Microsoft’s Three Mile Island deal heralds broader nuclear comeback

For five years, Reactor one at Pennsylvania’s Three Mile Island nuclear power plant has been dormant. Thanks to a deal with Microsoft, the reactor will start running again in 2028, this time to exclusively supply the tech company with shipments of low-carbon electricity.

It’s all part of an ongoing flirtation between Big Tech and nuclear power. In March, Amazon Web Services agreed to buy a data center powered by the Susquehanna nuclear plant in Pennsylvania. At an event at Carnegie Mellon University on Sept. 18, Alphabet CEO Sundar Pichai touted small modular nuclear reactors as a potential power source for data centers. The connections don’t stop there: OpenAI CEO Sam Altman chairs the boards of nuclear startups Oklo and Helion Energy.

The AI ​​boom has tech companies scrambling to find low-carbon energy sources to power their data centers. The International Energy Agency estimates that electricity demand from AI, data centers, and crypto could more than double by 2026. Even the low estimates say the additional demand would be equivalent to all the electricity used in Sweden or, in the case of high consumption, Germany.

This surge in energy demand is music to the ears of the nuclear power industry. U.S. electricity demand has been relatively flat for decades, but the scale and intensity of the AI ​​boom is changing that dynamic. A December 2023 report from an energy industry consulting firm declared the era of flat electricity demand over, thanks to growing demand from data centers and industrial facilities. The report predicts that peak U.S. electricity demand will increase by 38 gigawatts by 2028, roughly equivalent to 46 times the output of Reactor One at Three Mile Island.

“(AI) is really taking off and getting a lot of attention in the energy sector,” said John Kotek, senior vice president of policy development and public affairs at the nuclear industry trade association, the Nuclear Energy Institute. Kotek said there’s also a national security angle. “People rightly see AI as a competitive space between the U.S. and our global competitors.” The U.S. falling behind in the AI ​​race because it doesn’t have enough muscle “is something that really makes people focus their attention,” he said.

Nuclear power is attractive to tech companies because it provides low-carbon electricity 24 hours a day, unlike solar and wind, which operate intermittently unless combined with some form of energy storage. By reactivating reactor one, Microsoft will get 835 megawatts of low-carbon energy over the 20-year duration of the deal. Given that Microsoft has pledged to be carbon negative by 2030, the growing demand for electricity from AI poses a major threat to the company’s climate plans unless it can find sources of low-carbon energy. In 2023, Microsoft’s emissions rose 29 percent from 2020, largely due to the construction of new data centers.

The Three Mile Island nuclear power plant has two reactors. The second reactor infamously suffered a partial meltdown in 1979 and has been out of service ever since. But reactor one continued to operate without incident until 2019, when it was taken offline for financial reasons, largely due to competition from gas and wind power. Kotek says there are relatively few reactors that are no longer in service and could be brought back online fairly quickly, but many power plant owners are interested in extending the operating licenses of their existing plants in an attempt to ride the AI ​​wave.