As Data Centers Go Nuclear To Meet AI Power Demand, Worries Grow About The Impact On Everyone Else

Tech companies are in talks with nuclear power plant owners for their help in meeting soaring demand fueled by the artificial intelligence boom. But such a move could divert resources from existing electricity grids and increase reliance on carbon-intense sources. 

The owners of about a third of the U.S.’s nuclear power plants are in talks with tech companies about providing electricity to them directly, The Wall Street Journal reports. Nuclear plants would give well-funded data centers a 24/7 source of carbon-free energy and enable speedy addition of the centers, which are sprouting rapidly amid the global AI race, the WSJ states.

Amazon Web Services is working with Constellation Energy, the largest owner of U.S. nuclear power plants, on a deal to get electricity from one of its plants on the East Coast, according to the WSJ.

Diverting existing nuclear power from U.S. grids could have serious consequences, though. Those include more reliance on natural gas, a carbon-producing power source, raising prices for customers and straying further from emissions reduction goals, the WSJ reported.

Talen Energy in March agreed to sell a planned data center in Pennsylvania to Amazon Web Services for $650M. Talen intends to sell Amazon power from its stake in the nearby Susquehanna nuclear power plant.

Local utility companies last week said the proposal could lead to cost shifting that harms utility customers and asked the Federal Energy Regulatory Commission to hold a hearing on the issue, Utility Dive reported. 

“The co-located load should not be allowed to operate as a free rider, making use of, and receiving the benefits of, a transmission system paid for by transmission ratepayers,” the utility companies said, according to Utility Dive. 

Small nuclear reactors have been back on the radar in recent months against the backdrop of increasingly dire power constraints facing data center developers. These reactors range in output capacity from less than a megawatt to 300 MW, which is closer to a power plant on a Navy submarine than a traditional nuclear power station, Bisnow previously reported.

Equinix, the world’s largest data REIT, agreed in April to purchase hundreds of megawatts of nuclear power from Oklo, a California-based company seeking to manufacture small modular reactors.

But the world’s largest tech companies are reportedly looking for sites to deploy more than a gigawatt of capacity at a time. One GW can provide a full year of power to nearly 900,000 households. The global hyperscale data center capacity will triple in the next six years, while data centers’ average power demand will double even sooner. 

The Electric Reliability Council of Texas now forecasts that the state will demand 150 GW of power by 2030, up from 85 GW now. More than half of the projected demand is from crypto mining and data centers, including some run by artificial intelligence. 

The increasing demand is good news for power plants in competitive markets, which have been struggling since being overbuilt in the 1990s, the WSJ reported. Nuclear power has had a hard time competing with wind, solar and natural gas, but it has the advantage of being carbon-free and running constantly, unlike power that relies on the weather. 

Shares of nuclear power companies in talks with data centers have risen substantially this year, according to the WSJ. Vistra, the country’s largest power generator, has been in talks with both nuclear and gas plants. It has seen its shares more than double this year. 

“In this case, the customer has come to us and come to many in the industry and said ‘I need as much power as you can make available,’” Vistra CEO Jim Burke said, according to the WSJ.