Microsoft's Nuclear Power Deal for AI: Reviving Three Mile Island Amid Controversy

Reopening Three Mile Island nuclear plant for Microsoft data centers could cost taxpayers $1.6 billion

A hot potato: It takes a massive amount of energy to power data centers, which is why Microsoft wants to tap the shuttered nuclear power plant on Three Mile Island for its AI ambitions. According to records, the owner of the plant is looking to secure a $1.6 billion federal loan guarantee to help finance the plan, money provided by taxpayer dollars. The amount of energy being consumed by AI is well-documented, which is why many companies in the industry are looking toward nuclear power as a solution. In September, Microsoft signed a deal to re-open the power plant on Three Mile Island, site of the worst nuclear meltdown in US history in 1979. The agreement stated that the tech giant would purchase all the power generated by the plant, which is being renamed the Crane Clean Energy Center. Now, the Washington Post reports that the owner of the plant, utility company Constellation Energy, filed an application for a $1.6 billion federal loan guarantee with the US Department of Energy in May. The company previously said this amount would cover all the costs associated with reopening the plant, which closed in 2019. The application has cleared an initial review and has reached the stage where specific terms are being negotiated. A loan guarantee means Constellation Energy will be borrowing money directly from the federal government, with the Energy Department acting as guarantor. The Post explains that the loan would ensure federal financial support for the deal. This would be the case even if it fails to be completed and after a lot of money has been spent on the project, thereby shifting much of the risk of reopening the plant onto the taxpayers. It's believed that the loan guarantee could save Constellation up to $122 million in borrowing costs for restarting the facility. That's in addition to the federal tax credits on the sale of the power, which could be worth nearly $200 million annually for Constellation and Microsoft. If Constellation does accept the loan and fails to complete its repayments, the government will have to cover up to $1.6 billion in costs, though the company assures that this won't happen. "Rest assured that to the extent we may seek a loan, Constellation will guarantee full repayment," Constellation said in a statement. "Any notion that taxpayers are taking on risk here is fanciful given that any loan will be backstopped by Constellation's entire $80-billion-plus value." Constellation Energy said it plans to reopen Three Mile Island by 2028, supplying Microsoft with over 800 megawatts of carbon-free electricity across a 20-year agreement - provided the Nuclear Regulatory Commission gives its approval. In January last year, the Nuclear Regulatory Commission gave its approval for the first small modular nuclear reactor to be built in the United States. NuScale Power Corp says its six-reactor, 462-megawatt Carbon Free Power Project should be operational by 2030. It's hoped that small nuclear reactors like these could be used to solve data centers' sustainable power problem.

Three Mile Island owner seeks taxpayer backing for Microsoft AI deal

Energy Department weighing a $1.6 billion loan guarantee for plan to reopen the nuclear plant with Microsoft as its sole customer. The owner of the shuttered Three Mile Island nuclear plant is pursuing a $1.6 billion federal loan guarantee to help finance its plan to restart the Pennsylvania facility and sell the electricity to Microsoft to power data centers, according to details of the application shared with the The Post. The taxpayer-backed loan could give Microsoft and Three Mile Island owner Constellation Energy a major boost in their unprecedented bid to steer all the power from a U.S. nuclear plant to a single company. Microsoft, which declined to comment on the bid for a loan guarantee, is among the large tech companies scouring the nation for zero-emissions power as it seeks to build data centers. It is among the leaders in the global competition to dominate the field of artificial intelligence, which consumes enormous amounts of electricity. The plan to restart Three Mile Island -- the site of the worst nuclear accident in the United States -- has won plaudits from political leaders, including Pennsylvania Gov. Josh Shapiro. The reactor that Constellation plans to recommission was shut down in 2019 and sits next to the unit that has been dormant since a partial meltdown occurred in 1979. The restart plan has already generated controversy as energy experts debate the merits of providing separate federal subsidies for the project, in the form of tax credits. Constellation's pursuit of the $1.6 billion federal loan guarantee, which has not been previously disclosed, is likely to intensify that debate. The loan guarantee request, first submitted by Constellation to the U.S. Energy Department in May, has cleared an initial review. It has reached the stage where the specific terms of a deal would typically start to be negotiated, according to details of