The recent surge in demand for data centers, fueled by the rise of generative artificial intelligence (AI), has sparked interest in a new generation of nuclear power plants known as small modular reactors (SMRs). Shares of NuScale Power, a Nasdaq-listed SMR company, have more than doubled this year, and Bill Gates-backed TerraPower is set to start building new nuclear plants in June.
With power-thirsty AI driving electricity demand, ample electricity supply has emerged as the top priority for tech firms choosing locations for new data centers.
TerraPower, a nuclear engineering company founded by Bill Gates in 2006, recently applied for a construction permit from the U.S. Nuclear Regulatory Commission (NRC) for a license to build a Natrium reactor, which is cooled with liquid sodium rather than water, according to the energy industry on April 5. SK and HD Hyundai have invested $250 million and $30 million in TerraPower, respectively.
TerraPower announced plans to build a 345-megawatt (MW) Natrium demonstration plant near a retiring coal plant in Kemmerer. TerraPower CEO Chris Levesque said the company plans to begin construction in June. Once the nuclear power plant is constructed, it will generate enough electricity to supply around 250,000 households.
TerraPower’s Natrium technology features a sodium-cooled fast reactor with a molten salt-based energy storage system. SK is jointly promoting the commercialization of SMR technology with TerraPower, and HD Hyundai has dispatched an SMR research team to TerraPower.
SMRs have recently gained attention as the rapid growth of AI highlighted the importance of data centers powerful enough to process massive amounts of data. AI graphics processing units (GPUs) typically consume four times more electricity than cloud servers. Demand for electricity in U.S. data centers is expected to grow from 17 gigawatts (GW) in 2022 to 35 GW in 2030, according to global consulting firm McKinsey.
NuScale Power, backed by Doosan Enerbility and Samsung C&T, is also eyeing a comeback. NuScale Power had plans to build SMR units at a site in Idaho, but the project was canceled last November due to concerns over its economic feasibility. The company’s shares have since dropped by 80% from its peak. NuScale Power’s stock prices have somewhat recovered recently, along with the AI boom.
Doosan Enerbility and Samsung C&T, previously under scrutiny for their investments, are relieved to see share prices recover. Doosan Enerbility and Samsung C&T each invested $103.8 million and $70 million in NuScale Power, respectively.
“NuScale Power’s SMR project has been halted because the cost of building the reactors soared due to high interest rates and a slowdown in the economy, said an energy industry insider. “The need for electricity, fueled by AI, has brought SMRs back into the spotlight.”
This article was originally published on April 5.
