Big tech is helping to solve a “big problem” for the nuclear power industry, according to energy consultancy Wood Mackenzie.
Tech titans including Amazon (AMZN), Google parent Alphabet (GOOG), and Microsoft (MSFT) are ramping up investments in nuclear power to meet their growing energy needs without increasing their carbon footprint.
Recent moves include Google and Amazon’s respective announcements last week involving small modular reactors (SMRs) to provide power for data centres and artificial intelligence. These follow a deal last month between Microsoft and Constellation Energy (CEG) to restart a Three Mile Island nuclear reactor that has remained offline since 2019.
While governments from Japan to South Korea to California have made policy u-turns in recent years to embrace nuclear as a source of clean energy, Wood Mackenzie says utilities have been largely unwilling to pay up for pricier power from reactors.
“Its big problem has been that until now, there have been no buyers willing to pay premium prices for 24/7 carbon-free power,” Wood Mackenzie senior vice-president of thought leadership for the Americas, Ed Cooks, wrote in recent research.
He calls deep-pocketed tech companies “the customers the nuclear industry has been looking for.”
Wood Mackenzie estimates the levelised cost of energy from a new SMR could be US$200 per megawatt hour. That’s four times as much as utility-scale solar, and three times as much as a new combined-cycle gas turbine plant.
While SMRs are still in their infancy and likely to face challenges like any new technology, Cooks says the global list of projects has more than doubled since Wood Mackenzie started tracking it in 2021.
“A pathway is emerging for advanced nuclear power to play a greater role in energy supply in the U.S. and globally in the 2030s and beyond,” Cooks wrote. “Nuclear power enjoys bipartisan support across the political spectrum in the U.S., because of its importance both for climate policy and for national security.”
One stumbling block could be a clash between the fast-moving tech industry and the typically sluggish pace of nuclear deployment.
“The great drawback of nuclear from the tech companies’ standpoint is how long it takes to bring new capacity online,” Cooks added.
“The shortest possible ‘time to power’ is important.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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