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Utilities are eyeing small modular reactors as a way to boost grid capacity in the face of rising demand from data centers and industry
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SMRs offer greater siting flexibility than traditional nuclear plants but still have stringent permitting requirements
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Most utilities are projecting SMRs will become part of the grid in the 2030s
Data centers have a fever, and the only prescription is more power. Sorry, more cowbell won’t help here. But nuclear power might.
Several data center operators – including executives from Digital Realty, DataBank and T5 – have recently told Fierce they’re eyeing nuclear solutions (specifically small modular reactors or SMRs) for on-campus power generation, while others like PowerHouse Data Centers said they aim to place their facilities in areas with a strong nuclear power mix to keep carbon emissions low.
Standard Power, which provides colocation and server management services, inked a deal with SMR vendor NuScale Power late last year to develop a pair of nuclear-powered data center facilities in Ohio and Pennsylvania. These are expected to be operational by 2029.
But how are utilities – the companies powering data centers today – thinking about using nuclear power to meet future demand?
We took the question to Dominion Energy, which supplied power to the largest data center market in the world: Northern Virginia. Over the past five years, it has connected 94 data centers with more than 4 gigawatts of capacity. And in 2024 it expects to connect another 15 data centers.
Todd Flowers, the company’s director of business development, said Dominion has been exploring SMR technology for about four years now. While the utility already has four traditional nuclear facilities on its grid, he noted it is eyeing SMRs as a way to incrementally increase capacity relatively faster and cheaper than it could by adding another traditional plant.
And it’s not alone. Integrated Resource plans from Duke Energy in the Carolinas and the Salt River Project in Arizona both mention the projected use of SMR technology starting in the 2030s (for its part, Flowers said Dominion thinks its first SMR could be up and running by 2033). And the Tennessee Valley Authority recently teamed up with Canada’s Ontario Power Generation to invest in GE Hitachi’s SMR tech.
“All these utilities are recognizing tremendous needs and new power generation requirements,” he said. "I think it's recognized that SMRs will be needed if we one, want to meet the load demands going forward and two, if we want to decarbonize."
What’s so special about SMRs?
Flowers noted SMRs typically provide around 300 megawatts of capacity, making them a good match for demand from data centers.
On Dominion’s Q1 2024 earnings call last week, CEO Bob Blue noted that historically a single data center demanded around 30 megawatts. Now, though, it’s taking requests for facilities seeking anywhere from double or triple that capacity up through 300 megawatts. It also gets outlier requests from data centers seeking “as many as several gigawatts.”
Flowers said SMRs also offer “tremendous flexibility” in terms of siting for several reasons. First, they take up less space – Flowers said initial deployments will likely require about 200-300 acres, but he expects that figure to fall to around 60-80 acres as Dominion learns more about how to build and run such facilities. That compares to the 800+ acres used by its traditional Surry nuclear plant and its 1,000+-acre Lake Anna site.
There have also been developments in nuclear technology that make SMRs safer and more scalable than their traditional counterparts. For instance, Flowers noted that old school reactors use regular water to slow the neutrons and cool the reactor. While some SMRs still use water, there are also advanced designs that use high temperature gas or molten salt (?!) to achieve the same ends.
“We’re looking at both those technologies. The advantages to some of the non-light water reactors is that they can ramp up and down more quickly,” he explained. “So, you have the flexibility to change the power output as demand may change, which has tremendous value in pairing this technology with renewables.”
The design tweaks made to SMRs also mean that they don’t require the traditional 10-mile emergency planning zone that legacy nuclear plants are required to accommodate.
“Physics could not allow there to be a scenario by which you would need to evacuate populations of people. That emergency planning zone contemplated for SMRs is at the site boundary,” he said. “The reactor core either cannot physically melt or the facility is placed in a condition such that there are no chances of any off-site scenario where public safety would be at harm.”
That said, SMRs are subject to extensive regulatory siting and licensing reviews that stretch deployment timelines. Womp-womp.
Flowers didn’t say who exactly Dominion is working with, but asked about what vendors are out there, he pointed to NuScale, GE Hitachi, TerraPower, X-energy, Kairos Power and Holtec International.
On-campus vs on-grid
While data center operators have mentioned SMRs in relation to on-campus deployments (aka, behind-the-meter), Flowers said initial rollouts of the technology are more likely to be done on-grid.
Why?
Well, for starters, data centers likely won’t want to rely solely on SMRs since they will eventually need to be refueled and the downtime required for that would be unacceptable. Plus, data centers would likely want a connection to the grid anyway to offload excess capacity generated by the SMRs to the grid if there is any.
Then there’s also the fact that this is still nuclear power we’re talking about.
“These are not like just building a typical turbine,” he said. “Given the licensing considerations, the expertise you need in nuclear operations – which is not to be taken lightly – it’s my opinion that the first facilities will be ones that are operated by people that have experience running nuclear power facilities. And that energy will flow to the transmission system and these data centers will be a beneficiary.”
All aboard?
Though many utilities are eyeing SMRs these days, there are still holdouts.
Southern Company (which owns Atlanta metro area electric utility Georgia Power) said recently it is at least temporarily satisfied with the traditional nuclear power plants it has just brought online after more than a decade of work.
CEO Chris Womack said on the company’s earnings call the Vogtle facilities are the “first new nuclear units built from the ground up here in the United States in over 30 years” and together supply more than 2,200 megawatts of capacity.
Womack said the company plans to “celebrate what we've done at Vogtle for a very long time before we give any consideration to anymore.” That said, he argued other utility companies should explore the opportunity because the U.S. is going to need more nuclear power.
“There's clearly no technology better suited to support demands of this increasingly digital economy and society. And so, I think the federal government has got to step in and provide great leadership to incent companies to move in that direction,” he stated. “This country has to look at new nuclear to go forward to meet this growing demand.”
Update 5/10/2024 9:30 am ET: This story has been updated to note that Dominion has four - not two - traditional nuclear facilities.