Rising demand for nuclear fuels: security, supply and the AI power boom

The nuclear industry is set for rapid expansion as the desire for firm 24/7 power grows as a result of the AI boom. The entire industry is gearing up to support this ramp-up but there are real concerns over whether fuel supply chains can keep up with demand. Not only will more fuel be needed than ever before but a far wider range of fuels is required at a time when energy security concerns are growing. What are the main supply considerations and how can they be overcome?  

Nuclear investment is beginning to take-off and the range of technologies on offer is widening, with the governments of more than 70 countries considering new commercial reactors. Under Wood Mackenzie’s base case scenario, global installed nuclear capacity will more than double by 2060 on the back of electrification, data centre demand and energy security concerns.  

Through 2035, reactor lifetime extensions and restarts will be used to meet short-term power demand from data centres. Thereafter, there will be growth in both conventional and next-generation nuclear, with standardisation, factory manufacturing and smoother licensing frameworks helping to drive fleet expansion.  

The big question is whether the supply chain will be ready. Private capital from AI hyperscalers is injecting innovation and scale into the market. New nuclear fuels are emerging, while geopolitical and energy security concerns are prompting governments to support increased nuclear fuel production and restrict exports.  

Wood Mackenzie’s ‘Global nuclear fuel strategic planning outlook 2026’ report examines these factors and the other trends transforming the supply chain, including mining, conversion, enrichment and fuel fabrication. 

How much investment will be needed? 

Efficient supply chain management would see the uptake of nuclear power more than double by 2060 under our base case. This would create a US$3.1 trillion investment opportunity, as the 35 countries with operational nuclear plants could be joined by another 44 states. 

Next-generation nuclear will play a growing role in new capacity additions. Improved safety strategies, smaller footprints, modular designs, reduced water consumption and smaller EPZs all increase the number of viable sites. Next-generation reactors can also serve as flexible loads when paired with batteries, including in brownfield and off-grid locations.  

Yet next generation maturation hinges on first-of-a-kind projects coming online to validate technology and de-risk commercial roll-out. The US, China and Europe will lead uptake, with next-generation capacity reaching 152 GW by 2060.

What impact will this have on the fuel supply chain? 

The near-term outlook appears deceptively comfortable. Mining, enrichment and fabrication have underused capacity until the mid-2030s, but much of this remains inaccessible due to tariffs or import bans. There will be further shortfalls across the supply chain as deployment speeds up.  

Geopolitical risks will increase as operating capacity is concentrated in a limited number of locations. Our latest report [link to ‘Global nuclear fuel strategic planning outlook 2026’ report sign-up at the bottom of the page] provides detailed analysis across the fuel supply chain. 

Just five countries provide 72% of all uranium: Canada, Kazakhstan, South Africa, Namibia and Russia. Concentration makes the market subject to capacity and cost disruptions. Kazakhstan’s exports to Western markets, which were traditionally shipped via Russia, now face logistical challenges following Russia’s invasion of Ukraine. The US and Canada are trying to fast track mining projects but demand will begin to outpace capacity from the 2030s onwards. 

Natural uranium demand closely follows virgin uranium profiles, although it is slightly lower due to conversion losses. With few operating plants in the world, the uranium conversion market is vulnerable to capacity shocks and price swings, so cumulative investment of US$322 billion will be required by 2060.  

Enrichment demand mirrors nuclear ambition but risks becoming the bottleneck that stalls it. The US is the largest consumer but remains dependent on imports, while Western Europe has outsourced enrichment to multinational operators such as Urenco. Even China and Russia face a capacity shortfall by 2040. Orano and Urenco can potentially supply Asian markets from Europe, but their combined expansion will be insufficient to meet global demand growth.  

As a result, uranium enrichment will require 50% of the total capital deployed through 2060. Policy support is emerging, with the US, UK and Europe investing in domestic enrichment capacity, but long project lead times mean the gap is unlikely to ease quickly. 

After a period of overcapacity, the enrichment market will tighten from the mid-2030s, with a 67% shortfall in capacity by 2060, making it the biggest bottleneck. Next-generation reactors, which are driven by HALEU requirements, will account for 29% of enrichment demand compared to 14% of virgin uranium demand. 

Which fuels will become more popular? 

A new wave of nuclear fuels, including HALEU, TRISO, Thorium, Molten salt, MOX and accident-tolerant fuels, is making reactors safer, cleaner and more efficient. They will require dedicated fabrication capacity as fuel supply chains are specific to reactor technologies.  

Alongside rising demand, the more diverse fuel types, dedicated fabrication capacity and smaller batch sizes will drive growth in fuel fabrication. For example, HALEU demand is negligible today but as Western governments actively reduce reliance on Russian enrichment capacity, HALEU production capacity will become a strategic priority. 

Business models are set to evolve across the fuel cycle, and the approach to risk assessment and pricing must adapt as well. 

Learn more about the future of nuclear

Fill in the form on this page to read an extract from our latest report, and read our recent piece on the nuclear outlook for 2026.