US is on the brink of an unprecedented rise in electricity demand, with projections showing a 35 to 50 percent increase by 2040, according to data from S&P Global Commodity Insights.
This surge, largely driven by artificial intelligence (AI) data centers, manufacturing expansion and mass electrification, underscores an urgent need for a diversified energy strategy.
While renewable energy and natural gas will both play vital roles, nuclear power is emerging as a key component — though its growth may be constrained by uranium supply challenges.
Nuclear energy’s key role in electricity supply
As demand for electricity skyrockets, nuclear power is positioned as a crucial solution due to its reliability and ability to provide continuous, carbon-free energy. Industry leaders stress that without significant investment in nuclear infrastructure and uranium supply chains, the US could struggle to sustainably meet its energy needs.
John Kotek, senior vice president of policy and public affairs at the Nuclear Energy Institute, one of the groups that commissioned the S&P study, emphasized nuclear energy’s potential, stating, “The S&P Demand Growth Report highlights the tremendous growth in electricity demand and the critical gaps that must be filled to meet future needs.’
He added that nuclear power is well positioned to serve power needs from the manufacturing sector, as well as AI and data center demand. Kotek also pointed to growing partnerships between nuclear energy producers and major tech firms like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META) and Google (NASDAQ:GOOGL), which require reliable around-the-clock power for their AI data centers.
However, uranium supply constraints could present long-term challenges. The nuclear fuel cycle depends heavily on uranium market stability, and geopolitical factors could further complicate sourcing. According to the World Nuclear Association, global uranium production has struggled to keep pace with growing demand.
In 2022, uranium mines supplied only 74 percent of power utilities’ annual needs, with the remainder coming from secondary sources such as stockpiled reserves and recycled materials. The depletion of these reserves over time, combined with increasing nuclear energy adoption worldwide, could stress uranium supply chains.
At the end of 2022, uranium stockpiles stood at approximately:
- 36,000 metric tons in Europe
- 40,000 metric tons in the US
- 132,000 metric tons in China
- 49,000 metric tons in the rest of Asia
China and Russia have taken steps to secure long-term uranium supply, with China investing in mines across Niger, Namibia, Kazakhstan, Uzbekistan and Canada. Russia’s ARMZ Uranium Holding acquired Uranium One in 2013, ensuring a steady uranium flow for its domestic reactors. The US and Europe, by contrast, rely more heavily on market-driven supply chains, making them more vulnerable to price fluctuations and geopolitical instability.
“Facing an unprecedented increase in electricity demand, America is provided with a golden opportunity to modernize our power sector while securing domestic leadership in cutting-edge future technologies,” said Marty Durbin, president of the US Chamber of Commerce’s Global Energy Institute.
“To meet this challenge, we need policies that support both existing nuclear reactors and the development of next-generation nuclear technology,” he further emphasized.
US needs all types of energy to meet electricity demand
Against that backdrop, many policymakers and industry leaders argue that nuclear energy must be prioritized in future energy planning. The S&P report suggests that an additional 10 to 25 gigawatts of nuclear and geothermal capacity will be needed by 2040 to maintain grid reliability, along with increases in natural gas and renewable capacity.
‘We must bring equal urgency to accelerate the development and deployment of new nuclear generation capacity and fossil generation with carbon capture,” said Jason Grumet, CEO of the American Clean Power Association.
This push aligns with policy efforts to streamline nuclear development.
Recent US government initiatives aim to fast track small modular reactor deployment, expand domestic uranium enrichment capabilities and reduce reliance on foreign uranium supplies. However, bringing new nuclear plants online can take a decade or longer, highlighting the need for quick action to ensure supply chain stability.
S&P notes that the US already has the technology to bridge the gap between electricity supply and demand — it sees a need for government, industry and consumers to work together on solutions.
‘It is time to join together behind a true all-of-the-above energy strategy that lowers prices, creates jobs, and supports our national security,’ Grumet concluded.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