the application shared with The Post. A loan guarantee would allow Constellation to shift much of the risk of reopening Three Mile Island to taxpayers. The federal government, in this case, would pledge to cover up to $1.6 billion if there is a default. The guarantees are typically used by developers to lower the cost of project financing, as lenders are willing to offer more favorable terms when there is federal backing. In this case, the loan guarantee could save Constellation up to $122 million in borrowing costs for restarting Three Mile Island, according to John Parsons, an energy economist at the Massachusetts Institute of Technology. It would come on top of the federal tax credits on the sale of the power, passed in the Inflation Reduction Act of 2022, that could be worth nearly $200 million annually for Constellation and Microsoft. Technology companies already benefit from similar tax credits when they purchase energy from a solar or wind farm. But nuclear plants generate more electricity at a higher cost, making the scale of the subsidy larger. The Energy Department declined to comment on the application, citing confidentiality concerns. Constellation did not directly confirm it applied for the loan guarantee. But it discussed the loan in the context of The Washington Post's questions. It said it has not decided whether to accept a loan if one were approved. It also extended assurances that any financial risk for taxpayers would be negligible. "Rest assured that to the extent we may seek a loan, Constellation will guarantee full repayment," said a statement from the company. "Any notion that taxpayers are taking on risk here is fanciful given that any loan will be backstopped by Constellation's entire $80-billion-plus value." The loan guarantee program gives applicants the option of borrowing the money to fund their project directly from the U.S. Treasury, with the Energy Department still serving as the guarantor in the event of a default. The Constellation application does not specify if the company plans to go that route. Constellation announced last month that it had struck a deal with Microsoft through which the tech company would purchase all the power from the plant, should regulators sign off on restarting its unit that closed in 2019. Constellation plans to restart Three Mile Island by 2028. The company is renaming the facility the Crane Clean Energy Center, which is the name used on the federal loan guarantee application. Constellation said its contract with Microsoft would last for 20 years, but the companies are not disclosing any pricing details. The biggest risk to taxpayers would be if the project were to fail after a significant amount of money is spent trying to get Three Mile Island operational. Such setbacks are common when new nuclear plants are being built. The last new nuclear reactors to go online, near Augusta, Ga., were seven years late and $17 billion over budget. Constellation says it is confident Three Mile Island won't face such setbacks, because the company is restarting an existing unit rather than building a new one from the ground up. The Energy Department announced this week that it closed a $1.52 million loan guarantee for the only other active project to restart a nuclear power plant, the shuttered Palisades nuclear facility in Western Michigan, which closed in 2022. Michigan Gov. Gretchen Whitmer (D) had lobbied the owner, Holtec, to reconsider its plan to permanently decommission the plant. Palisades and Three Mile Island would each generate enough energy to power 800,000 homes if successfully reopened. It is still far from certain that either will come back online. They will be subject to intensive safety inspections by the Nuclear Regulatory Commission. Should the inspectors turn up unanticipated issues, the plant owners could find themselves scrambling to acquire replacement parts that need to be custom built, jeopardizing the tight timelines they have set for the openings. Proponents say reopening nuclear power plants is a good option, especially with increased demand from data centers that are being built across the country. "We want Microsoft to buy their electricity from zero carbon energy sources instead of from coal plants, so it is in the interest of all of us that this nuclear power plant gets reopened," Parsons said of the Three Mile Island plan. He said that while the loan guarantee does bring risk, the reopening of an existing nuclear plant is far less likely to run into the massive cost overruns and delays that are common with the construction of a new nuclear plant. The power from Three Mile Island would not be connected to directly to Microsoft's data centers. It would flow into the broader power grid that serves 13 states and Washington, D.C. But as the purchaser of the clean energy, the tech company can use it to erase -- on paper -- the emissions from burning gas or coal to produce electricity that does flow into its data centers. Microsoft is among several large tech firms using such accounting methods to brand their data centers climate friendly. But some critics question if Constellation is presenting an overly optimistic assessment