A sign is seen at the Microsoft headquarters on July 3, 2024 in Redmond, Washington. Photo: AFP
Pennsylvania’s dormant Three Mile Island nuclear plant, in the US, would be brought back to life to feed the voracious energy needs of Microsoft under an unprecedented deal announced Friday in which the tech giant would buy 100% of its power for 20 years.
The restart of Three Mile Island, the site of the worst nuclear accident in US history, would mark a bold advance in the tech industry’s quest to find enough electric power to support its boom in artificial intelligence.
The plant, which Pennsylvanians thought had closed for good in 2019 amid financial strain, would come back online by 2028 under the agreement, according to plant owner Constellation Energy.
If approved by regulators, Three Mile Island would provide Microsoft with the energy equivalent it takes to power 800 000 homes, or 835 megawatts. Never before has a US nuclear plant come back into service after being decommissioned, and never before has all of a single commercial nuclear power plant’s output been allocated to a single customer.
But the economics of both the power and computing industries are changing rapidly. Tech companies are scouring the nation for power that is both reliable and helps them meet their pledge to fuel AI development with zero-emissions electricity - driving a nuclear power revival.
“The energy industry cannot be the reason China or Russia beats us in AI,” said Joseph Dominguez, the CEO of Constellation. “This plant never should have been allowed to shut down. ... It will produce as much clean energy as all of the renewables [wind and solar] built in Pennsylvania over the last 30 years.”
The four-year restart plan would cost Constellation about $1.6 billion (R17bn), he said, and is dependent on federal subsidies in the form of tax breaks earmarked for nuclear power in the 2022 Inflation Reduction Act.
Constellation will also need to clear steep regulatory hurdles, including intensive safety inspections from the federal Nuclear Regulatory Commission, which has never before authorised the reopening of a plant. The deal also raises thorny questions about the federal tax breaks, as the energy from the plant would all be produced for a single private company rather than a utility serving entire communities.
A partial reactor meltdown at Three Mile Island in 1979 sent the nation into a panic and the nuclear industry reeling. The unit that Constellation plans to fire back sits adjacent to the one that malfunctioned 45 years ago.
Constellation and Microsoft conceived the novel deal to solve a deepening energy problem. The sprawling data centres Microsoft and other digital giants need have become so big and energy intensive that they are straining existing power supplies across the nation.
Constellation declined to provide details about its contract with Microsoft or disclose the value of the tax credits.
“Microsoft says it will buy all of the nuclear electricity from Three Mile Island but it wants rate and taxpayers to pick up the tab to refurbish the plant,” said Henry Sokolski, a former deputy for non-proliferation policy at the Pentagon.
Sasha Luccioni, the top climate executive at sustainable AI start-up Hugging Face, said that while nuclear power could be part of the solution to tech company emissions, the acquisition of so much energy by one company underscored how insatiable the power appetite of AI had become.
“It doesn’t address the core issues that are making the current practice of AI unsustainable by definition,” she said of the deal. “Instead of monopolizing decommissioned nuclear power plants, we should be focusing on integrating sustainability into AI.”
Officials in the nuclear industry offered a different view of the deal. They argue nuclear is a sensible, zero-emissions solution for alleviating the strain data centres are putting on the power grid.
“Microsoft saw that value and grabbed it to ensure they have the power needed to drive their business,” said Robert Coward, a former president of the American Nuclear Society. “I would expect additional similar agreements ... in the coming months and years.”
The announcement of the Microsoft deal follows an agreement Amazon reached with Talen Energy to purchase power produced by the financially troubled Susquehanna nuclear plant, for a planned data centre campus in Pennsylvania. That arrangement is running into snags with regulators, as regional utilities express concern that their ratepayers will be saddled with the bill for the power grid updates needed.
Amazon’s plan also raised concerns among clean-energy advocates that tech companies were shifting from driving the transition to clean energy to elbowing others out of it by claiming such large amounts of available clean electricity for themselves.
Dominguez argues that the Three Mile Island case is an example of how Silicon Valley’s outside-the-box thinking will help stabilise the power grid for everyone.
“This agreement is a major milestone in Microsoft’s efforts to help decarbonise the grid in support of our commitment to become carbon negative,” said a statement from Bobby Hollis, vice president of energy at Microsoft.
The huge cost and regulatory headaches associated with nuclear power are not deterring the tech industry from betting on it. In a remarkable turn of fortune for an industry that just a few years ago was struggling to stay competitive and focused mostly on closing plants, it now finds itself in expansion mode. Beyond seeking contracts for power from existing plants, tech companies are also bullish on next-generation nuclear technologies.
Several are investigating the potential of locating their facilities near small modular nuclear reactors that could feed them power directly. Such technology is in its infancy and has not yet been approved by regulators. That isn’t stopping a company chaired by Microsoft co-founder Bill Gates from doubling down on it. The firm, called Terra Power, this year began construction at what it plans to be a small reactor site in Wyoming.
Microsoft is also pursuing power from nuclear fusion, a potentially abundant, cheap and clean form of electricity that scientists have been trying to develop for decades - and most say is still a decade or more away from generating electricity. Microsoft has signed a contract to purchase fusion energy from a start-up that claims it can deliver it by 2028.
WASHINGTON POST