Thanks to the Harris Administration, which would power the country with windmills and solar, America is low on reliable energy sources. The problem with solar and wind power is that if the sun isn’t shining and the wind isn’t blowing, you might not have power. The growing demand for electricity from data centers is running into a lack of reliable power sources, so companies are looking to reopen shuttered nuclear power plants. A recent In-Brief Analysis from the U.S. Energy Information Administration (EIA) explains what’s happening:
Last month, Constellation Energy announced a 20-year power purchase agreement (PPA) to provide electricity to Microsoft data centers in the mid-Atlantic region from the Unit 1 reactor at the Three Mile Island nuclear power plant in Pennsylvania.
Unit 1 had returned to operation in 1985 after the 1979 partial meltdown that affected the adjacent Unit 2, but it was retired in 2019 because then-operator Exelon said it was no longer profitable.
The arrangement is the second this year in which a nuclear power plant owner has agreed to supply a data center with dedicated power as data center owners look for large and reliable sources of electricity supply for planned increases in demand. In March, Amazon Web Services (AWS) signed a contract for 960 megawatts (MW) of capacity from Talen Energy’s Susquehanna nuclear power plant in Pennsylvania. Both plants are in the PJM transmission organization.
What makes nuclear power plants attractive to data center owners?
Although historically costly to build, nuclear power plants typically generate power at relatively low operating costs, with a single reactor generally having a capacity of 800 MW or more. Nuclear power plants also produce electricity without directly emitting carbon dioxide, a consideration for technology firms investing in energy-intensive data centers that are trying to meet self-imposed emissions reduction goals.Data center electricity demand doesn’t fluctuate during the day in the same way as demand from residences or many other businesses. Instead, data center operators typically require a consistent and steady supply of electricity at all hours. Likewise, nuclear power plants operate continuously, and they have difficulty ramping up and down to match variable demand.
The consistent generation from nuclear power plants will ensure that a data center has access to sufficient electricity around-the-clock, while also providing access to a large source of CO2 emission-free power.
How much do these recent power purchase agreements tell us about data center demand?
Although the two agreements underscore that data center operators are in search of large sources of emissions-free electricity, future electricity demand from data centers is subject to several uncertainties, including how much data center capacity will be built, how long it will take each data center to reach its peak demand capacity, and how energy efficiency will improve as data center technology and design evolve.The PPA between Talen and AWS partly reflects this uncertainty. Rather than immediately taking on the fully contracted 960 MW from the Susquehanna plant, AWS will increase its share of capacity in 120-MW increments over multiple years. The company also has a one-time option to cap its commitment at 480 MW.
Typically, requests for electricity capacity by data center owners do not obligate the owner to use the full capacity. The PPAs signed by generators and purchasers often specify the amount of potential peak demand capacity required but not the total energy to be used.
Action Line: You have read a lot about rising energy demand from data centers here at YourSurvivalguy.com. You can see some of those posts below. Be sure you click here to subscribe to my free monthly Survive & Thrive letter so you don’t miss out.