of how quickly and cheaply a nuclear plant can be restarted. The company said last month that $1.6 billion would cover the full cost of reopening Three Mile Island by 2028. That is the same amount the company is now seeking in its loan guarantee application. "We have one big tech company trying to do something that is not aligned with how the markets should be working, and they want to do it on the backs of ratepayers and taxpayers," said Evan Caron, co-founder of Montauk Climate, which invests in clean-energy technologies. If there are any cost overruns or delays, Microsoft would probably have the option of abandoning the deal and Constellation would need to find another buyer willing to pay a premium for Three Mile Island power, he said. "This has real risk," said Caron. "I think the likelihood of that plant coming back online by 2028 is low to zero." Constellation takes exception. "We know every inch of this plant and what needs to be done," the company said in a statement. "To be clear, Constellation will restart Crane in 2028, and in fact, we will aim to restart it a year earlier." Baltimore-based Constellation is one of the nation's biggest energy companies, selling electricity and natural gas in 48 states. It owns 15 nuclear power plants. The company says it provides 10 percent of the clean energy used nationwide. The company's value collapsed during the financial crisis of 2008. It later merged with energy giant Exelon. In 2022, Exelon spun off Constellation. Constellation's stock price jumped more than 20 percent following its Sept. 20 announcement of the deal to sell Microsoft energy from Three Mile Island.

Microsoft's Nuclear Power Deal Could Saddle Taxpayers With $1.6 Billion Federal Loan

A new scheme for AI fuel could offload financial risk from Microsoft's business partner onto the American taxpayer. In an effort to find a power source big enough to fuel its ambitious artificial intelligence business, Microsoft has sought to revive a shuttered nuclear power plant in Pennsylvania. AI notably needs an absurd amount of energy to function, and companies have floated nuclear power as a potential solution. In September, Microsoft signed a deal to re-open the power plant on Three Mile Island, the likes of which has been shuttered since 2019. The plant is notorious for having been the site of a meltdownâ€"the worst in American historyâ€"that occurred in 1979. The financials of Microsoft's deal have recently come to light, with a new report suggesting that the tech company and its business partner want American taxpayers to front some of the risks associated with the plant's re-opening. The Washington Post reports that Constellation Energy, the utility company that owns and operates the reactor at Three Mile Island, filed an application for a $1.6 billion federal loan guarantee with the U.S. Department of Energy in May. The Post writes that the application has already cleared an initial review and is now at the stage where specifics of the agreement are being negotiated. A loan guarantee would essentially ensure a certain amount of federal financial support for the deal, regardless of whether it ultimately succeeds or not. The controversy from this potential agreement stems from the fact that it could be seen to offload over a billion dollars of financial risk onto the shoulders of taxpayers. Should anything go wrong with the business arrangement and were Constellation to default on its obligations, the government would still be forced to cover up to $1.6 billion in costs, the newspaper reports. Constellation has rushed to assure observers that no such thing will happen. “Rest assured that to the extent we may seek a loan, Constellation will guarantee full repayment,†Constellation told the Post. “Any notion that taxpayers are taking on risk here is fanciful given that any loan will be backstopped by Constellation’s entire $80-billion-plus value.†Gizmodo reached out to Constellation and Microsoft for comment. The deal has already enjoyed a number of federal tax credits (some of which may be worth as much as $200 million a year for the two companies, the Post writes), which would seem to imply that the government is supportive of the project. The U.S. Energy Secretary has openly complimented the effort, claiming the government is "bullish" on it. Some commentators have noted that, while most nuclear power deals are heavily facilitated through federal handouts, this deal is being almost exclusively financed by Microsoft and it intends to be the main beneficiary of the plant's services. That said, other voices have noted that the deal will likely require more federal dollars as it progresses. “The $1.6 billion is just the start,†Stanford professor of civil and environmental engineering Mark Jacobson told The New Republic. “Microsoft will be asking for government handouts just like most all other aged nuclear reactor owners have asked in multiple states.†If Microsoft's deal is finalized, the Three Mile Island reactor would be restarted by the year 2028. Microsoft would then have a 20-year contract with Constellation that assured it ownership over 100 percent of the plant's output during that time.

