With the demand for energy increasing rapidly, technology companies are looking for innovative solutions to meet the demand created by artificial intelligence (AI) and other new technologies, and inevitably, in addition to solar and wind energy, several technology companies to invest in nuclear power projects.
The clear shift in public perception of nuclear power has once again put the controversial – for its risks to people and the environment – energy source on the table as an option, with US nuclear power expected to grow significantly in the coming decades .
About a third of the nuclear power plants in the US are in talks with technology companies to supply electricity to the data centers. Several major tech companies have already struck deals with nuclear power companies to provide the clean energy needed to power new energy-intensive technologies such as artificial intelligence.
Doubling demand for electricity by 2050
Global electricity demand is expected to double by 2050, compared to 2020 levels, and there is enormous pressure to meet this demand using renewable energy sources. The rapid increase in the use of complex technologies is expected to contribute significantly to this increase in demand.
Demand for renewable energy will likely grow exponentially over the next ten years, in line with the growing use of artificial intelligence.
Several tech companies are scrambling to develop larger, more powerful AI models to make available to users.
But larger models will require more electricity to power them, which could limit their rollout unless energy companies can provide the clean energy needed to run giant data centers in the coming years.
In April, the chief marketing officer of chip design company Arm, Ami Badani, said that data centers currently account for about 2% of global energy consumption. However, with the development of AI technology, Badani expects that energy consumption by the technology sector could contribute about a quarter of total energy use in the US by 2030. Badani pointed out that, “ChatGPT requires 15 times more energy than a traditional web search.”
Nuclear power and artificial intelligence
Tech companies have invested heavily in wind and solar power to power their data centers and are now looking for alternative clean power supplies. Last year, Microsoft signed a deal to buy power from Helion starting in 2028. Oklo plans to build a massive network of small-scale nuclear power reactors in rural southeastern Idaho to power data centers as the electricity demand. It also plans to build two commercial plants in southern Ohio.
However, starting some of these nuclear projects is not an easy task. Oklo has struggled to get the support of nuclear power regulators. In 2022, the Federal Nuclear Regulatory Commission (FERC), which oversees commercial nuclear power plants, rejected the company’s planning application for its Aurora Idaho project because it did not provide enough safety information.
If approved, the project will cover 3,900 square meters and include a 15 MW nuclear fission reactor.
Co-locating data centers directly with nuclear power plants
In addition to red tape from regulators, many utilities oppose new nuclear projects because of their expected impact on the grid. Some data centers require 1 GW or more of power, which is roughly the total capacity of a US nuclear reactor. PJM Interconnection, the largest grid operator in the US, recently warned that electricity supply and demand are tightening as new generation deployment lags behind demand. However, some technology companies are proposing to connect data centers directly to nuclear power plants, practically in a form of co-location, to reduce the burden on the grid.
However, several US utilities oppose the co-housing plans. In March, Amazon Web Services bought a data center powered by the Susquehanna Nuclear Power Plant in Pennsylvania from Talen Energy for $650 million. The deal allows electricity to be sold directly from the plant to the AWS data center, but utilities including American Electric Power and Exelon have filed complaints with FERC about that deal. Utilities worry that if more deals like this one go through, there will be less clean energy available to power the grid as U.S. electricity demand rises. The complaint to FERC said, “This will harm existing customers.”
As the demand for energy to power the data centers required to run innovative new technologies increases rapidly, technology companies are investing heavily in nuclear power companies to provide clean energy. However, regulatory constraints and opposition from utilities are limiting the development of new projects. FERC will play an important role in the future of nuclear power in the US and could ultimately decide whether or not tech companies have access to clean nuclear power for their data centers.
