LONDON (MarketWatch) -- For 30 years Sweden stood proudly at the forefront of the world's antinuclear movement. Now, in one of the clearest signs of a nuclear-power renaissance sweeping the globe, it's striving to lift a decades-old ban on new reactors.

And it's not alone. Ballooning energy needs, volatile oil and gas prices, increased competition for dwindling supplies, and rising concerns about global warming are all pushing countries around the world to reconsider nuclear energy. Meanwhile, memories of accidents like those at Three Mile Island and Chernobyl have faded, while a continuing string of deadly and environmentally damaging mishaps related to coal and oil production have highlighted the downside of continued reliance on fossil fuels.

As a result, nuclear power is being touted by politicians and scientists around the world as an eco-friendly, economical and efficient answer to the planet's looming energy challenge. In short, the nuclear option is back on the table.

"The time is very right for having nuclear energy now," Luis Echavarri, director general of the Nuclear Energy Agency, said in an interview with MarketWatch. "Something is happening. The situation is shifting from lots of political and social concerns to issues of financing.

"There is much more social acceptance."

Thawing resistance

The world's energy needs are skyrocketing. Global electricity demand will increase 2.5 times by 2050, according to the NEA, which has predicted that between 2030 and 2050 the world will need between 23 and 54 new nuclear reactors per year to replace decommissioned plants and to increase power production.

Overall, the NEA, a division of the Organisation for Economic Cooperation and Development, has forecast the number of reactors worldwide growing to between 600 and 1,400 by 2050, from 430 today. That represents necessary investment of between $680 billion and $3.9 trillion, at roughly $4 billion per reactor.

A recent political trigger in Europe, the NEA's Echavarri explained, was the disruption of gas supplies to several European countries during the bitterly cold 2008-09 winter, following a pricing dispute between Ukraine and Russia. The European Union depends on Russia for roughly a quarter of its gas supplies, and the disruption was a wakeup call to EU governments.

"That really drove home the need to have stable and secure supplies," Echavarri said.

Another key factor behind the Western world's change of heart on nuclear energy is the technology's eco-friendly credentials. Unlike the combustion of fossil fuels, nuclear fission does not produce carbon dioxide.

"We have set some very ambitious targets for reduction in greenhouse gas. Here in the U.S. we're talking about an 80% reduction by 2050, and when you look at an analysis of what it's going to take to get there, your options come down pretty quickly [to] renewables and nuclear energy," said Adrian Heymer, head of the Washington-based Nuclear Energy Institute.

In other words, climate change has accomplished in the space of a few years what two decades of lobbying couldn't: It put an end to the industry's nuclear winter.

"One of the most important factors driving the nuclear renaissance is undoubtedly climate change," said Christian Taillebois of Foratom, a lobbying group that seeks to promote the use of nuclear energy in Europe.

He added, however, that there are also economic reasons for the newfound appeal of atomic reactors.

"It's true that the construction costs are very large, but the maintenance and fuel expenses are vastly lower than for other sources of energy," he said, adding that new plants can be operated for 60 years, compared with 30 or 40 for the earlier generations.

“ 'The situation is shifting from lots of political and social concerns to issues of financing. There is much more social acceptance.' ” — Luis Echavarri, NEA

In a study published last month on the projected costs of generating electricity, the OECD found that nuclear is now a more economically competitive source of energy than coal, gas or wind.

It is because of this mix of economic, social, political and scientific factors that nuclear is back on the table for many formerly wary governments.

Several European countries are currently building reactors, including Hungary, Finland and Poland. Others are proposing legislation to extend the lifespan of current reactors (Germany) or selecting sites for new reactors (U.K.).

In the U.S., President Barack Obama in February launched a program featuring federal loan guarantees worth $8.3 billion for the building of two new reactors near Waynesboro, Ga. And in his budget request for 2011, Obama has asked for $46 billion more. Read more about recent nuclear developments in the U.S.

Incidents usher in nuclear winter

It wasn't always like this. For years, most Europeans wanted to hear only two words in any conversation about nuclear energy: "phase out."

After an initial wave of enthusiasm for the civil use of nuclear technology in the 1960s and 1970s, when hundreds of reactors were built throughout the world, a series of accidents precipitated its disgrace.

Three Mile Island nuclear-power-generating station, which suffered a partial meltdown in 1979.

A 1979 accident at the Three Mile Island plant in the U.S. -- where one of the reactors experienced a partial meltdown and released radioactive gases -- was one of the highest-profile causes for alarm.

