What’s Fueling the Future of Energy in Asia?

Summary

Podcast Summary: Thoughts on the Market — What’s Fueling the Future of Energy in Asia?

Date: August 18, 2025
Host: Tim Chen (Morgan Stanley, Head of Asia Sustainability Research)
Guest: Mayank Maheshwari (Energy Analyst for India and Southeast Asia)

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Episode Overview

This episode dives into the shifting dynamics of global energy, with a focus on how Asia is becoming a key player in the adoption of nuclear power and natural gas. The discussion covers the rationale behind renewed nuclear investments, Asia’s rapidly rising energy consumption, the role of gas as a bridge fuel, and how these trends interplay with clean energy ambitions and the demands of the AI economy.

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Key Discussion Points & Insights

1. Asia at the Epicenter of Energy Transformation

• Nuclear’s Reputation Shift: Once viewed as too controversial and expensive, nuclear energy is now considered critical for both decarbonization and energy security.
  • “Nuclear power is stepping into the spotlight not just for decarbonization, but for energy security.” — Tim Chen [00:25]
• Massive Investments: Global projections estimate more than $2 trillion investments in these sectors by 2050, spurred partly by tech companies’ hunger for reliable, clean power.

2. Current State of Nuclear Energy in Asia

• Regional Growth Patterns:
  • Nuclear fuels supply about 10% of total global power, but nearly 20% of clean power.
  • Global power consumption has tripled since the 1980s—25 trillion units consumed last year and expected to see 25% growth in the next five years.
  • “Policymakers need energy security and hence nuclear is getting a lot more attention in Asia.” — Mayank Maheshwari [01:33]
• Country Highlights:
  • China, Korea, and Japan have mature nuclear programs.
  • In contrast, broader Asia sees nuclear as an ambition, with India making notable progress and Southeast Asia largely coal-dependent. Regulatory and technological acceptance remain hurdles, but growing interest is noted in Singapore, Vietnam, and Malaysia.

3. Intersection of Nuclear and Natural Gas in Asia

• Nuclear and gas will complement, not compete, due to nuclear’s long lead times.
• Historical Perspective: Nuclear interest spikes during energy crises (e.g., 1970s oil shock).
• Natural gas use in Asia-Pacific is set to rise at double the expected pace, driven by electrification and AI:
  • “Natural gas is definitely emerging as a dependable and affordable fuel of the future—to power everything from automobiles to humanoids, biogenetics to AI data centers and even semiconductor production.” — Mayank Maheshwari [03:23]
• By 2030, Asia is projected to consume 70% of globally traded natural gas.

4. Sustainability Considerations and Green Taxonomies

• Exclusion Trends: Only 2.3% of global assets under management exclude nuclear—a lower rate than alcohol or gambling.
• Regional Differences:
  • Europe’s exclusion rates are decreasing, now at 8.4%.
  • North America and Asia barely exclude nuclear (0.3% and 0.6%, respectively).
  • The World Bank’s ending of its nuclear lending ban and the inclusion of nuclear in EU, China, and Japan’s green finance frameworks make nuclear projects eligible for green designation.
  • “The World Bank has also lifted its decades long ban on financing nuclear projects, which is important… can provide capital to fund the early stage of nuclear plant project or construction.” — Tim Chen [04:53]

5. AI, Hyperscalers, and Changing Utility Economics

• Premiums for Nuclear Power: In the US, nuclear commands a $30-50/MWh premium, a trend not yet seen in Europe or Asia due to infrastructure differences.
  • “In the US we are seeing the nuclear power is commanding a premium... that will support the nuclear utilities in the US.” — Tim Chen [05:55]
• Data Center and AI Boom: Energy-hungry AI and data centers drive demand for dependable 24/7 power, bolstering nuclear’s investment case.

6. The Broader Energy Mix: Nuclear, Gas, and Renewables

• Nuclear: Offers clean, reliable baseline power, critical for sustainability goals and “additionality”—providing truly new generation rather than repurposed capacity.
• Natural Gas: Acts as a quick, flexible solution to meet rising demand while longer-term nuclear and renewable sources ramp up.
  • “Natural gas will mainly act as a bridge field to provide flexibility to the grid.” — Guest Speaker [07:55]
• Renewables: Fastest-growing segment but require storage/battery systems to handle intermittency. Continued need for integration with nuclear and gas.

