America’s Three Mile Island energy plant, the site of the worst nuclear accident in US history, is preparing to reopen its nuclear reactors as Microsoft looks for a way to satisfy its growing energy needs. The new 20-year agreement will add approximately 835MW of carbon-free energy to the 13-state PJM grid. Microsoft has entered into the deal with Constellation Energy, which expects the Unit 1 reactor to be back online in 2028, with plans to extend the plant’s operation until at least 2054.
Recently, tech giants like Microsoft have been ramping up their investments in power purchase agreements (PPAs) to secure more low-carbon energy, aiming to meet ambitious net zero targets. Global tech firms have struggled with data centre energy usage, which has driven energy demands and – in turn – emissions. According to the International Energy Agency, data centres consumed 460TWh in 2022, representing 2% of all global energy usage. Further analysis by JPMorgan found tech giants Amazon, Google, Meta and Microsoft are on track to spend $185 billion on AI in 2024, and it is predicted that energy demand could rise to 1,050TWh by 2026.
Energy demands, coupled with limited renewable energy availability, have created conditions for the PPA market to flourish, growing at a CAGR of 38.6% between 2017 and 2023 (see Verdantix Market Overview: Demystifying Corporate Power Purchase Agreements). While renewable energy PPAs have been the norm, the scarcity of renewables has revived interest in nuclear power. At COP28, global leaders pledged to triple nuclear power capacity, and in January 2024 the UK government outlined plans to quadruple nuclear generation. Despite this, nuclear power remains contentious, with concerns ranging from safety and waste disposal to economic viability.
However, skyrocketing energy prices in 2022 following the Russian invasion of Ukraine opened the door for a nuclear renaissance, and increasing urgency to procure clean energy now means nuclear power is increasingly seen as an attractive and feasible option for corporate firms and utilities providers alike. This is the third example of a tech firm hunting for nuclear power to meet electricity demands in the last 12 months, with AWS purchasing a data centre in March that will be powered by Susquehanna nuclear power plant in Pennsylvania. Oracle, meanwhile, recently announced it is designing a data centre that will be powered by three small nuclear reactors. In the last 20 years, opinions on nuclear power can be characterized by scepticism and caution, but it now appears that the tide is turning, as surges in energy demand outweigh the public safety concerns and poor economics that have historically stalled nuclear energy adoption.
