In recent years, the exploration for renewable energy sources to replace fossil fuels has significantly increased. Advances in solar and wind technologies have convinced many to invest in these to reduce GHG emissions, while advanced battery technologies are fueling transitions to electric vehicles. But these alone are not enough to achieve zero emissions goals of companies and countries. In this regard, nuclear energy has received renewed attention. However, this isn’t the only driver for revisiting nuclear power. Massive AI power consumption is a growing facet of our energy needs, and it is precisely this motivating factor that recently led Microsoft to pursue the reopening of the Three Mile Island nuclear plant.
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Naturally, the reopening of the Three Mile Island nuclear plant raises many concerns–Three Mile Island was the site of the nation’s worst nuclear plant mishap. Nearly half a century ago, a partial meltdown of a nuclear reactor released a significant amount of radioactivity into the area. As such, the plant was closed. But amidst the growing need for AI power consumption, Microsoft made a deal with the nuclear plant’s owner, Constellation Energy. Certainly, safety worries abound based on these recent events, but they’re not the only ones. Many believe the Microsoft deal is detrimental to the energy needs of communities that will be subsidizing these developments. And this fails to address bigger problems like the sustainability of AI electricity requirements. Renewable energy is good, but whether the reopening of the Three Mile Island nuclear plant remains to be seen.
The Microsoft – Constellation Energy Deal
While the specific details of the Microsoft-Constellation Energy deal remain undisclosed, it’s nonetheless important. What is known is that Microsoft will receive 100% of the energy produced by the reopening of the Three Mile Island nuclear plant. This will be used to support the company’s needs for AI power consumption. The deal will last for a total of 20 years. It is estimated that it will take Constellation Energy four years to get the facility ready with an opening date of 2028. Effectively, the plant has been non-operational and decommissioned since 2019. If all goes well, the nuclear plant could generate roughly 835 megawatts, which would normally power about 800,000 homes. But in this case, Microsoft will be the sole beneficiary of any energy produced.
While AI power consumptions needs are clear, the deal between Microsoft and Constellation Energy is far from a given. The Nuclear Regulatory Commission will have to approve the reopening of the Three Mile Island nuclear plant. This alone is a major hurdle since a decommissioned facility has never been approved for reopening. In addition, a recent request for another facility via an Amazon and Talen Energy deal was denied by the same commission. This was due to safety concerns, which will likely be an issue with the reopening of the Three Mile Island nuclear plant. If approved, however, it would bring about 3,400 new jobs to the Pennsylvania region. It would also generate about $3 billion in tax revenues for the state and federal government. These benefits could be enough for approval if deemed safe.
Taxpayer Controversies Surrounding the Deal
The costs involved in the reopening of the Three Mile Island nuclear plant are tremendous. Estimates by Constellation Energy suggest costs could exceed $3 billion in total. In order to make this a feasible deal, government subsidies will be needed. Under the Inflation Reduction Act, such subsidies are available for investments in renewables including nuclear power. The legislation allows for a tax credit for every megawatt hour of energy produced. This could reduce development costs by as much as half according to some experts. This could be a great way to reduce costs for energy production needed for AI power consumption. But at the same time, it’s creating renewable energy that communities won’t ever use. Notably, this is a point of contention for some.
(Check out this breakdown of the Inflation Reduction Act, courtesy of Bold.)
From Microsoft’s perspective, they naturally disagree that their efforts would undermine consumer energy access. They argue that reopening the Three Mile Island nuclear plant would alleviate current strains on existing power grids. As a result, consumers would have greater access to electrical power, not less. But given the seemingly insatiable AI power consumption needs, there’s no guarantee that nuclear power and grid power may not be utilized for AI. The biggest complaint is that the subsidies being potentially awarded to the deal directly come from taxpayers. Since taxpayers wouldn’t reap any benefits, communities argue that tax credits like these are unfair. Between this and opportunity costs for communities to access nuclear power, many see the Microsoft and Constellation Energy deal as wrong.
Solving or Contributing to the Energy Problem
On the one hand, some might say that the tremendous AI power consumption is a good thing for renewable energy development. Despite the fact that it might be taking opportunities from communities, it is also encouraging research and new innovations. This is particularly true for the nuclear energy resurgence and the reopening of the Three Mile Island nuclear plant. In fact, AI power consumption needs are pushing R&D in testing smaller module nuclear reactors. These smaller reactors could be placed adjacent to AI systems to fuel the enormous AI power needs. These same pressures are also encouraging companies like Microsoft to advance nuclear fusion technologies as well. In this regard, there are some potential upsides.
However, there’s another perspective worth exploring, and it’s one related to sustainability. While companies are in heated competitions for generative AI advancement, many believe the race for AI is far from sustainable. Instead of seeking our renewable energies to fuel its energy appetite, different solutions should be explored. This includes being more responsible in how AI is trained and advanced based on AI power consumption demands. Beyond the reopening of the Three Mile Island nuclear plant, these are the larger issues looming over AI energy needs. With this in mind, it’s understandable why opening of Three Mile Island is controversial.
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