Microsoft goes nuclear for its energy-hungry data centers as it bets on infamous Three Mile Island station power for its AI ambitions

Microsoft has signed a deal with one of the most infamous nuclear power facilities in the US as it looks for more ways to ensure the demand for AI computing is met. The legacy of the Three Mile Island (TMI) nuclear plant has long been shaped by the 1979 Unit 2 meltdown, which had a profound effect on public perceptions of nuclear energy. What a lot of people don't know is that Unit 1 was not only unaffected, but continued to operate safely and reliably for decades. Now, in a major new step, Constellation has signed its largest power purchase agreement with Microsoft, leading to the planned restoration and restart of TMI Unit 1 under the name Crane Clean Energy Center (CCEC). The project is expected to bring 835 megawatts of carbon-free power to the grid, create 3,400 jobs, and contribute over $3 billion in taxes. Under this agreement, Microsoft will purchase the energy produced by the renewed plant to match the power consumption of its data centers within the PJM grid. The tech giant has been exploring nuclear energy as a way to power its data centers for a while now, although this will be by far its most high profile deal. "This agreement is a major milestone in Microsoft's efforts to help decarbonize the grid in support of our commitment to become carbon negative," noted Bobby Hollis, VP of Energy at Microsoft. Joe Dominguez, President and CEO of Constellation, commented on the deal, saying, "Powering industries critical to our nation's global economic and technological competitiveness, including data centers, requires an abundance of energy that is carbon-free and reliable every hour of every day, and nuclear plants are the only energy sources that can consistently deliver on that promise." Before TMI Unit 1 can be restarted, it will undergo substantial modernization, including upgrades to the turbine, generator, and cooling systems. Approval from the US Nuclear Regulatory Commission will also be required, with plans to extend the plant's operations through 2054. The plant is scheduled to come back online by 2028. A report by The Brattle Group found that the Crane Clean Energy Center, renamed to honor former Constellation CEO Chris Crane, will not only add more than 800 megawatts of clean energy but also inject $16 billion into Pennsylvania's GDP and generate $3 billion in taxes. Additionally, Constellation has committed $1 million over five years to support local workforce development and community programs. Public support for nuclear energy remains strong in Pennsylvania, with a recent poll showing a 2-to-1 margin in favor of restarting TMI Unit 1. Governor Josh Shapiro praised the project, saying, "The Crane Clean Energy Center will safely utilize existing infrastructure to sustain and expand nuclear power in the Commonwealth while creating thousands of energy jobs and strengthening Pennsylvania's legacy as a national energy leader." The resurgence of nuclear energy, particularly as a reliable, carbon-free power source for energy-intensive sectors like data centers, is increasingly appealing to firms like Microsoft and Oracle who are betting big on it.

Power-Thirsty AI Turns to Mothballed Nuclear Plants. Is That Safe?

