Extraordinary week for new nuclear announcements, especially for data centers

The seven announcements include three U.S.-based private-sector orders for nuclear energy; three announcements from DOE to support high-assay low enriched uranium (HALEU) and new Generation III+ reactors; and one project to replace a former coal plant in Wales with nuclear energy.

While we have seen many exciting announcements to support nuclear energy over the past few years—many of which we have written about—few prior announcements compare to the flurry of new development and the scale of concrete investment seen in the past month. These announcements come as market conditions—namely a sharp projected increase in energy demand coupled with increasingly pressing climate goals—create a fertile moment for nuclear energy development and deployment.

Three of the announcements pair nuclear energy and data centers, which are single-handedly driving a massive demand for new, clean electricity. For instance, the Electric Power Research Institute estimates that data centers alone could consume up to 9% of U.S. electricity generation annually by 2030—which, if measured as a percentage of 2023 generation, would be about 376,000 gigawatt hours, or the electricity production of the entire country of Indonesia. Adding in projected increases from new domestic manufacturing and electrification, the total energy demand in the United States could grow 25-29% in the next decade alone—double projections from just last year. This skyrocketing demand increase is putting pressure on utility companies to meet U.S. electricity demand—and fears of the increased household electricity rates that often follow increased demand—caused Energy Secretary Jennifer Granholm to urge tech companies to provide their own energy sources for data centers.

Nuclear energy is a natural fit to meet this new demand, as these recent announcements show. Climate change necessitates that new generation sources be carbon-free, and energy-intensive customers like data centers and manufacturing require that generation be reliable. Nuclear energy is a carbon-free source of baseload electricity that can be deployed almost anywhere, meaning it could be sited at or near data centers and other energy-intensive customers. While energy sector insiders have pointed out this harmonization for some time, these recent announcements translate that theory into real-world commercial development—a vital breakthrough moment in the deployment of nuclear energy.

Summary of the Seven Announcements:

Data Center Announcements

• Amazon and X-Energy to Deploy 5 GW of SMRs. On October 16, 2024, advanced reactor company X-Energy announced a collaboration to bring online more than 5 GW of new nuclear power projects—or 64 of X-Energy’s Xe-100 small modular reactors (SMR)—in the United States by 2039. This announcement represents the largest commercial deployment target of SMRs to date. The deployment will begin with an initial four-unit, 320 MW project with utility Energy Northwest in central Washington, with the option to increase up to 960 MW. Amazon is also anchoring a Series C-1 financing found of approximately $500 million to fund X-Energy’s reactor design and licensing as well as the first phase of its TRISO-X fuel fabrication facility in Oak Ridge, Tennessee. This agreement marks a significant step towards deployment of advanced nuclear technologies in the United States and will help commercialize X-Energy’s fuel and reactors. For comparison, 5 GWs of electricity is enough to power approximately 5 million homes.

  This project is in addition to the X-Energy/Dow project whereby X-Energy will provide a reactor to a Dow chemical plant in Texas to provide carbon-free power and process heat, which we have written about previously (here and here). With this announcement, X-Energy is well underway in creating the orderbook that the DOE has said in its Advanced Reactor Liftoff Report would be needed to catalyze commercial liftoff in the United States (written about here).

• Google and Kairos Power to Deploy 500 MW of SMRs. On October 14, Kairos Power and Google publicized a collaboration to deploy 500 MW of advanced nuclear power by 2035, with the first deployment by 2030. Under the agreement, Kairos Power will develop, construct, and operate a series of SMRs and sell energy, ancillary services, and environmental attributes to Google under Power Purchase Agreements (PPA). Kairos’ plants will be sited to supply 24/7 clean electricity to Google data centers. Such an order book from a major investor will help accelerate the commercialization of Kairos’ SMRs.

