DOE: Advantages and Challenges of Nuclear-Powered Data Centers

The Office of Nuclear Energy, part of the U.S. Department of Energy, recently published the following explainer of nuclear-powered data centers:

We are living in the data center revolution.

Nearly everything in our lives is now linked to the vast architecture of information crisscrossing the planet, including our work, our communication, our banking, and our entertainment.

With the rise in data centers has come rising energy demands.

Artificial intelligence and machine learning technologies require tremendous amounts of stable electricity generation, and some reports estimate that data centers could consume up to 12% of total U.S. energy production in 2028.

So, how are we going to meet those needs?

Nuclear has the potential to be a great partner for the data centers of today and tomorrow — but there are some hurdles to clear.

Read on for the advantages and challenges of powering data centers with nuclear energy.

Advantages of Nuclear Energy for Data Centers

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1. Nuclear energy provides 24/7 power.
Data centers never sleep, and neither do nuclear plants. Nuclear operates at full capacity more than any other energy source and provides electricity around the clock, day in and day out. The constant, firm power that nuclear generates fits perfectly with the 99.999%+ energy reliability needs of data centers.

2. Nuclear plants rarely need to shut down.
Downtime at a data center can be expensive — over $8 million per day, by some estimates. Current nuclear plants operate 18 to 24 months at a stretch and refueling outages typically last only a few weeks. Those outages are planned far in advance, so alternate power sources can be arranged to minimize data center interruption. New high-burnup accident tolerant fuels currently being tested could extend fuel cycles even further, and some advanced reactor designs in development aim to operate as long as 10 years without refueling.

3. Nuclear reactors are flexible.
Not all data centers are the same. Current designs range from 10 megawatts to 1 gigawatt in power consumption, and future data centers could reach 4 gigawatts or more. Next-generation reactors could meet those power needs with versatile, scalable designs ranging from transportable microreactors to small modular reactors to large-scale light-water nuclear plants.

4. Nuclear energy costs are stable.
Most of the costs for nuclear power come from capital and labor, which are relatively steady. Uranium fuel prices fluctuate worldwide but account for a small percentage of total costs. Steady prices from power purchase agreements and the long lifespans (80+ years) of nuclear plants give nuclear an edge when it comes to long-term business planning for data centers.

5. Nuclear energy is compact.
The advanced reactors of today and tomorrow will be designed with a small footprint and passive safety features that could allow them to be built alongside data centers, reducing transmission costs. Smaller reactors could even provide grid-independence for security-critical AI data centers and military infrastructure.

6. Existing nuclear plants have hidden potential.
Bringing retired nuclear plants back online is one potential way to power data centers without the cost of building a new plant. In September 2024, Microsoft and Constellation Energy reached a 20-year power purchase agreement to restart Three Mile Island Unit 1 to support Microsoft’s data center operations. Some companies have even begun exploring placing data centers at or adjacent to existing nuclear plants for maximum efficiency and cost savings, including the Susquehanna Steam Electric Station in Pennsylvania and Surry Nuclear Power Plant in northern Virginia.

Challenges of Nuclear Energy for Data Centers

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1. New reactors will take time to build.
Numerous designs for next-generation reactors are currently in the works, but only the Westinghouse AP-1000 has been built thus far. Licensing, demonstrating, and deploying additional reactors will take years. Progress is underway on the two main DOE Advanced Reactor Demonstration Projects (TerraPower in Wyoming and X-Energy in Texas), and widespread commercial reactors are likely to arrive in the 2030s. In the meantime, energy generation for data centers in the near-term future will primarily come from natural gas, coal, wind, and solar, and existing nuclear power plants.

2. First-of-a-kind reactor deployments are expensive.
Most of the costs of nuclear plants are up-front capital construction costs. Initial deployments can carry a high price tag, posing a potential barrier to nuclear energy ramping up to power the data center revolution, but factory fabrication and modular construction will be used by many advanced reactor designs to help reduce construction and scheduling costs significantly.

3. Metering issues could be a hurdle.
In March 2024, Amazon and Talen Energy announced a $650 million deal to purchase a co-located data center and up to 960 megawatts of electricity from the Susquehanna Steam Electric Station. However, efforts to add more power “behind the meter” were placed on hold by the Federal Energy Regulatory Commission over concerns that such deals could allow data centers to benefit from transmission systems without paying for them, potentially raising costs for utility customers. Future efforts will need to navigate this new territory.

4. The nuclear fuel supply chain is under construction.
The United States is working to secure a domestic supply of uranium fuel to power the reactors of the future — particularly high-assay low-enriched uranium (HALEU), which is required for many advanced reactor designs. DOE is supporting efforts to build the infrastructure this country needs to scale up nuclear fuel production, increase our national and energy security, and reduce energy costs and reliance on less secure foreign sources of uranium.

5. Spent nuclear fuel must be stored.
This isn’t a data center-specific challenge, but spent fuel is created as the result of nuclear power generation. It needs to be cooled after use in a reactor and stored until an interim or permanent disposal pathway is established. Today, the nation’s spent nuclear fuel is held safely and securely at nuclear power plant sites across the country. Advanced technologies like fast reactors and high-burnup fuels could one day reduce or potentially eliminate much of this waste by using more of the potential energy stored in the fuel.

Looking to the Future

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The Trump Administration is taking steps to unleash American energy dominance and secure our leadership in AI by leveraging federal land and assets. DOE is working to remove barriers to co-locating data centers with new generation sources like nuclear power, while also providing reliable and affordable energy for American citizens.