As energy demand increases rapidly, technology companies are looking for innovative solutions to meet the demand created by artificial intelligence (AI) and other new technologies. In addition to solar and wind energy, several technology companies are investing in nuclear energy projects to power operations. The significant shift in public perception of nuclear power has brought the abundant clean energy source back to the forefront as an option, and U.S. nuclear energy capacity is expected to increase significantly in the coming decades.
According to the Wall Street Journal, about a third of U.S. nuclear power plants are in talks with technology companies to power data centers. Several major tech companies have already signed deals with nuclear power companies to provide the clean energy needed to run energy-intensive new technologies like AI.
Global electricity demand is expected to double by 2050 compared to 2020, 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 be a major contributor to this increase in demand. John Ketchum, CEO of US energy company NextEra Energy, recently stated that the need for renewable energy is likely to triple in the next seven years, which coincides with the increasing use of AI.
Several technology companies are racing to develop larger and more powerful AI models for their users. But larger models require more power, which could hinder their adoption if energy companies are unable to provide the clean electricity needed to run massive data centers in the coming years. In April, Ami Badani, chief marketing officer at chip design company Arm, said data centers currently account for about 2 percent of global energy consumption. However, as AI technology grows, Badani expects the technology industry’s energy consumption could account for about a quarter of total U.S. electricity consumption by 2030. Badani emphasized, “ChatGPT requires 15 times more energy than a traditional web search.”
Tech companies have invested heavily in wind and solar energy to power their data centers and are now looking for alternative, clean power sources. In 2021, OpenAI CEO Sam Altman invested $375 in nuclear fusion startup Helion Energy. Last year, Microsoft signed a deal to buy power from Helion starting in 2028. Altman is also chairman of nuclear fission company Oklo. Oklo plans to build a vast network of small nuclear reactors in rural southeastern Idaho to power data centers as electricity demand increases. It also plans to build two commercial plants in southern Ohio.
However, getting some of these nuclear projects off the ground is not easy. Oklo has struggled to get support from nuclear regulators. In 2022, the Federal Nuclear Regulatory Commission (FERC), which oversees commercial nuclear power plants, rejected the company’s application to plan its Idaho Aurora project, saying it had not provided enough safety information.
Jacob DeWitte, CEO and co-founder of Oklo, explained: “There are new laws of physics, you have to use new models. You have to do all kinds of things differently than what you’re used to.” DeWitte said Oklo is currently working with regulators to get the information it needs for approval. If approved, the project would cover 12,000 square feet and include a 15-MW nuclear fission reactor.
In addition to regulatory red tape, many utilities are opposing new nuclear projects because of the expected impact on the grid. Some data centers require 1 GW or more of power, which is about the total capacity of a nuclear reactor in the U.S. PJM Interconnection, the largest grid operator in the U.S., recently warned that power supply and demand will become tighter as new generation development lags behind demand. However, some technology companies are proposing connecting data centers directly to nuclear plants (also known as co-location) to reduce strain on the grid.
However, several U.S. utilities oppose co-location 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 for the direct sale of power from the plant to the AWS data center, but utilities including American Electric Power and Exelon have filed complaints with FERC against that arrangement. Utilities fear that more agreements of this kind will result in less clean energy available to power the grid as U.S. electricity demand increases. The complaint to FERC states, “This will harm existing customers.”
As energy demand for the data centers needed to run innovative new technologies rapidly increases, technology companies are investing heavily in nuclear power companies to provide clean energy. However, regulatory restrictions and resistance from utilities are limiting the development of new projects. FERC will play a significant role in the future of nuclear power in the U.S. and could ultimately determine whether or not technology companies get access to clean nuclear power for their data centers.
By Felicity Bradstock for Oilprice.com
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