As Microsoft strikes a deal to restart a reactor at Three Mile Island to power AI, nuclear specialists weigh in on the unprecedented process Microsoft announced on 20 September that it had struck a 20-year deal to purchase energy from a dormant nuclear power plant that will be brought back online. And not just any plant: Three Mile Island, the facility in Londonderry Township, Pennsylvania, that was the site of the worst-ever nuclear accident on US soil when a partial meltdown of one of its reactors occurred in 1979. The move, which symbolizes technology giants' need to power their growing artificial-intelligence (AI) efforts, raises questions over how shuttered nuclear plants can be restarted safely -- not least because Three Mile Island isn't the only plant being brought out of retirement. Palisades Nuclear Plant, an 805-megawatt facility in Covert, Michigan, was shut down in May 2022. But the energy company that owns it, Holtec International, based in Jupiter, Florida, plans to reopen it. This reversal in the facility's fortunes has been bolstered by a US$1.5-billion conditional loan commitment from the US Department of Energy (DoE), which sees nuclear plants -- a source of low-carbon electricity -- as a way of helping the country to meet its ambitious climate goals. The Palisades plant is on track to reopen in late 2025. If you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today. "It's the first time something like this has been attempted, that we're aware of, worldwide," says Jason Kozal, director of the reactor safety division at a regional office of the US Nuclear Regulatory Commission (NRC) in Naperville, Illinois, and the co-chair of a regulatory panel overseeing the restart of Palisades. Here, Nature talks to nuclear specialists about what it will take to restart these plants and whether more are on the way as the world's demand for AI grows. Since 2012, more than a dozen nuclear plants have been shut down in the United States, in some cases as a result of unfavourable economics. Less cost-effective plants -- such as those with only a single working reactor -- struggled to remain profitable in states with deregulated electricity markets and widely varying prices. Three Mile Island, owned by the utility company Constellation Energy in Baltimore, Maryland, is a prime example. Today, 54 US plants remain in operation, running a total of 94 reactors. Nuclear energy, which accounts for about 9% of the world's electricity, has seen some resurgence internationally, but is also competing with other energy sources, including renewables. After the 2011 Fukushima Daiichi disaster, Japan suspended operations at all of its 48 remaining nuclear plants, but these are gradually being brought back online, in part to cut dependence on gas imports. By contrast, Germany announced a phase-out of its nuclear plants in 2011, and shut down its last three in 2023. In the United States, nuclear energy's fortunes might be turning as technology companies race to build enormous, energy-gobbling data centres to support their AI systems and other applications while somehow fulfilling their climate pledges. Microsoft, for instance, has committed to being carbon negative by 2030. "It's further confirmation of the value of nuclear, and, if the deal is right -- if the price is right -- then it makes business sense, as well," says Jacopo Buongiorno, the director of the Center for Advanced Nuclear Energy Systems at the Massachusetts Institute of Technology in Cambridge. This isn't the first time that the United States has brought a powered-down reactor back online. In 1985, for example, the Tennessee Valley Authority, a federally owned electric utility company, took the reactors at its Browns Ferry Nuclear Power Plant in Athens, Alabama, offline. After years of refurbishment, they were