- Google this week became the latest hyperscaler to ink a deal for nuclear power for its data centers
- There's still several years before these facilities come online
- Hyperscalers will likely have to spend them waging a PR war to assure the public nuclear power is safe and the best option
We told you this would happen. Back in March when Amazon Web Services (AWS) struck its deal to acquire a nuclear-powered data center campus, we wrote about how the move toward nuclear power was likely to sweep the industry. In the ensuing months, Microsoft, Oracle and Google all inked deals to pursue nuclear power. And so, the question has become not whether hyperscalers will go nuclear, but what happens next?
The answer, according to Gartner VP Analyst Bob Johnson, is a PR war.
“Nuke’s got a bad name,” Johnson explained. “The NIMBYs are going to say exactly that, ‘not in my back yard.’ And the environmentalists have made a huge investment in organizations promoting solar, wind and batteries as the only way to go. So, if someone comes in and says ‘hey we can do nuclear’…they’ll scream and yell. And they’ll start bringing up ‘oh my god, this is unsafe.’”
Johnson said to counter that narrative, hyperscalers will have to invest in educating the public about nuclear energy.
It’s important to note there are differences in the way each company is going about their nuclear pursuits. For instance, Microsoft will source power from a restarted reactor on Three Mile Island – which, to put it kindly, is a household name for the wrong reasons. Google and Oracle, meanwhile, are planning to tap into power from small modular reactors (or SMRs).
Either way, though, Johnson said nuclear is generally much safer than other fuel sources like coal and natural gas. And SMRs have even solved some of the problems that caused old nuclear facilities to meltdown in the first place. Specifically, the European Union and International Atomic Energy Agency have noted SMRs rely on inherent and passive safety systems, which means they can automatically achieve a safe state if an incident occurs.
But hyperscalers will have plenty of time to wage their education campaigns in nuclear’s favor.
While the approaches they’re taking are different, both kinds of projects have multi-year timelines. Microsoft partner Constellation Energy has said it expects the Three Mile Island reactor to be operational again by 2028, while Google expects nuclear energy from its partner Kairos Power to be available by 2030.
Kickstarting nuclear
Johnson noted that hyperscalers are investing in nuclear energy – long timetables, PR battles and all – largely because they have no choice. The existing grid simply can’t keep up with the sector’s rapidly growing demand, and other solutions are either not reliable enough (like weather dependent renewables) or not clean enough (coal and natural gas).
According to the International Energy Agency’s “Electricity 2024” report, data centers consumed an estimated 460 terawatt-hours (TWh) of power in 2022. That figure could potentially more than double to 1,050 TWh in 2026. To put it another way, the IEA said rising data center demand will be “roughly equivalent to adding at least one Sweden or at most one Germany” to global electricity demand.
Interestingly, Johnson said the hyperscalers could end up setting off a boom in nuclear deployments. Why? Because the technology (and permitting processes associated with it) is expensive and cloud companies might be the only ones with enough cash to burn to get the ball rolling with purchase agreements so prices start coming down for everyone else.
“The problem you’ve got is once you build enough of them the price will start coming down, but you’ve got to bite the bullet the first time,” Johnson said. “Look at what happened to wind costs in the last 20 years…and solar the same way. They’re probably the only ones with pockets deep enough to do this.”