Nuclear industry strains to meet demands of power-hungry data

As the number of data centres being built increases rapidly — raising questions about meeting their growing electricity needs — the nuclear energy industry has spied an opportunity.

Nuclear energy advocates believe that a new generation of advanced reactors could provide a solution to the strain being placed on the grid as traditional data centres are joined by new, power-thirsty artificial intelligence and crypto mining facilities.

“We’ve gone from just wanting them to store data . . . to things that are almost at the most extreme end of computer performance,” says Michael Bluck, head of the Centre for Nuclear Engineering at Imperial College in London.

“These CPU [central processing unit] centres have enormous demands on electricity. And, for many applications, they want to be always on — an outage is a catastrophic loss of money . . . where nuclear comes in is it provides [dependable] baseload supply.” 

As policymakers and corporate leaders scramble to find ways to satisfy those demands, the nuclear energy industry — shunned in many parts of the world because of safety concerns and cost overruns on traditional reactors — has pitched its next-generation technology as the solution. 

So-called small modular reactors (SMRs), and even smaller microreactors, are being designed to be produced quickly, cheaply, and at scale. Like their larger predecessors, and in contrast to renewables, they can provide power 24-7, whatever the weather. And, unlike fossil fuel-generated power, they do not emit carbon dioxide. 

“We see that potential partners in the data centre space need reliable power,” says Caroline Cochran, co-founder and chief operating officer of Oklo, a nuclear start-up backed by OpenAI chief Sam Altman. “They would like that power to be clean — and there just aren’t many opportunities for them to buy reliable clean power at scale.” She points out that power is critical to the growth of these centres, and their power needs are “exploding” — even before additional AI consumption is taken into account.

According to the International Energy Agency, global power demand from data centres could surpass 1,000 terawatt hours by 2026. That would be more than double 2022 levels — an increase equivalent to Germany’s total power demand in the space of four years. 

Such an expansion will place increasing strain on the grid. In the US, home to about a third of the world’s data centres today, the sector’s proportion of total national power demand is likely to rise from about 4 per cent to 6 per cent by 2026. In Ireland — the European destination of choice for many multinational tech companies — it is set to rise from 17 per cent to 32 per cent. 

In January, Microsoft — one of the world’s biggest data centre owners, alongside Google and Amazon — hired its first director of nuclear technologies, Archana “Archie” Manoharan, with a brief that includes “maturing and implementing a global small modular reactor and microreactor energy strategy”.

But, while data centres’ power demand is already booming, the earliest SMR developments are not set to be commercialised until the end of the decade. NuScale — the first US SMR developer to receive design approval from the Nuclear Regulatory Commission — hit a setback in November when surging costs forced it to abandon plans for what would have been the country’s first commercial SMR installation. 

“You’re going to see the industry trying to find ways to use nuclear — it’s just the timing is going to be hellacious,” says Tony Grayson, general manager at Compass Datacenters, a data centre developer. “We thought SMRs would be the saviour of us all but, in reality, they are suffering the same problems that the nuclear industry did [before].”

For now, the industry is focusing on more close-at-hand atomic energy solutions, including striking deals to use existing nuclear plants to power data centres. Amazon’s AWS revealed in March that it had paid $650mn for a data centre campus connected to Talen Energy’s Susquehanna nuclear plant in Pennsylvania.

In Virginia — home to the biggest concentration of data centres in the world — Green Energy Partners has made a similar move, buying 640 acres next to Dominion’s Surry nuclear plant. It aims to construct up to 30 data centres and also has plans to build half a dozen SMRs. 

“People are trying to talk about how to combine the current nuclear fleet with data centres,” says Christopher Lohse, innovation and technology manager at the US Department of Energy’s Gateway for Accelerated Innovation in Nuclear. “[But] is nuclear going to solve the near-term need for load growth? If you want to do it tomorrow, the answer is probably no.” He believes it will take much longer to develop the advanced reactors being touted as longer-term solutions.

However, experts believe that data centres could act as the testing grounds for SMRs, given Big Tech companies are among the few with sufficient capital to invest in the first iterations needed to get the reactors off the ground.

“It might be that the first application of an SMR is in a data centre and it almost helps SMRs get going,” explains Bluck at Imperial. “For these people with the very deep cash pockets, this isn’t such a big deal.”