Microsoft, Three Mile Island Deal Delivers a Blow to Wind and Solar Power
A shuttered nuclear power plant in Pennsylvania, long associated with the nation’s worst accident involving atomic energy, is riding to the rescue of tech giant Microsoft, a company desperately in need of reliable energy for its growing network of AI-driven data centers.
Under an unprecedented deal announced Sept. 20 by the decommissioned nuclear plant’s owner, Constellation Energy, Microsoft would be the sole purchaser of Three Mile Island’s electricity, once the plant has restarted in 2028. Microsoft will receive its electricity from a reactor (shut down since 2019) that was not damaged in the 1979 Three Mile Island partial meltdown. The supply contract between Constellation Energy and Microsoft will run for 20 years and will require that the reactor undergo safety upgrades and receive regulatory approval before going into effect.
The voracious energy demands of data centers, driven by AI, quantum computing, and elaborate cooling systems, are upending energy markets and pose new challenges to the nation’s already shaky electric grid. Dominating the data center sector are Microsoft, Google, Meta, and Amazon Web Services, all of which plan to expand the number of data centers, which currently stands at 2,700 nationwide.
In keeping with their commitments to decarbonize their energy use, the Big Four have solemnly pledged to reach zero-emissions goals within a few years, but now find themselves in need of power – and lots of it – if they are to stay globally competitive with China in AI.
Longtime supporters of renewable energy, the Big Four are the nation’s largest purchasers of wind and solar power. But wind and solar power are intermittent, weather-dependent sources of electricity, and what data centers require is power 24/7/365. Microsoft’s Three Mile Island venture shows the company recognizes this, and is acting accordingly.
A Black Swan
In choosing nuclear power to support its data centers, Microsoft was able to tout its continuing commitment to achieve net-zero carbon-emissions at some point down the road. But it did so at the expense of wind and solar providers, which the company knows cannot deliver what the tech giant needs.
Pampered for decades by generous government subsidies and state mandates requiring utilities to derive a certain percentage of their electricity from renewables, wind and solar companies have led a charmed life. Political favoritism spared them the indignity of having to stand on their own two feet and compete in the marketplace. For them, however, the sudden spike in AI-driven energy demand is a black swan, an unexpected challenge they are uniquely ill suited to confront.
AI is projected to increase electricity demands from data centers by 50% by 2027, The Wall Street Journal reports Google has gotten the message and is also moving beyond the limited world of wind and solar and is planning to purchase geothermal electricity from a Nevada utility to power its nearby data centers. There is plenty of sun in the Nevada desert, but it doesn’t shine at night, making solar power of little use to energy-hungry Silicon Valley behemoths.
Other options under consideration by Big Tech include small modular reactors (SMRs), which produce nuclear power on site. Indeed, nuclear power, which appeared to be on its way out just a few years ago, could be on the cusp of a rebound. Given the shortage of nuclear engineers, the huge expense of constructing nuclear power plants, and seemingly interminable permitting delays, revitalizing nuclear power in the U.S. will take decades. In the meantime, SMRs, recommissioning shuttered plants, and extending the operation of plants set to be closed are looking like viable options.
The surge in electricity demand comes at a time when the Biden-Harris administration is still pushing wind and solar power while doing its dead-level best to cripple the fossil-fuel industry. Dozens of coal- and natural gas-fired power plants have been forced to prematurely shut down in recent years because of Environmental Protection Agency (EPA) regulations targeting greenhouse-gas emissions. The Biden EPA’s Clean Power Plan 2.0 requires coal and new or refurbished natural gas plants to install so-called carbon capture technologies by 2032. Carbon capture is unproven and economically infeasible, which will cause these plants to shutter, taking more baseline energy off line. Yet fossil fuels, particularly natural gas, can combine with nuclear power to provide reliable energy to data centers and the rest of the country.
Tilting at windmills – in this case wind turbines and solar panels – has been a preoccupation of the Biden White House and the climate cartel since Biden took office. Now, even its Big Tech allies are wising up to wind and solar power’s shortcomings. They recognize a simple truth: A full-time economy cannot run on part-time energy.
Bonner Russell Cohen, Ph. D., is a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).
