- Despite global momentum, data center operators in APAC remain hesitant to adopt nuclear energy
- Regulatory uncertainty, geopolitical sensitivities and public perception are key challenges
- Butthe APAC data center industry may find it hard to ignore nuclear energy as AI demands rise
The Asia-Pacific (APAC) data center industry is taking a cautious approach to nuclear energy as a power source, even as the generation technology gains global momentum to help meet soaring energy demands driven by AI workloads. Regulatory uncertainty, geopolitical concerns and public perception are some of the key challenges the technology faces in the region.
“Nuclear energy is probably one of the most sustainable ways of powering data centers, but there are many, many hurdles to pass,” said Rajaneesh Kurup, director of segments and GTM, Asia-Pacific and Japan at Equinix. “Reluctance to use it as a form of energy is there because of the word nuclear … that’s the reality.”
The negative connotation surrounding nuclear is largely due to massive accidents in the region’s recent history, such as the Fukushima Daiichi incident, as well as the use of nuclear technology in warfare.
This conflicts with the approach adopted by global technology players, such as Amazon Web Services (AWS), Google, Meta and Microsoft, who have announced nuclear projects recently.
For instance, Google has partnered with Kairos Power on the construction of small modular reactors (SMRs), with the first one planned for 2030. Meanwhile, AWS teamed with Dominion Energy, a utility company, to develop SMRs near Dominion’s existing North Anna nuclear power station in the state of Virginia. Elsewhere, Microsoft is working with Constellation Energy to restart reactors on Three Mile Island in Pennsylvania.
Just last week, Meta inked a 20-year nuclear power purchase agreement with a facility in the state of Illinois.
Lagging regulation and geopolitical concerns
Another key reason for data center operators to adopt a conservative approach to nuclear energy in the APAC region is the lack of regulatory clarity.
“We have to work closely with the government, even if we would like to pilot an SMR. We also have to be mindful of the perception of our neighboring markets," Manoj Prasanna Kumar, CTO at Singtel Digital InfraCo, told Fierce. Singtel Digital Infraco operates several data centers in Singapore, Thailand and Indonesia through its regional data centers unit, Nxera.
"So, I would say we are thinking about different forms of renewable energy like carbon capture or SMRs, but it will take time," he added.
Thats said, there is headwaybeing made in some markets. For instance, Singapore signed a Civil Nuclear Cooperation Agreement with the U.S. last year. Earlier this year, Singapore’s Prime Minister mentioned that the country will study the potential deployment of nuclear power in the country. In addition, India’s Finance Minister also announced in the Union Budget earlier this year the goal of generating 100 GW of nuclear energy by 2047.
Beyond regulatory issues, geopolitical and waste disposal concerns are also slowing the adoption of nuclear power in the region’s data center industry.
“Everybody is a little bit cautious about adopting nuclear energy as a power source for data centers. As one of my industry colleagues mentioned, there are issues involved in the adoption of nuclear energy, including what your neighbors think politically," said Toby Stapleton, VP of APAC development at NTT Data." This topic gets talked about a lot in the industry."
Elsewhere, nuclear is taking off
While nuclear energy has been around for decades, the emergence of SMRs has brought it back into the limelight. SMRs are more compact, cost-effective, flexible and scalable than traditional nuclear reactors.
There are also market forces working in favor of nuclear energy. As the demand for AI surges in all geographies, not only is pressure growing in existing energy sources, but there is a greater pressure on the data center industry to adopt renewable and carbon-free power sources as much as possible.
Global power demand from data centers is set to double by 2030 to 945 TWh, according to the International Energy Agency (IEA).
As data centers in APAC deal with rising AI workloads and energy needs outpace the current grid capabilities, pressure will continue mounting on the industry to overcome regulatory and perception-based roadblocks to employ nuclear power.