brought back online, with the final reactor restarted in 2007. The cases of Palisades and Three Mile Island are different, however. When those plants closed, their then-owners made legal statements that the facilities would be shut down, even though their operating licenses were still active. Three Mile Island, which will be renamed the Crane Clean Energy Center under the proposed restart, shut down its single remaining functional reactor in 2019. Because the plants were slated for shutdown and safety checks were therefore stopped, regulators and companies must now navigate a complex licensing, oversight and environmental-assessment process to reverse the plants' decommissioning. Safety checks will be needed to ensure, among other things, that the plants can operate securely once uranium fuel rods have been replaced in their reactors. When these plants were decommissioned, their radioactive fuel was removed and stored, so the facilities no longer needed to adhere to many exacting technical specifications, says Jamie Pelton, also a co-chair of the Palisades restart panel, and a deputy director at the NRC's Office of Nuclear Reactor Regulation in Rockville, Maryland. It will be no small feat to reinstate those safety regulations: to meet the standards, infrastructure will need to be inspected carefully. According to Buongiorno, any metallic components in the plants that have corroded since the shutdowns, including wires and cables used in instrumentation and controls, will need to be replaced. The plants' turbine generators, which make electricity from the steam produced as the plants' fuel rods heat up water, will also get a close look. After sitting dormant for years, a turbine could develop defects within its shaft or corrosion along its blades that would require refurbishment. In the case of Palisades, the NRC announced on 18 September that the plant's steam generators would need further testing and repair, following inspections conducted by Holtec. As the plants near their restart dates, their operators will also have to contend with a challenge faced by even fully operational plants: the need to source fresh nuclear fuel. US nuclear utility companies have long counted on the international market to buy much of the necessary raw yellowcake uranium and the services that separate and enrich uranium-235, the isotope used in nuclear reactors' fuel rods. Russia has been a major international supplier of these services, even after the country's 2022 invasion of Ukraine, because US and European sanctions have not targeted nuclear fuel. But to minimize its reliance on Russia, the United States is building up its own supply chain, with the DoE offering $3.4 billion to buy domestically enriched uranium. There probably won't be too many other restarts of mothballed nuclear plants in the United States, however, even as demand for low-carbon electricity grows. Not every US plant that has been shut down is necessarily in good enough condition to be easily refurbished -- and the idea of reopening some of those would meet with too much resistance. As an example, Buongiorno points to New York's Indian Point Energy Center, which was closed in 2021. The plant's proximity to New York City had long provoked criticism from nuclear-safety advocates. But that doesn't mean that all of these sites will remain unused. One option is to build advanced reactors -- including large reactors with upgraded safety features and small modular reactors with innovative designs -- on sites where old nuclear plants once stood, to take advantage of existing transmission lines and infrastructure. "We might see interest in the US in building more of these large reactors, whether that's fuelled by data centres or some other applications," Buongiorno adds. "Utilities and customers are exploring this at the moment."

