Analysis: US Nuclear Plants Won’t Immediately Fuel Big Tech’s AI Ambitions, According to Reuters

By Laila Kearney and Timothy Gardner

NEW YORK/WASHINGTON – Constellation Energy and Microsoft are working to restart the Three Mile Island nuclear plant, aiming to secure a quick and climate-friendly energy source to support their rapidly growing data centers for artificial intelligence (AI).

According to a recent analysis of data from the U.S. Energy Information Administration, U.S. power generation capacity could increase by about 2.4% to 2.7% by the end of the decade. Meanwhile, energy consumption from data centers is expected to more than double by 2030, accounting for around 9% of the nation’s total electricity use.

As tech companies race to meet the rising energy demands of data centers driven by generative AI, restarting the nuclear facility presents various obstacles. These include regulatory challenges, potential supply chain issues, local opposition, and scrutiny from water authorities concerned about the health of nearby water reservoirs.

In March 1979, the Three Mile Island plant captured global attention due to a partial meltdown of its Unit 2 reactor. The current reopening plan focuses on the Unit 1 reactor at the Pennsylvania facility, which operated safely for decades before its closure five years ago.

The proposed $1.6 billion plan aims to restart Unit 1 by 2028, with the goal of offsetting Microsoft’s power consumption for its regional data centers. This initiative follows a trend where technology firms and nuclear power providers collaborate; for example, Talen Energy recently agreed to sell a data center to another tech giant next to its operational nuclear plant in Pennsylvania.

Industry sources indicate that more nuclear contracts for data centers are in the pipeline, though each partnership presents unique challenges.

"Nobody has done this before," explained Kate Fowler, global nuclear energy leader for an energy insurance broker. "Challenges will inevitably arise."

Since the shutdown of Unit 1 in 2019, supply chain bottlenecks have emerged, particularly concerning enriched uranium following export restrictions linked to geopolitical conflicts. Moreover, obtaining licenses from the U.S. Nuclear Regulatory Commission (NRC) presents further hurdles, alongside negotiations with local communities wary of a repeat of the 1979 incident.

"The NRC is overwhelmed with license applications for various new reactor types, including high-tech modular plants," said Sola Talabi, a nuclear engineer and president of an energy risk consultancy. While recent legislation aims to streamline the NRC’s licensing process, the influx of new projects may strain the agency’s personnel and resources.

As Constellation pursues the necessary approvals, the public comment period could extend the timeline, including reconnecting the plant to the regional power grid, which may take years.

ADDITIONAL CHALLENGES

Regulatory review processes for restarting a fully decommissioned nuclear facility could take longer than expected. Despite the Talen plant’s operational status, the data center there faces federal-level challenges from utilities predicting increased transmission costs and potential power bill hikes. Talen disputes these predictions, asserting that the data center’s energy consumption would not adversely affect public electricity costs or reliability.

At Three Mile Island, reactivating dormant infrastructure presents its own difficulties, according to nuclear safety expert Edwin Lyman. "Constellation should prepare for complex and costly problems," he stated.

Additionally, modifications to surface and groundwater permits will be necessary. Any adjustments will undergo thorough review to assess their environmental sustainability and impact on other users, as noted by a spokesperson for the Susquehanna River Basin Commission.

Talabi believes that four years may be sufficient for Constellation to resolve any significant technical issues at the plant. However, sensitive components like steam generators and reactor vessels having been inactive for years could complicate the process.

Talabi also highlighted the critical need for effective community engagement to ensure societal acceptance of the plant’s restart, particularly in light of the 1979 accident. "A strong focus on addressing environmental and local concerns will be essential," he said.