Big tech’s bet on nuclear power a bold climate strategy or a risky gamble?

Big tech companies including Microsoft, Meta, Google, and Amazon are exploring nuclear energy in response to rising electricity demand of data centres and getting climate targets back on track as they race to develop and deploy new generative AI models.

The data center power consumption in the US is projected to triple by 2030, requiring an estimated 47 gigawatts (GW) of additional generation capacity, according to Goldman Sachs.  

Earlier this month, Meta Platforms announced that it is seeking proposals from nuclear energy companies to address its AI-driven power requirements and meet its environmental goals. Meta said it plans to add 1 to 4 gigawatts of nuclear generation capacity in the US and aim to start it in the early 2030. A typical US nuclear plant has a capacity of 1 gigawatt.

Meta said that it is actively working to enhance the reliability of the energy grid by integrating clean energy sources including solar, wind, geothermal, and battery storage to meet its data centre energy needs.

Given the significant capital investment, lengthy timelines, and stringent regulatory requirements associated with nuclear energy projects, Meta stressed on the need for early project engagement and comprehensive operational planning.

In September, Microsoft partnered with Constellation Energy to restart a unit at Three Mile Island plant in Pennsylvania, while in March Amazon acquired a nuclear-powered data center from Talen Energy.

A month later, Google also announced an agreement to purchase nuclear energy from multiple small modular reactors (SMRs) to be developed by Kairos Power. The company’s initial goal is to get the first SMR up and running by 2030, followed by additional reactor deployments by 2035. Google is hoping to generate up to 500 MW of carbon-free power.

Due to its smaller size and modular design, SMRs can be constructed in less time and deployed in multiple locations.

“This agreement helps accelerate a new technology to meet energy needs cleanly and reliably, and unlock the full potential of AI for everyone,” said Michael Terrell, senior director, Energy and Climate at Google.

The energy industry is also considering plans to transform decommissioned coal plants into nuclear power plants. This would speed up deployment, cut construction costs by using existing infrastructure, and mitigate economic losses in coal-dependent communities. According to a US Department of Energy (DOE) study, 36 US states have such coal sites for 128-174 GW of nuclear capacity plants, which can potentially save up to 35% on construction costs.

Though tech companies are not the biggest power consumers, their  energy consumption is growing rapidly, especially with the rising demand for data processing and AI capabilities.

This has also heightened fears of missing their self-imposed climate goals, which could lead to public backlash and stricter regulatory oversight.  

In 2020, Amazon pledged to reach net zero by 2040, while Meta and Google have committed to reaching net zero emissions across its value chain by 2030. Microsoft has pledged to become carbon negative by 2030, which is more challenging as it aims to remove more carbon emissions from the atmosphere than they emit. Net zero emissions aims to balance their carbon emissions with removals.

However, meeting this growing demand with nuclear power has its own sets of challenges. Energy companies are facing potential uranium fuel supply hurdles and opposition from the local population and environmentalists. The US Nuclear Regulatory Commission, which regulates the sector, has been criticized for being too close to the industry while also facing a severe staff shortage that is affecting its ability to regulate.

MV Ramana, a professor at the School of Public Policy and Global Affairs (SPPGA),  University of British Columbia, believes that big tech is only riding the nuclear bandwagon to negate the backlash over the growing energy demands of data centres and the resulting carbon emissions.

Ramana warned that the nuclear industry and wealthy corporations have a vested interest in promoting nuclear energy.

Despite the devastating accidents at Chernobyl in 1986 and more recently at Fukushima in 2011, and the ongoing challenge of safely disposing of nuclear waste, the industry continues to use its influence to convince the public that nuclear power is environmentally friendly, noted Ramana in a column on Counterpunch, an online magazine.

The global share of nuclear energy in total electricity production has declined from 17.5% in 1996 to 9.15% in 2023 due to high production costs and construction delays, according to World Nuclear Industry Status Report 2024.

Given the historical delays in nuclear project timelines, Ramana believes that it is unlikely that these tech companies will meet their self-imposed targets. He also warned that small modular nuclear reactors that Google and Amazon are counting on have been tried and tested before in several countries including the US and Germany. Each of these small reactors have suffered multiple failures and shutdowns.  

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