- U.S. nuclear policy lags even as the government pushes small modular reactor (SMR) exports abroad
- Data center power needs are rising, but domestic nuclear deployment remains tangled in red tape
- Lawmakers and industry leaders call for permitting reform
Arizona Senator Ruben Gallego went a bit off script during a private event hosted by Honeywell this week. But his tangent provided the perfect illustration of a critical issue that has data center operators not just frustrated but worried.
Gallego recounted that in mid-April he visited Slovakia and met with the country’s Prime Minister. He added that the current U.S. administration asked him to “push the government of Slovakia to buy American-made” small modular reactors (SMRs).
“The fact that it is the United States government’s position to be pushing American-made nuclear platforms overseas, but yet we haven’t changed the regulatory environment here in the United States to actually make a domestic market boggles my mind,” he said.
It’s true that the U.S. has been slow to deploy new nuclear facilities to boost power generation in the face of a wave of data center-driven demand for more electricity. Boston Consulting Group recently noted China, South Korea and the United Arab Emirates have all moved much more quickly and efficiently on this issue than the U.S.
Indeed, American nuclear companies seem to be having more success outside their home market than within it. For example, GE Hitachi just secured a permit to build its BWRX-300 SMR in Ontario, Canada. And Poland is chugging along with plans to deploy three of Westinghouse’s AP1000 reactors in the country’s first nuclear campus. Meanwhile, NuScale has inked MOUs and partnership deals with Romania, Poland and Bulgaria for its SMRs.
Nuclear rollout roadblocks
Those who HAVE given nuclear a go in the U.S. have faced a frustrating mix of schedule slippage, cost overruns and regulatory roadblocks. The latest example of the latter is Amazon.
The tech giant last year inked a deal to buy a data center campus from Talen Energy, which would have its energy supplied by an existing co-located nuclear plant. But its application to boost the amount of power flowing from the plant to the data center from 300 MW to 480 MW was denied by the Federal Energy Regulatory Commission (FERC). Twice.
The decision came as a surprise and doesn’t exactly bode well for other co-location deals between big nuclear facilities and data centers.
As for SMRs, which Amazon, Google and Microsoft are all pursuing, well, progress has been slow on that front as well for a variety of reasons. For instance, NuScale, which scored a certification from the Nuclear Regulatory Commission (NRC) back in 2022 which would allow its design to be built anywhere in the country, has yet to strike any commercial deployment agreements.
The answer, according to Gallego, is permitting reform. But that phrase is not a magic wand And effecting the desired change is much easier said than done.
A sea of red tape
To understand the problem in the U.S., you have to understand that there is no single authority that signs off on new nuclear plants. Though the NRC is the target of many people’s ire, it’s only one of several regulatory bodies – including the Federal Energy Regulatory Commission (FERC) and state-level regulators – that need to sign off on new builds, SMR or otherwise.
So, who controls what? Well, nuclear facilities requiring either water intake from or discharge into bodies of water like rivers and lakes will need state approval.
On the federal level, FERC is in charge of the country’s electrical grid and has authority over how power plants (including nuclear ones) connect into it. The NRC, meanwhile, is in charge of ensuring the safe design and operation of nuclear facilities.
In jargony terms, the line between FERC and the NRC’s jurisdiction is in the switch yard. Anything from the switch yard to the grid is FERC and anything from the switch yard to the plant is the NRC.
And for all that folks like Gallego and industry executives like to bang the drum on permitting reform, it’s worth noting that some is already underway on the federal level.
For instance, Congress last year passed the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act of 2024 (ADVANCE Act), which among other things pushes the NRC to speed its review process and lower certain fees it charges permit applicants. The bill was signed into law by President Joe Biden and thus far, according to a tracker on its website, the NRC has completed 11 of 25 objectives laid out in the legislation.
A new nuclear race is on
Will it all be too little too late? Wellll….
Data in a report issued by the International Energy Agency last month, showed that despite China’s recent rollouts, nuclear actually covers less of the data center electricity demand there (10%) than it does in the U.S. (15%).
The report forecast that as a base case between 2024 and 2035, global data center electricity consumption will spur the "installation of over 320 GW of additional electricity generating capacity between 2024 and 2035, including around 45 GW of battery storage, nearly 80% of it in the United States and China." Nuclear sources specifically are expected to contribute 175 TWh of additional power generation to meet data center demand, with China, Japan and the United States leading the pack.
“Nearly 20 GW of new nuclear capacity is commissioned between 2030 and 2035, mostly from SMRs in the United States and China,” the report states. “Nuclear power plays a significant role in meeting data center electricity demand in the United States, particularly after 2030 when the first SMRs are expected to be commissioned.”
So, maybe, just maybe, we’ll be ok.