Big Tech has made big news these last few months by making some sweeping changes in energy procurement. Several companies are looking to nuclear power and away from renewable sources to fuel their exponentially surging energy needs. The fact that they have initiated their own plans for a specific energy source, while inadvertently rejecting others, is quite telling.
In September, Oracle announced it would power a new data center with three small modular reactors (SMR), which are advanced nuclear reactors. Microsoft created quite a buzz when it declared its intention to revive Three Mile Island to power several of its data centers. Last month Google announced plans to utilize SMRs for its energy needs, and only two days later Amazon reported they will do the same. More are sure to follow.
Most of these companies have set rather ambitious climate goals, either promising to drastically reduce carbon emissions or be 100 percent net-zero at some point. However, it is becoming increasingly challenging in today’s energy landscape.
The U.S. has accelerated its push for more renewable energy production, especially with aggressive renewable portfolio standards in certain states and passage of the subsidy-filled Inflation Reduction Act. Regulations have also been enacted with the intent to close fossil fuel power plants (as well as nuclear) and prevent new ones from opening. These decisions are begetting problems and proving that renewable forms such as wind and solar are simply not the cheap and reliable sources their proponents claim them to be.
According to the North American Electric Reliability Corporation’s (NERC) most recent long-term reliability assessment, risks of blackouts are increasing across America because of the various energy mandates. Potential energy deficiencies are “projected in areas where the future resource mix could fail to deliver the necessary supply of electricity under energy-constrained conditions.” Wind and solar are known to be intermittent and not entirely dependable.
Skyrocketing electricity prices are affecting many states whose energy portfolios contain large portions of renewables. The baseload backup power and extensive transmission that wind and solar require are quite costly.
Neither of these predicaments will bode well for the tech industry’s power-hungry data centers that need affordable, 24/7 electricity. They are some of the most energy-intensive building types, consuming 10 to 50 times the energy per floor space of a typical commercial office building, or as much power as 80,000 households. With the rapid innovation of artificial intelligence (AI), their overall energy use is likely to more than double from 17 GW in 2022 to 35 GW by 2030. Forecasts indicate that U.S. data centers will consume 6% of the country’s total electricity by 2026.
The CEOs of big tech companies have reason to be concerned regarding future power generation. Without adequate power, there is no industry growth. Tech leaders overlooking the socially favored wind and solar to fuel pressing energy needs should not go unnoticed. These sources can certainly augment our energy mix, but the rate at which we are implementing them should be reevaluated. Renewables are clearly struggling to keep up. Nuclear, on the other hand, is a very appealing option and is a superior energy source to wind and solar.
Nuclear has the highest capacity factor of all the energy sources (amount of electricity a generator can produce when it’s running at full blast) at 93. Wind and solar come in last, at 35 and 25 respectively. It is the second safest form, the cleanest, and cheaper than both wind and solar. These latter forms are also not as clean as we are made to believe.
Market forces are insisting we reexamine some of our energy priorities. The U.S. currently houses one-third of the world’s 8,000 data centers, and if we want to continue to dominate in the AI space, we need to rethink how we supply energy. It will likely involve discussions beyond nuclear; natural gas—which is plentiful, affordable, dependable, and readily available—is another ideal source, even though it may not be politically popular. However, with rapidly increasing energy demand, these two sources will need to take precedence.
Big Tech can decide how they want to reach carbon neutrality and remain relevant and competitive in the digital age. It should be clear which forms can lead them closer to those goals.
Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.orgor follow us on Twitter @ConsumerPal.