Competition for data centers is giving states another reason to pursue nuclear power development, with states looking to position themselves to host the next big nuclear deal.
Utility companies in recent weeks have announced deals with tech giants Amazon, Google and Microsoft for nuclear power, which offers the technology firms a relatively clean source of electricity as they ramp up the construction of data centers to allow the growth of artificial intelligence and cloud-computing applications.
The trend is expected to spur states to revisit nuclear power policies next year, as they look to the nuclear power sector and data centers to create jobs and to bolster tax revenue.
“States that have welcoming state policies are more likely to have these projects in their backyards and communities,” said Christine Csizmadia, with the Nuclear Energy Institute.
AI data centers consume a lot of electricity because training and delivering AI requires enormous computing power and data storage. According to Goldman Sachs, a ChatGPT query takes nearly 10 times as much electricity, on average, to process as a Google search. And the investment bank estimates that data-center power demand will grow 160% by 2030.
Microsoft made headlines for its deal that will reopen the Three Mile Island nuclear plant in Pennsylvania, which was the site of the nation’s worst commercial nuclear accident in 1979 and was shut down in recent years for economic reasons.
One of the announced deals is poised to spark competition among states. Google’s agreement with California-based Kairos Power to build seven small modular reactors to supply power to its data centers has yet to name a location for the reactors or the data centers. The 500 megawatts project, estimated to come online as soon as 2030, would generate roughly enough energy to power a midsize city.
“This agreement helps accelerate a new technology to meet energy needs cleanly and reliably, and unlock the full potential of AI for everyone,” Michael Terrell, senior director for energy and climate at Alphabet’s Google, said in a statement.
Small modular reactors are advanced nuclear reactors that have a power capacity of about one-third the generating capacity of traditional nuclear power reactors.
Their benefits include a smaller footprint that expands the number and types of areas they can be located; they can be prefabricated, shipped, and installed on-site, making them more affordable than large power reactors; and they can be deployed incrementally to match increasing energy demand.
Csizmadia cited Michigan, Tennessee, Virginia and Washington as states that have made policy changes in recent years to signal their ambition to develop nuclear power facilities to serve big tech companies. More states will likely act next year, if not sooner, in states still in session.
Michigan Rep. Graham Filler (R), who has helped lead the charge to make his state a hub for small modular reactors, agrees.
“States are going to have to create a pro-nuclear regulatory structure,” Filler said.
He and fellow lawmakers launched a bipartisan, bicameral nuclear power caucus last year, and he is helping to spearhead a package of nuclear bills that could still be considered this year. The legislature is in session until the end of the year.
“I’m gonna redouble in the lame duck in the next couple months,” Filler said.
The package includes legislation that would give a signing bonus to newly graduated nuclear engineers who commit to working at a Michigan power plant for three years.
Other bills would remove barriers for the construction of small modular reactors; establish a manufacturing tax credit aimed at incentivizing and supporting nuclear research and development; and establish and fund a competitive grant program to incentivize Michigan colleges and universities to teach nuclear- and hydrogen-related sciences.
In Tennessee, a nuclear advisory panel named last year by Gov. Bill Lee (R) is expected to release its recommendations to the governor at the end of October that will likely be fodder for legislation next year, according to Csizmadia.
The state, home to the Oak Ridge National Laboratory, announced in September that it would host a facility to enrich uranium that would be used as fuel for nuclear power plants.
Virginia enacted two bills this year that would allow two utilities in the state to build small modular reactors. One is for Dominion Energy, which announced last month it is working with Amazon to bring at least 300 megawatts of power to Virginia, where Dominion projects that power demands will increase by 85% over the next 15 years.
The other bill is for Appalachian Power Co. to develop a small modular reactor.
Washington State has also been at the forefront of enacting pro-nuclear policies. To that end, Energy Northwest and a consortium of Washington state utilities plan to build small modular reactors in southeast Washington. Those would power data centers in eastern Oregon and get around Oregon’s moratorium on new nuclear power.
The deal comes as the state included $25 million in its budget for Energy Northwest to put toward clean energy generation.
“That’s a really strong indication from the state that they want to see Energy Northwest move forward with us, with new nuclear,” Csizmadia said.