Big Tech has cozied up to nuclear power

Tech giants are increasingly looking to nuclear reactors to power their energy-hungry data centers. Amazon and Microsoft have signed major deals with nuclear power plants in the US this year. And both Microsoft and Google have shown interest in next-generation small modular reactors that are still in development.

New AI data centers require a lot of electricity, which has pushed companies further away from their climate goals as their carbon emissions have increased. Nuclear reactors could potentially solve both of these problems. As a result, Big Tech is breathing new life into America's aging fleet of nuclear reactors while also throwing its weight behind emerging nuclear technologies that have yet to prove themselves.

“Obviously, the prospects for this industry are brighter today than they were five and 10 years ago,” said Mark Morey, senior adviser for electricity analysis at the US Department of Energy's Energy Information Administration.

Most of America's aging nuclear fleet came online in the 1970s and 1980s. But the industry has faced pushback after high-profile accidents like Three Mile Island and Japan's Fukushima disaster. Nuclear power plants are expensive to build and generally less flexible than the gas plants that now make up the largest share of the US electricity mix. Gas-fired power plants can ramp up and down more quickly with the ebb and flow of electricity demand.

Nuclear power plants typically provide constant “baseload” power. And that makes it an attractive power source for data centers. Unlike manufacturing or other industries that operate during daytime business hours, data centers operate around the clock.

“When people sleep and the office is closed and we're not using as much [electricity]Nuclear power matches up very nicely with data centers that require 24/7 power,” says Morey.

That consistency separates atoms from wind and solar energy that decays with weather or time of day. Over the past five years or so, many technology companies have accelerated climate goals, pledging to reach net zero carbon dioxide emissions.

The additional power demands of new AI tools, however, have put those goals further out of reach in some cases. Microsoft, Google and Amazon have all seen their greenhouse gas emissions rise in recent years. Getting electricity from nuclear reactors is one way companies can try to reduce those carbon emissions.

Microsoft signed a deal to buy power from the shuttered Three Mile Island in September. “This agreement is a major milestone in Microsoft's efforts to help decarbonize the grid in support of its commitment to becoming carbon negative,” Bobby Hollis, Microsoft's VP of energy, said in a press release at the time.

The plan is to revive the plant by 2028, a feat never before accomplished in the United States. The plant “closed prematurely due to the poor economy” in 2019, said Joe Dominguez, president and CEO of Constellation, the company that owns the plant. But the outlook for nuclear power has grown over the years now as companies seek sources of carbon-free electricity.

In March, Amazon Web Services purchased a data center campus powered by the adjacent Susquehanna Nuclear Power Plant in Pennsylvania. That $650 million deal secures power from the sixth largest nuclear facility in the United States (out of 54 sites today).

Google is considering procuring nuclear power for its data centers as part of its sustainability plan. “Certainly, the trajectory of AI investment has added to the scale of work required,” CEO Sundar Pichai said in an interview. Nikkei This week “we're now looking at additional investment, whether it's solar, and evaluating technologies like small modular nuclear reactors.”

He's referring to next-generation reactors that are still in development and not expected to be ready to connect to the power grid until the 2030s. The US Nuclear Regulatory Commission certified a design for an advanced small modular reactor for the first time last year. These advanced furnaces are about one-tenth to one-fourth the size of their older predecessors; Their size and modular design are supposed to make their construction easier and cheaper. They can be more flexible than large nuclear plants in adjusting how much electricity they produce to accommodate changes in demand.

Bill Gates, for one, is all into nuclear power. He is the founder and chair of TerraPower, a company that manufactures small modular reactors. Last year, Microsoft published a job listing for a key program manager to lead the company's nuclear power strategy that would include small modular reactors.

“I'm a big believer that nuclear power can help us solve the climate problem, which is very important,” Gates said in an interview. The Verge last month

This week, the Department of Energy released a new report that estimates that US nuclear capacity could triple by 2050. After years of flatlining, demand for electricity in the US is expected to rise thanks to EVs, new data centers, crypto mining and manufacturing facilities. According to the report, growing demand is changing the outlook for nuclear power. Just a few years ago, utilities shut down nuclear reactors. Now, they are extending the life of reactors up to 80 years and planning to restart those that have been shut down, it said.

“It's reasonable to think that technology companies could catalyze a new wave of nuclear investment in the United States and around the world. There's been a lot of talk about the idea in the industry,” Ed Crooks, Wood Mackenzie's senior vice president of executive thought leadership for America, wrote in a blog post this week.

That doesn't mean it's all smooth sailing for nuclear power in the US. New reactor designs and plans to restart closed nuclear power plants are still subject to regulatory approval. Initiatives to build both old-school power plants and new designs have faced rising costs and delays. Amazon has already faced opposition to its nuclear power plan in Pennsylvania, saying it could raise electricity costs for other customers. And the nuclear power industry still faces pushback over concerns about the impact of uranium mining on nearby communities and where to store radioactive waste.

“It's an interesting time, challenging in many ways,” Morey said. “We'll see what happens.”