A nuclear power plant that had a nuclear leak 45 years ago will be restarted because AI consumes too much power.

In 1979, a major accident occurred in Unit 2 of the Three Mile Island Nuclear Power Plant near Harrisburg, Pennsylvania, where part of the core melted down, resulting in the release of radioactive materials.

The cleanup of this accident continued until 1993, and Reactor 1, located next to Reactor 2 of the Three Mile Island Nuclear Power Plant, did not resume operations until 1985. However, under the influence of cheaper natural gas, wind energy, and solar energy, Reactor No. 1 was also announced to be permanently closed in 2019.

But now, the Three Mile Island Nuclear Power Plant is being resurrected under the new name of the Crane Clean Energy Center.

Microsoft announced in September that it had signed the largest power purchase agreement in history with Constellation Energy, and will purchase 100% of the electricity produced by the Three Mile Island Nuclear Power Plant in the next 20 years to support Microsoft's AI Data centers and cloud services operate.

According to statistics from the Wall Street Journal, technology giants that have invested heavily in AI are currently negotiating cooperation with nuclear power plant owners, involving about one-third of the nuclear power plants in the United States.

In early October, Google said it had signed an agreement with Kairos Power and planned to purchase power from 6-7 proposed small modular nuclear reactors with a total capacity of 500 megawatt hours; in March this year, Amazon It bought a nuclear power-driven data center for US$650 million; Oracle also announced that it is designing a data center powered by three small modular nuclear reactors.

Picture: U.S. technology giants accelerate their deployment of nuclear energy Source: Soochow Securities

This has been transmitted to the secondary market, and nuclear energy stocks have risen in response recently. Among them, Vistra has become the best-performing company in the S&P 500 Index this year, with its stock price rising by 303.53%.

How much power does AI consume? There are reports that during a training process, the GPT-4 GPU alone consumes 240 million kilowatt-hours of electricity. This does not include the energy consumption of the chip's supporting facilities, including servers and cooling equipment.

When users use ChatGPT, they also need to consume a lot of power. The New Yorker magazine previously reported that it is estimated that ChatGPT’s daily electricity consumption may exceed 500,000 kilowatt hours, which is equivalent to 17,000 times the average electricity consumption of American households.

Bank of America Merrill Lynch pointed out in its research report that AI power usage in the United States is expected to grow at a compound annual growth rate of 25%-33% between 2023 and 2028, much higher than the overall power consumption Demand is a compound annual growth rate of 2.8%.

It can be seen that as data centers continue to expand, the US power grid infrastructure, which was mostly built in the 1960s and 1970s, is under unprecedented pressure - technology companiesGradually, I found that I bought more and more cards, but the power was not enough.

In order to compete for limited access to the power grid, a number of technology companies have deployed data centers in areas with underdeveloped technology industries such as Ohio and Iowa to obtain stable power supply.

Elon Musk predicted in March this year that there will not be enough power to run all the chips next year.

Therefore, with its high efficiency and stability, nuclear power has become an important direction for technology companies to ensure their own power supply.

Data from the U.S. Energy Information Administration (EIA) shows that nuclear power has a capacity factor of 93.1%, which means that it operates at maximum power more than 93% of the time. In addition, nuclear power plants can provide 24/7 baseload power regardless of factors such as weather, cycles, regions, and seasons.

The CICC Research Report pointed out that nuclear power has an energy density advantage that is unmatched by other types of units: the energy released by the nuclear fission of 1 kilogram of uranium-235 is approximately equivalent to 2,700 tons of standard coal or 1,700 tons of crude oil.

Figure: Changes in hours of utilization of different types of electricity; Source: CICC Research Report

More importantly, as an important raw material for nuclear power plants, low-cost uranium resources are very scarcity, which further shortens the optimal time window for technology companies to deploy nuclear power plants.

The research report of Huayuan Securities pointed out that the natural uranium industry is highly concentrated and low-cost uranium resources are relatively scarce and mainly come from Kazakhstan. In August this year, Kazatomprom, the world's largest uranium miner, drastically cut its production plan for next year. In addition, Kazakhstan also plans to gradually increase the mineral extraction tax on uranium mining to 9% in 2025, and to 18% starting in 2026.

As technology companies pursue nuclear power, the development of small modular reactors (SMRs) has received more attention from the market and is considered to be more flexible and close to the market Nuclear power solutions for your needs.

CITIC Securities’ latest research report points out that SMR capacity is generally 15MW to 300MW. The reactor size is smaller and more flexible. Compared with traditional large-scale nuclear power plants, construction and operation and maintenance costs are lower, making it more suitable for Power the data center.

Amazon’s investment actions are a benchmark for the industry. In October this year, Amazon and Google reached a landmark power supply agreement to promote the deployment of the first SMRs in the United States. In addition, Oklo, a nuclear power company invested by OpenAI CEO Sam Altman, plans to put several SMRs into use by 2030.

Affected by this, the stock prices of SMR developers have also risen. Shares of NuScale and Oklo have risen 249% and 259%, respectively, over the past three months.