The disaster seven years later at Chernobyl, in which a reactor at a Soviet nuclear plant in Ukraine exploded and spread a radioactive plume over large parts of Eastern Europe crystallized the worst fears about the technology and halted the construction of new nuclear reactors in most countries. See slide show of the worst nuclear incidents.

Sweden was among the first European nations to turn its back on nuclear.

Shortly after the Three Mile Island incident, Sweden conducted a referendum to gauge its citizens' stance on nuclear power, which resulted in a ban on new reactors and plans to phase out all existing plants by 2010.

Over the following decade, Germany, Spain and Italy turned similarly hostile to the technology.

The role of France

Through the industry's ups and downs, one country has remained a constant champion of nuclear power and remains at the forefront of current efforts to rehabilitate nuclear power: France.

The country has the second-highest number of nuclear plants after the U.S. and derives more than 80% of its electricity from this source. During the dark years of nuclear, the French provided indispensable maintenance for many reactors and continued to invest in safety and efficiency improvements.

Recently, the country proposed the creation of a civil nuclear institute, based in France, to promote the adoption of nuclear energy around the world and to educate scientists.

There are, of course, business reasons for France's championing of atomic technology: The country is home to Areva (CEI), a 90% state-owned company that is also the world's biggest builder of atomic reactors. The company was created in 2001 from a jumble of state-owned industrial assets to create a global nuclear powerhouse, with some 75,000 employees and an order book of more than 43 billion euros.

In December, however, the firm, along with partners GDF-Suez (GSZ) and Total (FP), lost a contract worth between $20 billion and $40 billion over its lifetime to build new reactors in the United Arab Emirates to a lower-cost South Korean rival.

It was a heavy blow. In France the company was accused of failing to capitalize on the resurgence of demand for nuclear energy and of botching construction of a prototype European pressurized reactor (EPR) in Finland. The reactor, the flagship of France's latest nuclear drive, is three years behind schedule and more than $2 billion overbudget.

Despite these hiccups, ties between the French government and the country's nuclear industry remain close. They have always been, sometimes uncomfortably so. Anne Lauvergeon, the head of Areva, was repeatedly tipped to enter the French government under President Sarkozy. In the wake of the Abu Dhabi failure, many called for her head and demanded Areva be broken up.

But recent deals, including one to build at least four EPRs for a venture between Enel (ENEL) and EDF (EDF) in Italy, have helped soothe critics.

Meanwhile, companies throughout the world are looking to board the nuclear bandwagon.

Last month Vladimir Putin said Russia aims to control a quarter of the global nuclear-power market and would boost nuclear-energy use at home, starting with a $6 billion investment this year. Russia's international nuclear profile is rising quickly, after recent deals in Iran, China and India.

The latter is one of the world's largest nuclear markets, estimated at $150 billion, and is growing rapidly. India plans to double the share of nuclear power on its grid to more than 8% over two decades.

Indeed, Asia has embraced nuclear power more enthusiastically than any other region in recent years. Thirty-seven mostly large reactors are under construction, compared with 18 for the rest of the world. See full story on Asia's nuclear ambitions.

Europe, meanwhile, remains a significant and lucrative market. U.S.-Japanese venture GE Hitachi plans to sell between 10 and 15 new reactors there in the next 10 years. Read more about whether nuclear makes a good investment.

The issue of waste

One issue that has helped fuel opposition to nuclear energy, however, is the absence of a stable and lasting strategy for nuclear-waste management, with such waste quickly accumulating as plants around the world approach the end of their licenses.

Used nuclear fuel was originally intended to be stored at plant sites for a few decades in steel-lined concrete pools or basins before being moved to a permanent repository.

Many of these pools have now filled up. Producers have expanded their storage capacity using above-ground airtight canisters made out of steel or steel-reinforced concrete.

But longer-term solutions are needed, and environmental advocates argue that current disposal strategies offer no guarantee the waste won't seep back into the environment, potentially contaminating water supplies and the food chain.

Partly because of the sensitivity of that issue, there's no common legislation on the issue of nuclear waste in Europe, though a text is under discussion and could be adopted in the latter part of the year.

There are also concerns that, as the waste is stored, the products of fission decay, making that waste less radioactive than it had previously been.

As nuclear waste becomes less dangerous, access to the remaining plutonium -- which can be used to build nuclear weapons -- could grow less problematic. That, then, presents a risk few are willing to take.