Tech giants are increasingly looking to nuclear reactors to power their energy-hungry data centers. Amazon and Microsoft each signed major contracts with nuclear power plants in the United States this year. And both Microsoft and Google have shown interest in next-generation small modular reactors, which are still in development.
New AI data centers require a lot of electricity, which has pushed companies further and further away from their climate goals with rising CO2 emissions. Nuclear reactors could potentially solve both problems. As a result, Big Tech is breathing new life into America's aging nuclear reactor fleet while pushing hard for new nuclear technologies that have yet to be proven.
“Certainly the outlook for this industry is better today than it was five and 10 years ago,” said Mark Morey, senior adviser for power analysis at the U.S. Department of Energy's Energy Information Administration.
“Of course the prospects for this industry are better today”
Much of America's aging nuclear fleet came online in the 1970s and 1980s. But the industry faced setbacks after high-profile accidents such as Three Mile Island and the Fukushima disaster in Japan. Nuclear power plants are also expensive to build and generally less flexible than gas-fired power plants, which now make up most of the U.S. electricity mix. Gas-fired power plants can adapt more quickly to fluctuations in electricity demand.
Nuclear power plants typically provide constant “base load” energy. And that makes it an attractive energy source for data centers. Unlike manufacturing or other industries that operate during the day, data centers operate 24 hours a day.
“When people are sleeping and offices are closed and we don’t use as much [electricity]“What combines nuclear power very well with data centers is that they require power virtually 24/7,” says Morey.
This consistency also distinguishes nuclear energy from wind and solar energy, whose output decreases depending on the weather or time of day. Over the last five years or so, many tech companies have accelerated their climate goals and committed to achieving net-zero carbon emissions.
However, the additional energy demands of new AI tools have pushed these goals even further out of reach in some cases. Microsoft, Google and Amazon have all seen their greenhouse gas emissions increase in recent years. Generating electricity from nuclear reactors is one way for companies to reduce these CO2 emissions.
A feat never before accomplished in the United States
Microsoft signed an agreement in September to buy power from the shuttered Three Mile Island. “This agreement is an important milestone in Microsoft’s efforts to help decarbonize the electric grid and support our commitment to becoming carbon negative,” Bobby Hollis, vice president of energy at Microsoft, said in a press release at the time.
The plan calls for reviving the plant by 2028, a feat never before accomplished in the United States. According to Joe Dominguez, president and CEO of Constellation, the company that owns the plant, the plant closed early in 2019 “due to poor economic conditions.” But the outlook for nuclear energy is now brighter than ever as companies seek carbon-free sources of electricity.
In March, Amazon Web Services purchased a data center campus operated by the neighboring Susquehanna Nuclear Power Plant in Pennsylvania. This $650 million deal secures power from the sixth largest nuclear facility in the United States (out of 54 locations today).
Google is considering sourcing nuclear energy for its data centers as part of its sustainability plans. “Obviously, the evolution of AI investments has increased the scale of the task required,” CEO Sundar Pichai said in an interview with Nikkei this week. “We are now looking at additional investments, be it solar, and evaluating technologies such as small modular nuclear reactors, etc.”
It refers to next-generation reactors that are still in development and will not be connected to the power grid until the 2030s at the earliest. The U.S. Nuclear Regulatory Commission certified a design for an advanced small modular reactor for the first time last year. These advanced reactors are about a tenth to a quarter the size of their older predecessors; Their size and modular design are intended to make construction easier and more cost-effective. They could also be more flexible than larger nuclear power plants when it comes to adapting their electricity production to changing demand.
Bill Gates, for example, is fully committed to nuclear energy. He is the founder and chairman of TerraPower, a company that develops small modular reactors. Last year, Microsoft posted a job posting for a principal program manager to lead the company's nuclear energy strategy, which would include small modular reactors.
Bill Gates, for example, is fully committed to nuclear energy
“I firmly believe that nuclear energy can help us solve the climate problem, which is very, very important,” Gates said in an interview with The edge last month.
This week, the Department of Energy released a new report that predicts that U.S. nuclear capacity could triple by 2050. After years of stagnation, U.S. electricity demand is expected to rise thanks to electric vehicles, new data centers, crypto mining and manufacturing facilities. According to the report, this growing demand is changing the outlook for nuclear energy. Just a few years ago, energy suppliers shut down nuclear reactors. Now they are extending the lifespan of reactors by up to 80 years and plan to restart reactors that have shut down, they say.
“It is reasonable to assume that the technology companies could trigger a new wave of investment in nuclear energy in the US and around the world. There has been a lot of talk in the industry about the idea,” Ed Crooks, senior vice president of Wood Mackenzie and thought leadership executive for the Americas, wrote in a blog post this week.
That doesn't necessarily mean that nuclear energy is progressing smoothly in the United States. New reactor designs and plans to restart decommissioned nuclear power plants are still subject to regulatory approval. Initiatives to build both old-fashioned power plants and new designs have faced rising costs and delays. Amazon is already facing opposition to its nuclear energy plans in Pennsylvania over concerns it could drive up electricity costs for other consumers. And the nuclear energy industry still faces opposition over the impact of uranium mining on surrounding communities and concerns about storing radioactive waste.
“It’s an interesting and challenging time in many ways,” says Morey. “We’ll see what happens.”