Nuclear power for AI: what it will take to reopen Three Mile Island safely

Microsoft announced on 20 September that it had struck a 20-year deal to purchase energy from a dormant nuclear power plant that will be brought back online. And not just any plant: Three Mile Island, the facility in Londonderry Township, Pennsylvania, that was the site of the worst-ever nuclear accident on US soil when a partial meltdown of one of its reactors occurred in 1979. The move, which symbolizes technology giants' need to power their growing artificial-intelligence (AI) efforts, raises questions over how shuttered nuclear plants can be restarted safely -- not least because Three Mile Island isn't the only plant being brought out of retirement. Palisades Nuclear Plant, an 805-megawatt facility in Covert, Michigan, was shut down in May 2022. But the energy company that owns it, Holtec International, based in Jupiter, Florida, plans to reopen it. This reversal in the facility's fortunes has been bolstered by a US$1.5-billion conditional loan commitment from the US Department of Energy (DoE), which sees nuclear plants -- a source of low-carbon electricity -- as a way of helping the country to meet its ambitious climate goals. The Palisades plant is on track to reopen in late 2025. "It's the first time something like this has been attempted, that we're aware of, worldwide," says Jason Kozal, director of the reactor safety division at a regional office of the US Nuclear Regulatory Commission (NRC) in Naperville, Illinois, and the co-chair of a regulatory panel overseeing the restart of Palisades. Here, Nature talks to nuclear specialists about what it will take to restart these plants and whether more are on the way as the world's demand for AI grows. Since 2012, more than a dozen nuclear plants have been shut down in the United States, in some cases as a result of unfavourable economics. Less cost-effective plants -- such as those with only a single working reactor -- struggled to remain profitable in states with deregulated electricity markets and widely varying prices. Three Mile Island, owned by the utility company Constellation Energy in Baltimore, Maryland, is a prime example. Today, 54 US plants remain in operation, running a total of 94 reactors. Nuclear energy, which accounts for about 9% of the world's electricity, has seen some resurgence internationally, but is also competing with other energy sources, including renewables. After the 2011 Fukushima Daiichi disaster, Japan suspended operations at all of its 48 remaining nuclear plants, but these are gradually being brought back online, in part to cut dependence on gas imports. By contrast, Germany announced a phase-out of its nuclear plants in 2011, and shut down its last three in 2023. In the United States, nuclear energy's fortunes might be turning as technology companies race to build enormous, energy-gobbling data centres to support their AI systems and other applications while somehow fulfilling their climate pledges. Microsoft, for instance, has committed to being carbon negative by 2030. "It's further confirmation of the value of nuclear, and, if the deal is right -- if the price is right -- then it makes business sense, as well," says Jacopo Buongiorno, the director of the Center for Advanced Nuclear Energy Systems at the Massachusetts Institute of Technology in Cambridge. This isn't the first time that the United States has brought a powered-down reactor back online. In 1985, for example, the Tennessee Valley Authority, a federally owned electric utility company, took the reactors at its Browns Ferry Nuclear Power Plant in Athens, Alabama, offline. After years of refurbishment, they were brought back online, with the final reactor restarted in 2007. The cases of Palisades and Three Mile Island are different, however. When those plants closed, their then-owners made legal statements that the facilities would be shut down, even though their operating licenses were still active. Three Mile Island, which will be renamed the Crane Clean Energy Center under the proposed restart, shut down its single remaining functional reactor in 2019. Because the plants were slated for shutdown and safety checks were therefore stopped, regulators and companies must now navigate a complex licensing, oversight and environmental-assessment process to reverse the plants' decommissioning. Safety checks will be needed to ensure, among other things, that the plants can operate securely once uranium fuel rods have been replaced in their reactors. When these plants were decommissioned, their radioactive fuel was removed and stored, so the facilities no longer needed to adhere to many exacting technical specifications, says Jamie Pelton, also a co-chair of the Palisades restart panel, and a deputy director at the NRC's Office of Nuclear Reactor Regulation in Rockville, Maryland. It will be no small feat to reinstate those safety regulations: to meet the standards, infrastructure will need to be inspected carefully. According to Buongiorno, any metallic components in the plants that have corroded since the shutdowns, including wires and cables used in instrumentation and controls, will need to be replaced. The plants' turbine generators, which make electricity from the steam produced as the plants' fuel rods heat up water, will also get a close look. After sitting dormant for years, a turbine could develop defects within its shaft or corrosion along its blades that would require refurbishment. In the case of Palisades, the NRC announced on 18 September that the plant's steam generators would need further testing and repair, following inspections conducted by Holtec. As the plants near their restart dates, their operators will also have to contend with a challenge faced by even fully operational plants: the need to source fresh nuclear fuel. US nuclear utility companies have long counted on the international market to buy much of the necessary raw yellowcake uranium and the services that separate and enrich uranium-235, the isotope used in nuclear reactors' fuel rods. Russia has been a major international supplier of these services, even after the country's 2022 invasion of Ukraine, because US and European sanctions have not targeted nuclear fuel. But to minimize its reliance on Russia, the United States is building up its own supply chain, with the DoE offering $3.4 billion to buy domestically enriched uranium. There probably won't be too many other restarts of mothballed nuclear plants in the United States, however, even as demand for low-carbon electricity grows. Not every US plant that has been shut down is necessarily in good enough condition to be easily refurbished -- and the idea of reopening some of those would meet with too much resistance. As an example, Buongiorno points to New York's Indian Point Energy Center, which was closed in 2021. The plant's proximity to New York City had long provoked criticism from nuclear-safety advocates. But that doesn't mean that all of these sites will remain unused. One option is to build advanced reactors -- including large reactors with upgraded safety features and small modular reactors with innovative designs -- on sites where old nuclear plants once stood, to take advantage of existing transmission lines and infrastructure. "We might see interest in the US in building more of these large reactors, whether that's fuelled by data centres or some other applications," Buongiorno adds. "Utilities and customers are exploring this at the moment."

Is nuclear energy the zero-carbon answer to powering AI?

