When I first read the headline from the Guardian, Meta has signed a 20-year deal with Constellation for nuclear power in Illinois. Illinois helps subsidize Constellation Energy’s nuclear plant, the Clinton Clean Energy Center, with a ratepayer-funded zero-emissions credit program that awards benefits for the generation of power virtually free of carbon emissions. With Meta’s power purchase agreement, it will provide the plant with an unspecified amount of money to help with relicensing and operations.
I discovered this is actually the third time a power arrangement like this had been reached in the U.S. Google had previously secured power to supply its data centers from Kairos and its reactors in California, and Microsoft made a deal with Constellation to start up Three Mile Island Unit 1again (Unit 2 is the one that had the accident).
Artificial intelligence is partially responsible for the hyperscalers looking to secure “clean” electricity as U.S. power demand rises significantly. to supply its data centers.
Hyperscalers like AWS, MSFT, Google, etc.) are facing immense power challenges for their massive, centralized data centers due to:
- Explosive Growth of AI: Generative AI and large language models (LLMs) require unprecedented computational power, leading to a massive increase in server rack density and overall power consumption. GPUs, especially, are far more power-hungry than traditional CPUs.
- Grid Strain: Existing electrical grids in many regions are struggling to provide enough power to meet the demand from new hyperscale data center builds. This leads to delays in bringing new capacity online and can strain local grids.
- Sustainability Goals: Hyperscalers have ambitious renewable energy and net-zero goals, which are becoming harder to meet as their total energy consumption skyrockets. Sourcing enough clean, firm power (24/7 renewable energy) is a significant hurdle.
- Transmission and Distribution Limitations: Even if generation capacity exists, the physical infrastructure (transmission lines, substations) may not be sufficient to deliver that power to concentrated data center campuses.
In addition to the concerns that have led to these deals for the hyperscalers come the concerns of the power companies themselves, which is why 20-year contracts have been put in place by Constellation.
“We’re definitely having conversations with other clients, not just in Illinois, but really across the country, to step in and do what Meta has done, which is essentially give us a backstop so that we could make the investments needed to relicense these assets and keep them operating,” said Joe Dominguez, CEO of Constellation.
Urvi Parekh, head of global energy at Meta, explained that, “One of the things that we hear very acutely from utilities is they want to have certainty that power plants operating today will continue to operate.”
Conclusion:
It’s no doubt the demand is real and going to drive a lot of commitment between power companies seeking “a backup” while the hyperscalers seek a dedicated resource that they can rely on now and in the future.
As to whether or not nuclear power plants are going to have a resurgence, I am not sure. Relabeling nuclear as” clean energy,” might match up to all the other reversals of rules going on these days. I personally will find it ironic that the people who attended “no nukes” rallies are going to have to rethink their positions or give up their favorite social media platforms.
Edited by
Erik Linask
