Tech Giants Eye Nuclear Power

Major tech companies are targeting America's nuclear power plants to meet the growing electricity demands of new data centers driven by an artificial intelligence boom. Currently, about a third of U.S. nuclear plants are in talks with tech firms to supply this energy.

Amazon Web Services is nearing a deal with Constellation Energy to receive power directly from a nuclear plant on the East Coast. Earlier this year, Amazon purchased a nuclear-powered data center in Pennsylvania for $650 million. These deals could divert stable power from the grid, raising concerns about reliability and cost as AI, manufacturing, and transportation increase electricity demands.

Nuclear-powered data centers would provide tech companies with 24/7 carbon-free power, speeding up the creation of necessary data centers for the AI race. However, diverting existing power resources instead of creating new green energy could increase costs for other customers and hinder emission reduction goals.

Despite tech companies potentially funding renewable energy to offset their nuclear deals, experts warn that the likely outcome is increased reliance on natural gas, which produces carbon emissions but offers round-the-clock power. This nuclear-tech collaboration is causing tensions over economic development, grid reliability, costs, and climate objectives in several states.

Amazon's Pennsylvania deal, which provides up to 960 megawatts of electricity, sparked concerns about giving tech companies priority access to energy. This has led to debates over the regulatory authority to intervene in such agreements.

Vistra, the largest competitive power generator in the U.S., and Constellation Energy, which owns 14 U.S. nuclear plants, have both seen significant stock increases this year due to the new interest in nuclear power from tech companies.

However, it remains unclear how much power data centers will require. The Electric Power Research Institute estimates data centers could consume between 4.6% and 9% of U.S. power by 2030. Some states, like Connecticut, are grappling with the implications of removing carbon-free resources from the grid without clear plans for replacement.

Many negotiations are taking place within the PJM Interconnection, a regional transmission organization serving multiple states. There are ongoing efforts to ensure reliability and avoid issues as tech companies seek direct power from plants.

As the AI race continues, the demand for reliable, carbon-free energy grows. The collaboration between tech giants and nuclear power could reshape the energy landscape, but it also raises significant questions about the future of energy distribution and sustainability.