7. Investing in the Energy Transition

• Growing synergy (“diffusion”) between nuclear, gas, and renewables; natural gas demand will rise faster than most other fuels this decade.
• Morgan Stanley has identified 75 equities globally that align with the natural gas adoption and AI power thematic, including equipment producers, pipeline operators, hybrid utilities, and infrastructure firms.
  • “It’s clear that nuclear... isn’t just about reactors, it’s about rethinking energy systems, sustainability and geopolitics.” — Mayank Maheshwari [09:45]

8. The Decade Ahead: Balancing Ambition with Execution

• The success of Asia’s energy transformation will hinge on harmonizing ambitious policy goals with practical, on-the-ground execution.
  • “The last decade will be defined by how we balance ambition with execution. Nuclear, together with gas and renewables, will be central to Asia’s energy future.” — Tim Chen [10:04]

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Memorable Quotes & Timestamps

• Tim Chen [00:25]: "Nuclear power is stepping into the spotlight not just for decarbonization, but for energy security."
• Mayank Maheshwari [01:33]: "Policymakers need energy security and hence nuclear is getting a lot more attention in Asia."
• Mayank Maheshwari [03:23]: "Natural gas is definitely emerging as a dependable and affordable fuel of the future—to power everything from automobiles to humanoids, biogenetics to AI data centers and even semiconductor production."
• Tim Chen [04:53]: "The World Bank has also lifted its decades long ban on financing nuclear projects, which is important… can provide capital to fund the early stage of nuclear plant project or construction."
• Tim Chen [05:55]: "In the US we are seeing the nuclear power is commanding a premium... that will support the nuclear utilities in the US."
• Mayank Maheshwari [09:45]: "It’s clear that nuclear... isn’t just about reactors, it’s about rethinking energy systems, sustainability and geopolitics."
• Tim Chen [10:04]: "The last decade will be defined by how we balance ambition with execution. Nuclear, together with gas and renewables, will be central to Asia’s energy future."

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Notable Segments & Timestamps

• [00:25]: Asia’s role in global nuclear investment surge
• [01:10–02:33]: Regional perspectives on power consumption and nuclear adoption
• [02:44–03:50]: Complementary roles of nuclear and gas; Asia’s natural gas trajectory
• [04:26–05:42]: Nuclear energy in sustainability investment and green taxonomies
• [05:55–07:14]: Nuclear power pricing and regional differences in utility economics
• [07:55–08:51]: The interplay of nuclear, gas, and renewables in the future energy mix
• [08:51–10:04]: Investment strategies for benefiting from natural gas and the energy transition

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Takeaways

• Asia is accelerating as an energy demand and innovation hub, especially in nuclear and gas.
• Investors, tech companies, and policymakers increasingly embrace nuclear for reliability, security, and decarbonization.
• Natural gas remains critical as both a bridge and a complement to renewables and nuclear, especially amidst surging AI-driven electricity demand.
• Sustainability finance is evolving to recognize nuclear’s “green” credentials in many regions.
• Success will be defined by how ambition, execution, and policy converge to reshape Asia’s energy future.

Transcript

[A]

Welcome to Force on the Market. I'm Tim Chen, Morgan Stanley, head of Asia Sustainability Research.

[B]

And I'm Mayank Maheshwari, the energy analyst for India and Southeast Asia.

[A]

Today, a major shift in global energy. We are talking about nuclear power, gas adoption and what the future holds. It's Monday, August 18th at 8am in.

[B]

Hong Kong and it's 8am in Singapore.

[A]

Nuclear power is no longer leash is the megatrend. It was once seen as controversial and capital intensive, but now nuclear power is stepping into the spotlight not just for decarbonization, but for energy security. Global investment projections in these sectors are now topping more than 2 trillion by 2050. This is fueled by growing appetite from major tech companies for clean, reliable 24. 7 energy. More specifically, Asia is emerging at the epicenter of capacity growth and that's where your coverage comes in. Mayank, with the rising consumption of electricity, how does nuclear energy adoption stack up in your universe?

[B]

Tim, it's in a fascinating world on power right now that we are seeing now the tight global power market's perspective is key on why there is so much investor and policymaker attention to nuclear power. Nuclear fuels accounted for about a tenth of the power units produced globally. However, they are almost a fifth of the global clean power generation. Now power consumption is at another tripping point and this is after tripling since 1980s. To give you a perspective, 25 trillion units of power were consumed worldwide last year and we see this growing rapidly at a 25% pace in the next five years or so. And if you look at consumption growth outside of China, it's even faster at 2 1/2x for the rest of the decade when compared to the last decade. Now policymakers need energy security and hence nuclear is getting a lot more attention in Asia. While China, Korea and Japan have been using nuclear energy to power the economy, the rest of Asia it has been more an ambition. With India being the only country making progress last decade. Southeast Asia still has a lot more coal and nuclear remains an ambition as technology acceptance by public and regulatory framework remains a key handicap. We do however see policymakers in Singapore, Vietnam and Malaysia looking at nuclear fuels more seriously. Now with SMRs also being discussed.

[A]

That is a really interesting perspective. Mo Yang so you have been bullish on the Asia gas adoption story. So how do you think gas and nuclear will intersect in this region?

