When it comes to finding sources of clean, firm energy to power their AI activities, the world’s largest tech companies have been trying a little bit of everything: advanced geothermal, long-duration energy storage, and even green hydrogen.
None of those emerging tech plays so far however comes close to the scale of the massive deal Microsoft signed today: a $16-billion plan to restart a nuclear reactor at the notorious Three Mile Island in Pennsylvania.
Under its 20 year power purchase agreement with Constellation, Microsoft will purchase approximately 835 megawatts of carbon-free energy to match the power its data centers consume in the PJM region. Microsoft’s cash will help extend plant operations to at least 2054.
Three Mile Island is, of course, infamous for the 1979 accident in which one of the plant’s reactors partially melted down; the incident was the most serious commercial nuclear failure in U.S. history, and is often blamed for the negative shift in the public’s attitude toward nuclear power, which was once highly popular.
Microsoft’s deal will revive the island’s other reactor, Unit 1, which began operations in 1974 and though adjacent to the unit that melted down, is a fully independent facility.
It shut down officially in 2019, five years ago to the day from the Microsoft-Constellation announcement that it would be brought back online by 2028.
Microsoft’s massive deal is the first of its kind, but — if all goes well — the deal could open the door for something of a nuclear renaissance. Three Mile Island, while the most well-known, is far from the only shuttered power plant for tech companies to invest in. There are dozens of closed reactors around the country, largely built through the second half of the last century, that could provide hundreds of megawatts, if not gigawatts, of yet-untapped clean energy capacity.
And while it’s very early days, nuclear enthusiasts are already speculating that the Microsoft deal may even open the door for the construction of new reactors as well; as one energy consultant wrote on X, “we now have a market for newbuild.”
The hunt for clean firm
The deal comes in light of Microsoft’s struggle in the last year to keep pace with its emissions and climate goals. The company has pledged to become carbon-negative in the next decade, and by 2050 to remove historical emissions. But in May, Microsoft admitted that its emissions had actually increased by nearly 30% since 2020, a rise it attributed to “growth in our data centers’ electricity usage.”
Microsoft isn’t alone in struggling to power its AI ambitions cleanly. Google said in July that its own emissions increased by 13% last year alone, and nearly 50% since 2019. And given the trajectory they and their peers are on, without some kind of firm baseload generation breakthrough, the backslide is likely to continue.
As a result of the demand surge, some sector experts anticipated that large-scale nuclear would be poised for a comeback.
For instance, Jacopo Buongiorno, the director of MIT’s Center for Advanced Nuclear Energy Systems, told Latitude Media that there’s a shift in attitude underway, driven in part by a new class of customers like data centers and clean manufacturing facilities that are ready to pay more for clean firm power — and are increasingly eyeing closed nuclear plants as potential sources of that power.
Bringing shuttered reactors back online won’t come cheap, though. Getting Three Mile Island’s Unit 1 prepped for restart, for example, will require “significant investments” to the reactors’ turbine, generator, main power transformer, and cooling and control systems, Constellation said. (In other words, even the process of getting it ready for review by the U.S. Nuclear Regulatory Commission could cost another couple billion dollars.)
But high up-front costs likely aren’t a barrier for the generally price-insensitive data center industry. The question for now, though, is whether their deep pockets will be enough to overcome the various regulatory and economic barriers that have stunted the industry’s growth to date.
