Amazon and Google’s Nuclear Investment Showdown
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Companies Utilize Clean Energy to Power Data Centers
On October 16, Amazon announced an investment in small nuclear reactors, following a similar announcement by Google just two days prior. Both tech giants are seeking new sources of carbon-free power to meet the surging demand from data centers and artificial intelligence.
Last month, the owner of the decommissioned Three Mile Island nuclear plant said it plans to restart the reactor so that Microsoft can purchase electricity for its data centers. The three companies have been investing in solar and wind technologies that do not produce greenhouse gases. Now they say they need to go further in seeking clean power to meet demand and fulfill their commitments to reduce emissions.
Nuclear energy, as a climate solution, does not emit the greenhouse gases produced by fossil fuel plants burning oil, coal, or natural gas. With the electrification of buildings and transportation, electricity demand is surging globally. Last year, more power was used than ever before, putting pressure on grids worldwide. Much of this demand comes from data centers and AI.
The International Energy Agency predicts that total power consumption by data centers could reach over 1,000 terawatt-hours by 2026, more than double the amount in 2022. One terawatt-hour can power about 70,000 homes for a year.
“AI is driving significant demand growth for data centers and electricity,” Kevin Miller, Amazon Web Services’ vice president of global data centers, told the Associated Press, adding, “We believe advanced new nuclear capacity will be key and necessary.”
The U.S. is pursuing small modular reactors (SMRs), which can produce about a third of the power of traditional reactors. Developers say SMRs will be built faster and at lower costs than large power-generating reactors and can be tailored to specific site needs. If the Nuclear Regulatory Commission allows these designs to be constructed and operated, they plan to start generating electricity in the early 2030s.
If new sources of clean power are not added while data centers are being developed, the U.S. could face a “grid brownout,” where more power is generated from non-clean energy sources. Associate Professor Kathryn Huff at the University of Illinois Urbana-Champaign noted that these reactors are currently under development and none has yet supplied power to the U.S. grid. Major investors can help change this situation, and these announcements may be a turning point for scaling up the technology.
MIT professor of nuclear science and engineering Jacopo Buongiorno agrees, stating that the industry needs customers who value the reliability and carbon-free attributes of nuclear energy and are willing to pay a premium initially until next-generation reactors become more numerous and cost-effective.
On October 14, Google announced it is entering into an agreement with Kairos Power to purchase nuclear power from multiple SMRs planned by the company.
This news highlights “the technology we need for round-the-clock clean energy, not just for Google but for the world,” said Michael Terrell, Google’s head of energy and climate, in a statement to the Associated Press.
Through its partnership with Kairos, Google expects to have its first SMR online by 2030, with more coming online by 2035. The agreement is expected to add 500 megawatts to the grid. For reference, according to the company’s annual environmental report, Google consumed over 24 terawatt-hours of electricity last year. One terawatt equals one million megawatts.
Meanwhile, Amazon announced on October 16 that it will collaborate with utility Dominion Energy to explore building SMRs near the existing North Anna nuclear plant in Virginia. Amazon is investing in early development work with reactor developer X-energy and partnering with regional utility Energy Northwest in central Washington State to deploy four X-energy reactors.
Together, these three announcements could contribute over 5,000 megawatts of power to the grid by the late 2030s, potentially more. This is likely just a small portion of their total energy consumption; Amazon has not disclosed its overall energy usage data.
New reactor designs complement industrial applications because they take up less space and provide reliable electricity, with some able to supply high-temperature heat on-site, said Doug True, nuclear chief officer at the Nuclear Energy Institute, an industry association.
“This seems well-suited for supporting these facilities and can be used in many different applications based on customer power needs,” he stated.
Both Amazon and Google have announced plans to use renewable energy to combat climate change. By 2030, Google has committed to achieving net-zero emissions and round-the-clock carbon-free energy across every grid it operates. The company claims to match its global electricity consumption with 100% renewable energy purchases on an annual basis. However, the company has not yet met its goals for reducing emissions.
Amazon states that by 2030, it will match 100% of its global electricity consumption with renewable energy and recently announced achieving this goal ahead of schedule in 2023. Despite matching its consumption with renewable purchases, this does not mean the company’s operations are powered by these sources.
According to its 2023 sustainability report, Amazon’s power emissions fell by 11%, but direct emissions (known as Scope 1) increased by 7%. The company has also set a goal of achieving net-zero carbon by 2040.
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Source: Transport Topics