[B]

I think nuclear and natural gas like all other fuel stem will complement each other. However, the long gestation to put nuclear capacity makes gas a viable alternative for energy security. As I was telling you earlier policymakers are definitely focusing on it. As you know, the last big increase in focus in nuclear fuels also happened in the 1970s oil shock again when energy security came into play. Global natural gas consumption has more than doubled in the last three decades and is set to surprise again with Asia pac's consumption pretty much set to rise at twice the pace versus what right now expectations are by the street. In this age of electrification and AI adoption, natural gas is definitely emerging as a dependable and an affordable fuel of the future to power everything from automobiles to humanoids, biogenetics to AI data centers and even semiconductor production which is getting so much focus nowadays. We expect global consumption to rise again after not growing this decade for natural gas. As Asia's natural gas adoption rises and grows at 5% CAGR 2024-2030 with consumption for gas surprising in China, India and Japan. So all the large economies are seeing this big increases especially versus expectations the region will consume 70% of the globally traded natural gas by 2030. So that's how important Asia will be for the world. And while global gas glut is well flagged, especially coming out of the us, Asia's ability to absorb this glut is not very well appreciated. Tim, Having said that, nuclear energy is clearly getting more interest globally and is often debated in sustainability circles. How do you see its role evolving in sustainability frameworks as well as green taxonomies?

[A]

On sustainability? One thing we talk about is exclusion that is really important for many sustainability investors. And when it comes to exclusion for nuclear power, only 2.3% of global AUM now exclude nuclear power. And then that percentage is lower than alcohol, military contracting and gambling. And the exclusion rate is also different depending on the region. Right now European investors have the highest exclusion rate but have reduced the real care exclusion from 10.9% to 8.4% as of December last year. And North American and Asian exclusion rates are very very low, just 0.3% and 0.6% respectively. So these exclusions in North American and Asian are minimal. The World bank has also lifted its decades long ban on financing nuclear project, which is important because World bank can provide capital to fund the early stage of nuclear plant project or construction. And finally on green finance, the eu, China and Japan have incorporated the nuclear power into their green taxonomies. So that means in some circumstances nuclear project can be considered as green.

[B]

Now we have talked about AI and its need for power on this show. Nuclear power has a significant role to play in that equation with hyperscalers paying premium for Nuclear power, how does this support the investment case for nuclear utilities?

[A]

Yeah, so that depends on the region and then different region will have different dilemmas. So let's talk about us first. In the US we are seeing the nuclear power is commanding a premium of approximately around 30 to $50 per megawatt hour above the market weight. So when it comes to this price premium we do think that will support the nuclear utilities in the us. And then in the report we highlighted a few names that we believe the current stock price haven't really pricing this premium in the market. And then for other region it depends on the region as well. So Mayan, you have talked about Southeast Asia. Southeast Asia right now given the lack of nuclear pipeline and then also the favorable economies of gas, we are not seeing that sort of premium yet in Southeast Asia. We are also not seeing that premium in Europe and in China as well. Given that right now this sort of premium is mainly a US exclusive situation. So depending on the region we are seeing different opportunities for nuclear utilities when it comes to the price premium.

[B]

Definitely Tim, I think the price premiums are dependent on how tight these power markets in each of the geographies are. But like how does nuclear fit into broader energy mix alongside renewables and natural gas for you?

[A]

So all these are really important for nuclear power. Investors really appreciate the clean and reliable and 247 leisure of the energy supply to support their operations and sustainability goals. It and then nuclear is also important to bring the power additionality which means nuclear is bringing truly new energy generation rather than simply utilizing a system or already planned capacity. We are seeing that sort of additionality in the LIU nuclear project and also the SMR in future as well. So for natural gas that is also important. As Mayan you have mentioned, natural gas.

[C]

Mainly act as a bridge field to provide flexibility to the grid. And then in the US it is currently the primary near term solution for powering AI and data center to increase the electricity supply due to its speed to the market and reliability. And natural gas is expected to meet immediate demand while longer term solutions like nuclear projects and also SMR are developed. And finally renewable energy is also important. It represents a fastest growing and increasingly cost competitive energy source. They also dominate the new capacity additions as well. But for renewable energy it also requires complementary technologies such as battery ESS to address the intermittency issues. So Mayan, we have talked so much about nuclear and back to you on natural gas. You are really bullish on natural gas. So how and where do you think are the best way to play it.

[B]

As you were kind of talking about the intersection and diffusion between nuclear, natural gas and the renewable markets, what you are seeing is that our bullishness on consumption of natural gas is basically all about how this diffusion plays out. Consumption on natural gas will rise much quicker than most fuels for the rest of the decade if you think about numbers making it more than just a transition fuel. Hence, Morgan Stanley Research has a list of 75 equities globally to play the thematic of this diffusion and it is happening in the power markets. These equities are part of the natural gas adoption and the powering AI thematic as well. So these include the equipment producers on power, the gas pipeline players who are basically supporting the supply of natural gas to some of these power plants, hybrid power generation companies which have a good mix of renewables, natural gas, a bit of nuclear sometimes, and infrastructure providers for energy security. So all these 75 stocks are effectively playing at the intersection of all these three thematics that we are talking about. As Morgan Stanley Research, it's clear that nuclear Rezaia system isn't just about reactors, it's about rethinking energy systems, sustainability and geopolitics.

[A]

Yes, and the last decade will be defined by how we balance ambition with execution. Nuclear together with gas and renewables will be central to Asia's energy future. But Yang, thanks for taking the time to talk. Great speaking to you Tim, and thanks for listening. If you enjoy thoughts on the market, please leave us a review Wherever you listen and share the podcast with a friend or colleague today.

[D]

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