Analysis – US nuclear plants won’t fuel Big Tech’s AI ambitions right away By Reuters

By Laila Kearney and Timothy Gardner

NEW YORK/WASHINGTON (Reuters) – Constellation Energy and Microsoft (NASDAQ: ) plan to restart the Three Mile Island nuclear power plant, hoping they have secured a quick source of enough green energy to power rapidly expanding data centers for artificial intelligence ( AI) ).

U.S. power generation capacity by the end of the decade could grow by about 2.4 percent to 2.7 percent, according to an analysis of the latest available U.S. Energy Information Administration (EIA) data from late 2022. Data center energy 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 power demand from data centers to powering AI. But going nuclear involves regulatory hurdles, possible supply chain difficulties, sometimes strong local opposition, and scrutiny from water authorities concerned about healthy reservoirs.

In March 1979, Three Mile Island made world headlines with a partial meltdown of its Unit 2 reactor. The reopening plan covers the Unit 1 reactor at the Pennsylvania plant, which operated safely for decades before it was shut down five years ago .

The $1.6 billion plan would restart Unit 1 by 2028 to offset the power consumption of Microsoft’s data center in the region. It is the latest deal between a technology company and a nuclear power supplier. In March, Talen Energy agreed to sell a data center to Amazon.com (NASDAQ: ) near Talen’s nuclear power plant, which operates elsewhere in Pennsylvania.

More nuclear contracts for data centers are in the works, energy industry sources say. But each nuclear-tech deal is unique and comes with its own challenges.

“No one has done this before,” Kate Fowler, global leader of nuclear power for energy insurance broker and risk adviser Marsh, said of the Three Mile Island restart attempt. “Challenges will arise.”

Supply chain bottlenecks have occurred since Three Mile Island closed its Unit 1 in 2019, Fowler said. For example, Washington imposed restrictions on enriched uranium following Russia’s full-scale invasion of Ukraine in 2022.

Obtaining licenses from the US Nuclear Regulatory Commission will also be a challenge, as will negotiations with local opponents who remember the partial crisis of 1979.

“The NRC currently has a full plate,” said Sola Talabi, a nuclear engineer and president of energy risk consultancy Pittsburgh Technical, noting license applications for various types of reactors that the agency had never considered until now including high-tech modular plants and other decommissioned reactors in Michigan.

Even though President Joe Biden recently signed legislation to streamline the NRC’s licensing process, considering the list of new projects within the timelines set by the companies will challenge the NRC’s staff 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 take years to reconnect the project to the regional grid.

OTHER OBSTACLES

Regulators may go through longer review processes to restart a fully shuttered nuclear plant, risk and energy experts said.

Even if the Talen plant is operating, Amazon’s data center there is facing federal challenges from two regulated utilities that say it could increase transmission costs, which would raise energy bills. Talen disputes the prediction that the public would face higher energy bills or reliability issues from the data center, which could consume enough electricity to power all the homes in New Mexico.

At Three Mile Island, resuming use of equipment and infrastructure that has been dormant for five years could be difficult, said Edwin Lyman, a nuclear security expert at the Union of Concerned Scientists.

“Constellation should expect to encounter issues that will be costly and time-consuming to resolve,” Lyman said.

Three Mile Island will also require amended surface and groundwater permits, said Stacey Hanrahan, spokeswoman for the Susquehanna River Basin Commission.

“Any change request will be thoroughly reviewed and the project’s expected water requirements will be evaluated for sustainability and potential adverse impacts on the environment and other users,” Hanrahan said.

Talabi said four years is enough time for Constellation to resolve any technical problems at Three Mile Island, which could be substantial when sensitive components such as steam generators and reactor vessels have been shut down for years.

Talabi also emphasized the importance of managing environmental and community concerns that may arise around the site, especially in light of the 1979 accident.

“Probably more than anywhere else in the country, the need for community engagement to make sure we have societal buy-in will be critical to the restart,” Talabi said.