As tech companies ramp up their energy needs to support the booming artificial intelligence (AI) industry, they are increasingly turning to nuclear power. This shift could strain the power grid and impact ordinary American ratepayers, according to a report by The Wall Street Journal.
Approximately one-third of U.S. nuclear plants are in negotiations to sell nuclear-generated electricity directly to tech firms for their power-intensive data centers. This trend, driven by companies like Amazon Web Services (AWS), could divert reliable energy from the grid. For instance, AWS is close to a deal with Constellation Energy to buy power from an East Coast nuclear plant. Earlier this year, AWS invested $650 million in a nuclear-powered data center in Pennsylvania, which could power hundreds of thousands of homes.
As data centers may consume up to 9% of all U.S. electricity by 2030, some officials, like Pennsylvania Consumer Advocate Patrick Cicero, worry this shift could raise prices and limit reliable, carbon-free power for everyday consumers. Cicero expressed concerns about “massive consumers of energy” securing priority access to nuclear power.
If tech companies opt to offset their energy use with green energy projects, this could paradoxically increase reliance on natural gas, which is more dependable than intermittent sources like wind and solar. This shift could complicate emission reduction targets in states hosting new data centers.
An Amazon spokesperson mentioned exploring various clean energy sources to supplement wind and solar projects. However, building new natural gas plants is becoming challenging due to stringent emissions rules from President Biden’s Environmental Protection Agency (EPA), which mandate costly carbon capture technology.
The tech sector’s interest in nuclear energy comes amid serious concerns about U.S. grid reliability. Policymakers, especially Democrats, are pushing for retiring fossil fuel-fired plants, which combined with rising electricity demand, could lead to a power crisis. Federal Energy Regulatory Commission (FERC) Commissioner Mark Christie warned of “catastrophic consequences” if this trend continues. The North American Electric Reliability Corporation (NERC) has also highlighted elevated risks of power shortages during extreme weather.
