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

NRC ASA

25/09/2024 04:17

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      Resurrecting Three Mile Island will take years
    

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      Nuclear revival faces regulatory hurdles, local opponents
    

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      Potential uranium supply obstacle looms
    

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      Regulators' busy workload may delay permitting   
    

  
 (Rewrites throughout, adds data center power demand growth and
generation capacity estimates in paragraph 6)
    By Laila Kearney and Timothy Gardner
       NEW YORK/WASHINGTON Sept 24 (Reuters) - A plan by
Microsoft  MSFT.O  to use the restart of a Three Mile Island
nuclear reactor to help power its expanding data centers
reflects the tech industry's hopes nuclear energy can be a quick
and climate-friendly answer to its massive electricity needs.
    But it will be tough to swiftly meet soaring power demand
from the data centers behind artificial intelligence with new or
resurrected nuclear reactors, as companies will face high
regulatory hurdles, potential fuel supply obstacles, and
sometimes stiff local and environmental opposition.
    Microsoft and Constellation Energy  CEG.O  announced a deal
to restart a unit at the plant in Pennsylvania on Friday, in
what would be the first-ever restart for a data center. 
    At the announcement, Constellation’s CEO Joe Dominguez
called nuclear power the only energy source available that is
both climate-friendly and reliable enough to support Big Tech’s
needs, implying weather-dependent wind and solar energy may not
be up to the task. 
    The announcement follows a similar agreement in March in
which Amazon.com  AMZN.O  purchased a nuclear-powered datacenter
from Talen Energy  TLN.O , and other nuclear contracts for data
centers are in the works, power industry sources say.
    The needs these deals aim to fill are huge. 
        U.S. data center power use is expected to roughly triple
between 2023 and 2030 and will require about 47 gigawatts of new
generation capacity, according to Goldman Sachs estimates, which
assumed natural gas, wind and solar would fill the gap.
    Climate conscious investors and regulators are keen to
ensure this spike does not trigger a huge rise in greenhouse gas
emissions.
    For Microsoft and Constellation, at least, the deal is
likely to be challenging to bring to fruition.
    "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."
    The Three Mile Island plant made global headlines in 1979
with a partial meltdown at its Unit 2 reactor, the worst nuclear
incident in US history. 
    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. 
    But key permits for the plant's new life have not yet been
filed, regulators say.
    Getting them could be hard, especially against local
opponents who remember the 1979 partial meltdown.
    Resuming the use of equipment and infrastructure that has
been dormant for five years could also 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.
    
    OTHER HURDLES
    There are broader issues that could affect any number of
other attempted tech-nuclear link ups in the U.S.
    For instance, Washington slapped restrictions on enriched
uranium imports following Russia's 2022 full-scale invasion of
Ukraine.
    Securing licenses from the U.S. Nuclear Regulatory
Commission could also be tricky for any nuclear project.
    "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 the restart of
another decommissioned reactor.
    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.
    For the Talen project, pocketbook issues have become a
problem. Even though the 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.
    In general, simply purchasing power from nuclear plants to
run data centers just means diverting it away from other
consumers, creating competition for supplies on the grid that
could potentially drive up power bills.
    In the meantime, the Three Mile Island project is posing a
major test of public appetite for expanded nuclear power.
    Talabi said four years is likely 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.
    But he emphasized the importance of handling environmental
and community concerns that may arise around the site.
    "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 and Sonali Paul)
 ((Laila.kearney@thomsonreuters.com; (917) 809-0054;))