Microsoft has made a significant move by agreeing to restart the Three Mile Island nuclear power plant. Meanwhile, Google has partnered with small modular reactor developer Kairos to establish 500 megawatts of generation capacity. Additionally, Amazon has invested in another small modular reactor developer, X-energy. These developments signal a growing interest in nuclear power among major technology companies, potentially reshaping the future of the energy transition.
Historically, Big Tech focused on transitioning to renewable energy sources, primarily wind and solar, to replace gas and coal. However, the surge in demand for electricity driven by the AI boom has prompted these companies to reconsider their energy strategy. They have recognized that wind and solar alone cannot provide the consistent electricity supply they require.
“Nuclear plants are the only energy sources that can consistently deliver on that promise,” said Joe Dominguez, CEO of Constellation Energy, referring to the need for a reliable electricity supply with low emissions.
Michael Terrell, Google’s senior director for energy and climate, emphasized that their partnership with Kairos Power is crucial for advancing technologies necessary to achieve net-zero and 24/7 carbon-free energy goals. He expressed hope that more communities could benefit from clean and affordable power in the future.
The tech industry has been slow to realize that clean energy must also be reliable. Batteries cannot make wind and solar sources available around the clock. “These large investments show the tech industry does not feel renewables and batteries can provide enough stable or cost-effective power and nuclear will be needed,” stated the chair of the American Nuclear Society’s International Council and CEO of Lightbridge Corporation, reflecting a growing acknowledgment of the limitations of traditional renewable sources.
However, Big Tech’s commitment to nuclear energy will take time to materialize. For instance, while Microsoft has plans to restart Three Mile Island, this depends on permits from relevant authorities, and public opposition to nuclear power remains a significant hurdle.
The small modular reactor technology, although promising, has yet to be tested on a commercial scale. One previous attempt to develop this technology faced setbacks when NuScale lost its contract with a Utah utility due to unexpectedly high projected electricity costs.
Despite these challenges, Big Tech has substantial financial resources and increasing electricity demands, especially as AI technologies and data centers expand. According to forecasts, data centers could account for 9% of total U.S. electricity demand by 2030, up from just 3.5%. In the next five years, total electricity consumption in the U.S. could rise by as much as 15%, with nuclear energy likely filling the gap left by wind and solar.
The shift toward nuclear power could pose significant challenges for wind and solar energy sources, particularly regarding carbon credits. Currently, major tech companies are significant clients of firms generating electricity from renewable sources, which earn carbon credits. These credits can be sold to businesses looking to offset their emissions from hydrocarbon sources. Microsoft, Amazon, and Google are substantial consumers of these credits. However, if new nuclear reactors are built, the demand for carbon credits may decline sharply, impacting the revenue for wind and solar generators.
This revenue is crucial, especially as negative pricing from overproduction becomes more frequent. The rise of nuclear power, with its zero-emission status, could disrupt the lucrative carbon credit market.
While the transition to nuclear energy will take time and face challenges, the financial backing and urgent energy needs of Big Tech suggest that nuclear power may be poised for a significant resurgence. In the meantime, the demand for gas and even coal may continue to grow as data centers expand.
Related Topics:
- What is the Largest Nuclear Energy?
- Who First Discovered Nuclear Energy?
- How Does the Sun Release Nuclear Energy?