  In December 2023, Kairos received a construction permit from the U.S. Nuclear Regulatory Commission (NRC) for its Hermes I prototype reactor, and it is expected to receive its second construction permit from the NRC for its Hermes II protype reactors at the end of this year or early next year. Note, this is the first NRC approval in recent times for an advanced reactor design, and the NRC approval for Hermes II—which leverages the experience from licensing Hermes I—with a safety licensing review completed in about 10 months and an environmental review completed in 11 months. The application will also be one of the first advanced reactor applications to be impacted by the NRC’s streamlined mandatory hearing process, new efficiency-focused mission statement, and performance metrics and generic milestone schedules for new reactor licensing, all of which we have written about previously.

• Microsoft and Constellation to Pursue Restart of Three Mile Island Unit 1. The trifecta of nuclear-data center announcements began a few weeks ago with an announcement from Microsoft and Constellation Energy of a 20-year PPA predicated on restarting Three Mile Island Unit 1, which operated from 1974 to 2019. Under the PPA, Microsoft will purchase energy from the restarted Unit 1—to be renamed Crane Clean Energy Center—to supply power for nearby data centers. The power level from the re-start would be enough to power approximately 800,000 homes.

These three announcements all demonstrate the unique role nuclear power can play in providing reliable, clean energy for data centers.

Key U.S. Government Announcements

• Department of Energy Announces $900 Million for Generation III+ SMRs. On October 16, the U.S. Department of Energy (DOE) opened applications for up to $900 million in funding to support the deployment of Generation III+ (Gen III+) SMRs. DOE anticipates offering funding in two tiers:

• Tier 1: First Mover Team Support, managed by the Office of Clean Energy Demonstrations, will provide up to $800M for milestone-based awards to support up to two first mover teams of utility, reactor vendor, constructor, and end-users/off-takers committed to deploying a first plant. The first mover teams must also facilitate a multi-reactor, Gen III+ SMR orderbook. Accompanying these awards will be the opportunity to work with the National Nuclear Security Administration (NNSA) to incorporate safeguards and security by design into the projects.
• Tier 2: Fast Follower Deployment Support, managed by the Office of Nuclear Energy (NE), will provide up to $100M to spur additional Gen III+ SMR deployments by addressing key gaps that have hindered the domestic nuclear industry in areas such as design, licensing, supplier development, and site preparation.

Applications are due by 5pm ET on January 17, 2025. Full eligibility criteria can be found in the funding solicitation. Interested applicants should register for DOE’s informational webinar on October 22, 2024 and reach out to our team for application assistance.

• Department of Energy Announces Four Contracts to Provide HALEU Enrichment Services. On October 17, DOE revealed that it had selected four companies to provide enrichment services to help establish a U.S. supply of HALEU, which is the type of fuel needed for most advanced reactor fuel—including X-Energy and Kairos—but for which the United States currently lacks the commercial capacity to produce. The four companies selected are Louisiana Energy Services, Orano Federal Services, General Matter, and American Centrifuge Operating. This announcement builds on last week’s awards to six companies for HALEU deconversion services, discussed below, and represents DOE’s latest efforts to build a secure domestic uranium supply chain—an effort we have previously written about.

• DOE Announced Deconversion Services Contracts. On October 8, DOE announced contracts to six companies to spur the buildout of a U.S. supply chain for fuels for advanced nuclear reactors. These contracts will allow selected companies to bid on work for deconversion services, a critical component of the HALEU supply chain. Advancing America’s domestic HALEU supply chain will help reinforce America’s leadership in the nuclear energy sector and allow nuclear facilities to power even more homes and businesses with affordable and reliable carbon-free energy.

Additional Announcements Last Week

• U.S. Startup Last Energy to Build 80MW Nuclear Plant at Former Coal Plant in Wales. On October 15, U.S. startup Last Energy announced plans to build a £300 million ($391 million) micro nuclear project on the site of a former coal plant in south Wales. The project will consist of four 20MW microreactors, for a total of 80MW-sized project, and is largely expected to be funded by PPAs with local industrial customers. As in the United States, the current UK government sees nuclear energy as an important part of helping its country achieve energy security and meet clean energy goals. We previously covered the UK’s investment in nuclear technologies here. This new project shows the international reach of U.S. nuclear companies and the role of international markets in building out domestic capabilities.