Tech Companies’ Nuclear Power Deals May Strain US Power Grid

Tech firms are increasingly seeking nuclear power to meet the rising energy demands of their data centers, potentially jeopardizing grid reliability and affecting American consumers, The Wall Street Journal reported.

About one-third of U.S. nuclear plants are in talks with tech companies to supply nuclear-generated electricity for data centers essential for the AI industry. For example, Amazon Web Services (AWS) is nearing an agreement with Constellation Energy for power from an East Coast nuclear plant. AWS also spent $650 million on a Pennsylvania nuclear-powered data center, a facility capable of powering hundreds of thousands of households.

This growing trend could divert reliable power from the national grid, especially as data centers might consume up to 9% of U.S. electricity by 2030. Pennsylvania Consumer Advocate Patrick Cicero voiced concerns about the impact on regular consumers, highlighting the issue of energy priority for large tech firms.

The potential shift towards nuclear energy could lead to increased reliance on natural gas due to its reliability compared to wind and solar. This outcome could undermine states’ emissions reduction goals, despite tech companies’ investments in green energy projects. An Amazon representative stated the company is exploring various clean energy sources to support their projects.

Building new natural gas plants is becoming difficult due to new EPA regulations requiring expensive carbon capture technology. This challenge is part of broader concerns about U.S. grid reliability. Policies encouraging the retirement of fossil fuel plants, combined with growing electricity demand, could trigger a power crisis. FERC Commissioner Mark Christie warned of “catastrophic consequences” if these trends continue. Similarly, NERC has reported that large parts of the U.S. face increased risks of power shortages during extreme weather.

The tech industry’s increasing interest in nuclear power highlights the need to balance innovative energy solutions with the stability and affordability of the national power grid.