The rise of AI and its insatiable demand for energy could not have come at a better time for the nuclear industry. After decades of stagnation in the west, this year has seen a rush of demand for nuclear plants from the so-called hyperscale tech companies, Google, Amazon, Meta and Microsoft, which need vast amounts of low-carbon 24-hour electricity to run their data centres and win what one of the companies internally calls "the AI war". Some of the world's biggest banks also threw their weight behind the industry at a climate event in New York last week in a public show of support for a sector that is selling itself as a key part of the transition to clean energy. "AI data centres will be built next to energy production sites that can produce gigawatt-scale, low-cost, low-emission electricity continuously. Basically, next to nuclear power plants," said Yann LeCun, chief AI scientist at Meta, on X. "There is real appetite. There's a limit to what we can say, you can read between the lines at every hyperscaler, there's appetite," said Chris Rees, energy strategy manager at Meta. The excitement in the nuclear industry is palpable. While China and South Korea have been busy building nuclear reactors in recent decades, there has been marked decline in the US and Europe. After a wave of nuclear power stations were built in the 1970s and 1980s, the US has only built three new reactors since the mid 1990s, with the industry suffering from heavy cost overruns. Accidents at Three Mile Island in 1979, Chernobyl in 1986 and the earthquake and tsunami that hit the Fukushima plant in 2011 have also triggered public antipathy to the technology. Last month, Microsoft announced it would revive the mothballed nuclear plant at Three Mile Island, Pennsylvania, while Amazon paid $650mn in March to put a data centre next to the Susquehanna Steam Electric nuclear plant, also in Pennsylvania. The premium prices that tech companies are willing to pay may also trigger a wave of investment in new nuclear plants, investors said. "We're seeing price points in the market that will validate new construction," said Arthur Hyde of Segra Capital, a hedge fund that has invested in the supply chain of uranium, the metal used in most nuclear power plants. "You have government commitments to invest in new nuclear, you have financial commitments to support it, and we know the demand picture is there. Those are the commitments you need to green light new nuclear capacity in the US and Europe. For the first time, we're seeing all those components together. "I'm quite bullish that we will see new nuclear capacity announcements in the United States over the next 12 months," he added. But behind the hype, there remain structural challenges, including the key question of who will be willing to bear the high risk of nuclear projects, which can go years over deadline and billions over budget. "Tech companies will not want to have anything to do with owning a nuclear asset. If they do, they've lost their minds. That's not what they're in business to do," a data centre and nuclear insider at a top-three tech company said. At a nuclear industry dinner ahead of New York Climate Week, Caroline Golin, the head of energy markets development at Google, warned that tech companies cannot be expected to take all the project risk, according to two people who were present. Todd Noe, the director for nuclear at Microsoft, said at the World Nuclear Symposium in London last month the most that tech companies are willing to do to support new nuclear plants is to offer long-term contracts at good prices for the power. That may not be enough. "They are talking to us, they are talking to nuclear technology providers, they are talking to utilities, but they do not want to build, own and operate their own nuclear reactors, they want to be the end users," said Ahmet Tokpinar, the general manager of the nuclear power business at the US engineering giant Bechtel. "They are willing to offer long-term power purchase agreements (PPAs), even at a premium. That is great, but it is not helping with the front end development. Whose capital is going to help underwrite the risk?" he said. PPAs are long-term agreements to buy energy at a pre-determined price, but they do not cover any cost overruns or delays that a project might incur. Tokpinar added that while he was aware there had been some discussions about tech companies putting equity into projects, he said none of these had progressed. "For [new power plants] to happen, they need to step in, in a big way. I cannot see anyone else. They have the means to do it, they have the capital to do it. Whether it is something they can justify to their shareholders is beyond me." Microsoft, Amazon and Google all declined to comment on their nuclear strategy. The technology companies and the nuclear power groups are trying to find a formula that will work for them, with the banks advising both. "I would not be terrifically surprised if the landscape for these radically complex projects requires some changes to the way the PPA works," said Peter Freed, former director of energy strategy at Meta. He suggested the ultimate price that tech companies pay for their energy could be set at a later date from the initial deal, to capture any overruns from construction. "You demonstrate that there's demand available and then the price does not fix until you get further along," he said. "The debate is, this needs a new market structure that does not currently exist," said one financier at the climate event in New York, adding: "The low-hanging fruit for all these hyperscalers is to look at existing reactors." But he warned that if tech companies start pulling large quantities of low carbon nuclear power away from the grid, they face a political backlash. "Pennsylvania's clean energy is 88 per cent nuclear. You start taking the nuclear plants away and their ability to hit net zero targets becomes really compromised," he noted. Tony Grayson, general manager at Compass Quantum and a former US Navy nuclear submarine captain who went on to help build Oracle's data centre business, said tech companies could provide subsidies for new projects, stepping into the role that governments have traditionally played. They could also offer low-priced power to local communities to overcome objections to new nuclear projects. But he warned the nuclear industry against excessive hype, noting that projects tend to be measured in decades and that technology can change rapidly and radically. "In datacentres you make your money on speed to market. Nuclear is not speed to market," he said. "I am a huge believer in nuclear power, but we just need to take a deep breath and realise this stuff is not going to happen anytime soon."