The energy landscape in the U.S. is in the midst of a tectonic shift, driven largely by the surging demand from generative artificial intelligence applications and data centers. According to McKinsey & Company, this demand is compounded by the growing need for seasonal heating and cooling as extreme weather events become more frequent. As a result, Fortune 500 companies and government entities are increasingly turning to advanced nuclear reactor technologies to bridge the widening chasm between energy demand and supply.
The Federal Energy Regulatory Commission (FERC) predicts that this winter will see higher electricity demand than last year, as the grid takes on a multitude of new responsibilities, including powering space heating, electric vehicles, and new manufacturing facilities. The North American Electric Reliability Corporation (NERC) echoes these concerns, noting that meeting this rising demand is becoming increasingly complex. Data centers, notorious for their voracious energy consumption, are at the forefront of this challenge. They require a steady and reliable power supply, and the annual electricity consumption for these facilities is projected to surpass 280 TWh this winter, according to S&P Global.
This spike in energy needs has led organizations like PJM Interconnection to urgently call for the development of more generation capacity. The stakes are high; any disruption in power supply can have catastrophic effects on data center operations. As the energy landscape evolves, the spotlight is shifting toward nuclear power as a viable solution. Advanced nuclear technologies, such as small modular reactors (SMRs) and microreactors, are gaining traction among Fortune 500 companies and government agencies. These reactors promise to be cost-effective and easier to operate than traditional ones, while also being emissions-free—a crucial factor in today’s climate-conscious world.
Recent business developments highlight the growing role of nuclear power in meeting energy demands. For instance, a leading technology firm has secured a 20-year power-purchase agreement with a nuclear energy producer on the East Coast. Similarly, another major player in the tech industry is collaborating with a nuclear energy company to develop advanced nuclear power, with initial deployment expected by 2030. These moves are not just isolated incidents; they represent a broader trend where both private and public sectors are eyeing nuclear technologies as a critical component of their energy strategies.
However, the path forward is not without its hurdles. Utility companies remain cautious, often reluctant to take significant risks in a so-called “nuclear revival.” This has led to innovative financing structures like the build-own-transfer (BOT) model, which mitigates risks for utility stakeholders. Hyperscalers are also adopting project finance models that allow them to lock in favorable pricing through contracts for differences, facilitating investment in nuclear projects without direct state involvement.
Texas is at the forefront of this nuclear push, with Governor Greg Abbott announcing plans to develop a robust advanced nuclear power industry. The Texas Advanced Nuclear Reactor Working Group’s report outlines steps to create a Nuclear Energy Fund aimed at enhancing electric reliability and fostering economic development. The ability of nuclear power to provide a continuous, stable supply of electricity makes it an attractive option for businesses that require reliability—especially as they grapple with the demands of modern energy consumption.
While the advantages of nuclear power are compelling, there are inherent risks. Power plants, including nuclear facilities, require regular maintenance and can be subject to forced outages. Therefore, relying solely on co-located nuclear power plants is not a foolproof solution. A comprehensive strategy must include access to a robust transmission grid to ensure a consistent power supply.
As the U.S. navigates this evolving energy landscape, the challenges are manifold. Ensuring fair cost allocation and regulatory clarity is crucial for both existing and new energy customers. The growing energy demands of data centers and other sectors are prompting a renewed interest in nuclear power as a sustainable and reliable solution. The journey ahead will require collaboration among businesses, governments, and regulatory bodies to address these challenges and harness the potential of nuclear energy in meeting the demands of the future.