However, the performance of NuScale and Oklo, which are highly praised by the capital market, is obviously in line with their stock prices.Departure. The third quarter financial report shows that NuScale's sales fell 93.2% year-on-year to US$475,000, with a net loss of US$45.5 million; Oklo's loss per share was eight cents. Since the beginning of the year, Oklo's operating loss has reached US$37.4 million.

Short-seller Kerrisdale Capital described Oklo as a "story stock": no revenue for years, no design approved by regulators, and no proven commercial viability for its planned SMR.

Oklo previously stated that it would deploy its first reactor in 2027, but in fact, achieving this goal depends largely on the speed of approval by the U.S. Nuclear Regulatory Commission (NRC). Kerrisdale cited a former NRC commissioner who said Oklo's timeline was too optimistic and that just obtaining the permit "will probably take at least four years."

“In typical SPAC fashion, Oklo promoted exaggerated unit economic benefits to the market while seriously underestimating the time and capital required to commercialize its products.” Kerrisdale Capital said.

Although SMR is regarded as a new hope for the development of nuclear power, SMR is still questioned by the market due to the uncertainty of completion on time and on budget, as well as high interest rates and a shortage of customers willing to underwrite projects.

NuScale’s SMR project in Idaho was canceled late last year after the cost ballooned from $5 billion to $9 billion, under the weight of rising interest rates and inflation. Earlier, private SMR developer X-Energy terminated its merger and listing plan with Ares Acquisition Corporation, citing "tough market conditions."

TD Cowen analyst Marc Bianchi pointed out that the dilemma facing the SMR industry is that customers are unwilling to contract for the "No. 1 reactor" because it is more expensive and risky than building subsequent reactors.

“The only limiting factor for the United States to continue to maintain its leadership in artificial intelligence is electricity. Not land, not chips, but It’s electricity. So that’s the primary goal,” Clay Sell, CEO of X-Energy, an American SMR developer, once said.

For today’s AI arms race, the bottleneck is no longer chips, but electricity. To this end, the United States is on the verge of promoting a "nuclear power renaissance," but there are many flaws in the many plans and goals launched for nuclear power.

According to the roadmap recently announced by the White House, by around 2050, the United States will deploy an additional 200GW of nuclear power capacity by building new reactors, restarting nuclear power plants and upgrading existing facilities. The short-term goal is to bring 35GW of new capacity into operation within more than ten years.

However, despite the grand plan, the beautifulSuccessive Chinese governments have made “big noises but little rain” in promoting the development of nuclear power. Policies to support nuclear power have been proposed many times, but most of them have failed to achieve actual advancement. Whether it's a new build, a restart, or an upgrade, it's never easy.

For the United States, although the Three Mile Island Nuclear Power Plant accident did not cause any casualties, as the first core meltdown in the history of human nuclear energy development, this accident completely broke the "absolute safety" of nuclear power plants. The myth became a turning point in the development of nuclear power in the United States.

Although the United States still retains its advantage from a technological perspective, its infrastructure construction capabilities have dropped significantly compared with its peak.

According to data from the U.S. Energy Information Administration, from 1979 to 1988, 67 planned nuclear reactor construction projects were canceled. In July last year, Unit 3 of the Vogtler Nuclear Power Plant in Georgia, USA, was officially connected to the grid to generate electricity. It was the first nuclear power unit built in the United States in more than 30 years and the first nuclear power unit to be connected to the grid in seven years.

The Associated Press pointed out that with the successive commissioning of Units 3 and 4 of the Vogtler Nuclear Power Plant, there are currently no nuclear power plants under construction in the United States, and the Vogtler Nuclear Power Plant has also become the first nuclear power plant in the United States to enter the 21st century. The only commercial nuclear power project launched and continued to be implemented since then.

Precisely because the scale of nuclear power units has been unable to expand, technology companies have begun to turn their attention to closed nuclear power units.

Unfortunately, in the United States, projects that meet the conditions for "resurrection" like the Three Mile Island Nuclear Power Plant are very rare. Relying on the resumption of decommissioned nuclear power plants cannot fundamentally solve the problem.

Another hidden concern in the development of nuclear power in the United States is the aging of nuclear power plants currently operating in the United States. Data from the U.S. Energy Information Administration (EIA) shows that as of April 30, 2024, the average age of commercial nuclear power reactors in operation in the United States is approximately 42 years.

Picture: Most of the U.S. nuclear power units were completed and put into operation in the 1970s; Picture source: U.S. Energy Information Administration

The aging of equipment not only significantly increases safety risks, but also reduces operating efficiency. dropped and maintenance costs increased significantly. How to gradually replace these old reactors while accelerating the construction of new generation reactors has become an urgent problem for the U.S. nuclear power industry.

After all, in addition to the long development cycle, huge upfront investment and risk of overruns, the construction of nuclear power plants also requires complex approval processes and faces continued public doubts and concerns about nuclear safety and nuclear waste management. This makes the construction of new nuclear power plants difficult.

The road to nuclear power is still full of variables.