Analysis: US nuclear plants won't power up Big Tech's AI ambitions right away

NRC ASA

24/09/2024 11:00

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      Resurrecting Three Mile Island could take awhile
    

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      Local opponents hold memories of 1979 incident
    

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      NRC busy with nuclear power permit requests 
    

  
    By Laila Kearney and Timothy Gardner
       NEW YORK/WASHINGTON Sept 24 (Reuters) - 
    Constellation Energy  CEG.O  and Microsoft  MSFT.O  plan to
restart the Three Mile Island nuclear plant, hoping they have
scored a quick source of enough climate-friendly energy to power
rapidly expanding data centers for artificial intelligence (AI).
  
    U.S. power generation capacity through the end of the decade
could rise by about 2.4% to 2.7%, according to an analysis of
the most recent available U.S. Energy Information Administration
(EIA) data, from late 2022. Data center power use is expected to
more than double by 2030 to consume about 9% of all the
country's electricity.
    Tech companies are scrambling to meet a surge in energy
demand from data centers to power generative AI. But tapping the
nuclear system involves regulatory hurdles, possible
supply-chain snags, sometimes stiff local opposition and
scrutiny from water authorities concerned about healthy
reservoirs. 
        In March, 1979, Three Mile Island made global headlines
with a partial meltdown at its Unit 2 reactor. The reopening
plan covers the Unit 1 reactor at the Pennsylvania plant, which
operated safely for decades before being closed five years ago. 
    The $1.6-billion plan would restart Unit 1 by 2028 to offset
Microsoft's data-center power consumption in the region. It is
the latest deal between a technology company and a nuclear-power
provider. In March, Talen Energy  TLN.O  agreed to sell a data
center to Amazon.com  AMZN.O  next to Talen's nuclear plant,
which operates elsewhere in Pennsylvania.
    More nuclear contracts for data centers are in the works,
power industry sources say. But each tech-nuclear deal is unique
and comes with its own challenges.
    "Nobody has done this before," said Kate Fowler, global
nuclear energy leader for Marsh, an energy insurance broker and
risk advisor, about Three Mile Island's attempted restart.
"There's going to be challenges that pop up."
    Supply-chain bottlenecks have cropped up since Three Mile
Island shut its Unit 1 in 2019, Fowler said. For instance,
Washington slapped restrictions on enriched uranium following
Russia's 2022 full-scale invasion of Ukraine.  
        Securing licenses from the U.S. Nuclear Regulatory
Commission will also be challenging, as will negotiating with
local opponents, who remember the 1979 partial meltdown.
  
    "The NRC currently really has a full plate," said Sola
Talabi, a nuclear engineer and president of energy risk
consultancy Pittsburgh Technical, noting license applications
for different types of reactors the agency has never considered
before, including high-tech modular plants and another
decommissioned reactor in Michigan. 
    Even though President Joe Biden recently signed legislation
to streamline the NRC's licensing process, consideration of the
queue of new projects by the timelines laid out by companies
will challenge NRC personnel and technical resources, Talabi
said.
    While Constellation seeks NRC operating approvals for Three
Mile Island, the public comment period could prolong the
processes. It could also take years to reconnect the project to
the regional grid. 
    
    OTHER HURDLES
    Regulators may follow lengthier review processes to restart
a fully shut nuclear plant, risk and energy experts said. 
    Even though the Talen plant is operating, Amazon's data
center there faces challenges on the federal level from two
regulated utilities who predict it could increase transmission
costs that would raise power bills. Talen disputes the
prediction that the public would face higher power bills or
reliability problems from the data center, which could consume
enough electricity to power all the homes in New Mexico.
    At Three Mile Island, resuming the use of equipment and
infrastructure that has been dormant for five years could be
tricky, said Edwin Lyman, a nuclear safety expert at the Union
of Concerned Scientists. 
    "Constellation should expect to encounter problems that will
be costly and time-consuming to fix," Lyman said. 
     Three Mile Island also will require modified surface and
groundwater permits, said Stacey Hanrahan, a spokesperson for
the Susquehanna River Basin Commission.
    "Any modification request will be thoroughly reviewed, and
the project's expected water demands will be evaluated for
sustainability and potential adverse impacts to the environment
and other users," Hanrahan said.
    Talabi said four years is enough for Constellation to
address any technical issues at Three Mile Island, which could
be substantial when sensitive components such as steam
generators and reactor vessels have been closed for years.
    Talabi also emphasized the importance of handling
environmental and community concerns that may arise around the
site, particularly given the 1979 accident.
    "Probably more than anywhere else in the country, the need
for community engagement to ensure that we have societal
acceptance is going to be critical for restart," Talabi said.

 (Reporting by Laila Kearney and Timothy Gardner; Editing by
David Gregorio)
 ((Laila.kearney@thomsonreuters.com; (917) 809-0054;))