A Nuclear Solution: Powering Data Centers, AI, and Beyond
Peter Perri III
Investment Banking: Power, Climate, Infra || Energy Transition || Project Finance || M&A || Exit Strategies || Venture Capital || Private Equity || Helping Leaders Execute Great Deals & Make a Difference.
AI is here in full force, growing more and more by the day. Especially at scale, AI requires substantial computational resources, which in turn necessitate more data center capacity. That means electricity - and a lot of it. Could nuclear be a solution? With nuclear startup Oklo Inc recently going public, it's evident that the tech world is starting to embrace this option as a key source of cheap, reliable, and low-carbon power.
By 2030, AI will draw as much power as an entire country
The relationship between AI and power demand is undeniable. By 2030, AI could account for 3% to 4% of total global power demand. That’s enough consumption to make AI’s electricity use equal to that of countries like Russia or Japan. Largely as a result, power demand from data centers is expected to increase dramatically. In the U.S., that increase will be 80% between 2023 and 2030, reaching about 35 GW total. This is an enormous increase in electricity demand, with no plan yet in place to make up the difference.
Nuclear Startup Oklo Goes Public
Nucear energy company Oklo is one of the leaders of this nuclear revival. They focus on small modular reactors (SMRs), which are scalable, efficient, and cost-effective. The startup is backed by OpenAI CEO Sam Altman and recently went public. The company also recently partnered with Wyoming Hyperscale to deliver 100 megawatts to their data centers. SMRs could be a big part of the solution for data centers and AI, with plenty of potential to power large-scale operations sustainably.
Addressing Environmental Concerns
Critics of nuclear energy often cite safety and waste disposal as major concerns. However, advancements in nuclear technology, such as Oklo's compact reactors, address these issues. Other companies, like DEEP ISOLATION , are working on safe nuclear waste storage options. The startup, headed by CEO Elizabeth Muller , uses horizontal drill hole technology to safely isolate spent nuclear fuel under geologically stable and impermeable rock. The tech offers a solution that is both safe and lower cost than other options on the market.?
Conclusion
Nuclear energy could be a much needed energy solution, particularly for the tech sector grappling with immense energy demands. It’s clear there is growing confidence in nuclear as a viable and sustainable option. As data centers and AI continue to evolve, embracing nuclear power not only ensures a cleaner future but also lays the foundation for reliable and affordable energy infrastructure.
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Brookfield Renewable and 微软 to Develop 10.5 GW of Renewables
This partnership is a commitment from both companies to grow their sustainable energy capacities and support global decarbonization efforts. That’s almost eight times bigger than the largest single corporate PPA ever signed.
Pittsburgh Airport Plans $1.5 Billion Hydrogen Hub
KeyState Energy , CNX Resources, and Pittsburgh International Airport are collaborating on a $1.5 billion hydrogen and sustainable aviation fuel hub at PIT. This facility will be capable of producing up to 68,000 metric tons of hydrogen or 70 million gallons of SAF annually.?
Plug Power Secures $1.66 Billion for Hydrogen
Plug Power has secured a $1.66 billion conditional loan guarantee from the U.S. Department of Energy to develop their clean hydrogen production pipeline. The company plans to build and operate up to six facilities across the U.S. with this funding. The hydrogen will be used in a variety of sectors, including material handling, transportation, and heavy industry.
For the latest in energy, keep an eye out for next month's Climate Buzz!
Peter, in addition to the recent Oklo Inc IPO there is also the Nano Nuclear Energy Inc. IPO. I would also call attention to the recent announcement by Texas A&M University https://today.tamu.edu/2024/05/29/texas-am-university-system-to-bring-nuclear-reactors-to-rellis/ . Nuclear in the US suffers from a number of self-inflicted wounds, mostly around massive cost overruns which reflect a number of issues including the "bespoke" nature of each, the lack of experienced construction teams, and the delays from regulation, permitting and litigation. There is also the "fear factor" of nuclear. Many of the "strategies" for energy that are being advanced start with an assumption of scarcity, and I think that is wrong. Energy needs per-capita, even accounting for efficiency, are going to continue to expand. Energy needs in the developing world will likely expand faster as a growing middle-class adopts a higher energy lifestyle and economy. Energy must be plentiful, reliable, safe and affordable and small nuclear will be a part of that mix. It may be that commercial & industrial players lead the way on this with private capital taking the risk.