Energy
Tuesday, August 13th, 2024 2:51 pm EDT
Key Points
- Direct Connection of Data Centers to Nuclear Plants: Tech companies are increasingly pursuing direct connections between their data centers and nuclear power plants to secure clean energy for their high-power demands, which are crucial for advancements in artificial intelligence.
- Controversy and Resistance: The strategy faces resistance from utilities and regulators, highlighted by the dispute over Amazon Web Services’ purchase of a data center powered by a nuclear plant, with concerns about the impact on grid power availability and fairness to existing customers.
- Energy Supply Challenges and Opportunities: As global demand for energy slows and traditional power sources like coal are phased out, there is growing interest in co-locating data centers with nuclear plants. This approach is seen as a way to address tightening power supplies and meet the rising energy needs of data centers.
Tech companies are increasingly pursuing direct connections between their data centers and nuclear power plants to meet their growing demand for clean energy. Data centers, which are vital for managing the vast amount of data generated by the internet, often require power levels comparable to that produced by a nuclear reactor. This demand has intensified as the U.S. aims to advance in artificial intelligence, sparking interest in nuclear energy as a stable and zero-emission power source. Constellation Energy, which operates the largest fleet of nuclear reactors in the U.S., and Vistra Corp are among the companies seeing significant stock gains due to their nuclear assets’ potential to support data centers. However, the approach of co-locating data centers with nuclear plants, known as “co-location,” is controversial.
The International Energy Agency (IEA) and OPEC have both highlighted a slowdown in global energy demand, particularly from China, and predicted a potential surplus in crude oil by 2025 despite OPEC’s production cuts. This backdrop of tightening power supplies, driven by the retirement of coal plants and increased demand from domestic manufacturing and electric vehicles, underscores the urgency for secure energy sources like nuclear power.
The co-location strategy is facing resistance from utilities and regulators. Amazon Web Services (AWS) recently purchased a data center from Talen Energy, which is powered by the Susquehanna nuclear plant in Pennsylvania. This agreement has encountered opposition from utilities American Electric Power (AEP) and Exelon, who argue that such direct agreements could diminish the availability of power on the grid and unfairly impact existing customers. Talen Energy has countered that these objections are hindering innovation and meeting new energy demands.
The Federal Energy Regulatory Commission (FERC) is reviewing the implications of such agreements and plans to hold a conference to discuss the impact of directly connecting large electricity loads to power plants. Meanwhile, other energy companies, including Constellation and Vistra, support the AWS-Talen deal and are exploring similar co-location opportunities. They argue that combining direct power connections with traditional grid systems is essential to meet the rising energy needs of data centers.
As the debate continues, there is growing interest from tech companies in co-locating data centers with nuclear facilities across the U.S. States like Texas and Connecticut are seen as potential locations for such developments. However, there are concerns about balancing the power needs of data centers with those of general consumers. Holtec International’s president, Kelly Trice, emphasizes the need for careful management to ensure that consumer needs are also considered as the U.S. navigates this evolving energy landscape.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/08/10/why-tech-companies-are-shopping-for-nuclear-power-for-data-centers.html
