The rapid growth of AI has created a surging demand for data centers. Tech giants like Microsoft, Google and Amazon are seeking reliable, low-carbon electricity to power future data processing hubs. Recent announcements, such as Microsoft’s repowering of Three Mile Island (TMI), Google’s backing of small modular reactors (SMRs) and Amazon’s plans to follow with its own SMR buildout, are paving the way for a nuclear resurgence.
EIR assessed the recent agreement with Microsoft and Constellation Energy to recommission the ~835 MW TMI reactor by 2028 under a 20-year PPA amounting to more than $100/MWh. While other options compete on reliability and scalability, the costs for low carbon intensity vary significantly. A natural gas plant with CCS seems cheaper on paper, but risks related to technology, geography and infrastructure make it less favorable compared to the TMI deal. For a gas plant and grid power, using voluntary carbon dioxide removal credits to offset emissions is expensive, making them uneconomic at the proposed PPA price. Repowering the TMI site benefits both Constellation and Microsoft as the power costs are lower compared to other options and it sets precedence to restart other decommissioned plants.
Research Highlights
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- Nuclear in Its AI Era – Three Mile Island Restart – Analysis of the deal struck between Constellation Energy and Microsoft to restart the TMI Unit 1 nuclear reactor.
- Global Energy Transition 3Q24 – Throttled by Infrastructure – This report reviews the differentiated investment and deployment strategies for energy transition technologies in our global coverage regions.
- Natural Gas-Fired Screening – Benchmarking Prime Development Regions – We build on Enverus Intelligence® Research’s solar, battery storage and onshore wind market analyses to identify top locations for natural gas-fired projects in the U.S. Our screening considers factors like power prices, gas feedstock costs, spark spreads, capacity market prices, changes in the generation mix, load growth, cost of entry via acquisition and carbon prices.
