The closure of the Strait of Hormuz has delivered a sharp energy shock to Asia, exposing the region’s deep vulnerability to external supply disruptions. Yet even before the conflict, a growing urgency was evident among policymakers to accelerate alternative, reliable low-carbon energy sources, with nuclear power increasingly central to recalibrating Asia’s energy strategies.
Several Southeast Asian nations, including the Philippines, Indonesia, and Vietnam, are stepping up the pace of nuclear preparatory development as part of their energy diversification strategy, with plans targeted between 2030 and 2037. Vietnam and Russia recently concluded an intergovernmental agreement to develop the Ninh Thuan 1 Nuclear Power Plant, bringing back a project that had been shelved since 2016. Singapore is actively studying nuclear energy, particularly small modular reactors (SMRs), to enhance energy security and achieve net-zero carbon emissions by 2050, while no national decision to deploy has been made yet.
China is on track to surpass both the United States and France as the world’s largest producer of nuclear energy by 2030, with a target of 110 gigawatts of installed capacity – an increase of 76% from 2025 levels. At the same time, Japan is returning to nuclear power more than a decade after the Fukushima disaster, as Prime Minister Sanae Takaichi pushes to accelerate reactor restarts and re-establish nuclear as a stable pillar of the country’s energy mix.
Across Asia, energy security is a key driver of renewed interest in nuclear power. Many economies remain heavily dependent on imported fossil fuels, much of which passes through vulnerable maritime chokepoints that can be disrupted by geopolitical tensions or conflict. Nuclear energy offers a way to reduce this exposure. Uranium is relatively inexpensive per unit of energy, can be stockpiled for long periods, and is sourced from a more geographically diversified market, making it a more resilient option.
Rising electricity demand, driven in part by the rapid expansion of artificial intelligence, is further strengthening the case for nuclear energy. Energy-hungry data centres require stable, round-the-clock power, and ongoing disruptions to oil and gas supplies pose risks to these energy-intensive operations. In Southeast Asia, the convergence of a booming data centre sector and emerging nuclear ambitions is beginning to transform regional energy planning. As electricity demand surges, nuclear power is likely to become an increasingly important component of a reliable and sustainable energy mix.
Energy security is a key driver of renewed interest in nuclear power.
Small modular reactors present both promising opportunities and significant challenges for Asia, especially Southeast Asia. On the opportunity side, SMRs can strengthen energy security and diversify power systems that are currently heavily dependent on imported fossil fuels. For many countries in the region, demand for electricity is rising quickly but grids are still developing or fragmented. SMRs, with their smaller unit size and modular deployment, fit more easily into weaker or islanded grids than large gigawatt‑scale reactors. They can be sited near industrial zones, islands, or remote regions and used to provide reliable power, which is particularly attractive for large industrial users, especially data centres. For governments pursuing net‑zero or coal‑phaseout strategies, SMRs offer a way to introduce firm low‑carbon power that can complement renewables.
At the same time, financing conditions for nuclear energy are becoming more favourable. In a significant policy shift, in June 2025 the World Bank lifted its longstanding ban on funding nuclear projects, opening new avenues for developing countries to pursue nuclear power. Similarly, the Asian Development Bank has updated its energy policy to include support for nuclear energy and is partnering with the IAEA to assist countries across Asia and the Pacific that are considering nuclear power.
However, institutional and regulatory capacity is a core challenge. Many states in Southeast Asia do not yet have fully developed nuclear regulatory authorities or long experience with nuclear power governance. Introducing SMRs does not simplify this requirement; in some ways it complicates it. Regulators must adapt frameworks originally designed for large reactors to multiple SMRs, innovative designs, or even floating reactors. Regulatory capacity is a particularly acute human‑resource bottleneck. Effective nuclear oversight depends on independent regulators who can rigorously review complex designs, license and inspect facilities, scrutinise vendor claims, and enforce compliance with international standards. The region currently lacks enough people with hands‑on nuclear engineering and regulatory experience to perform these roles.
Economically, SMRs do not automatically guarantee cheaper power. While the smaller size can lower the absolute cost of a single unit and make financing more manageable, early SMR deployments are likely to be expensive on a per‑kilowatt basis compared with mature nuclear reactor technologies. Asian countries must weigh these costs against rapidly falling prices for solar, wind, and storage, and against entrenched coal capacity.
Taken together, SMRs and conventional nuclear reactors in Asia are best understood as a strategic, long‑term option rather than a quick fix. They offer real benefits: enhanced energy security, support for industrial decarbonisation, and the possibility of being a regional pioneer in advanced nuclear technology. Yet these benefits can only be realised if governments invest early in strong regulatory institutions, legal frameworks for liability and cross‑border issues, and sustained public engagement. Without that foundation, the political, safety, and financial risks could outweigh the advantages – especially in a region where one mishap could reverberate far beyond national borders.
