Robert G. Eccles was a tenured professor at the Harvard Business School. He is now with Said Business School at the University of Oxford. He was the founding chairman of the Sustainability Accounting Standards Board.
This Spring I attended a private conference on the energy transition that was hosted by a major bank. There I learned more about small modular reactors . This is a promising new nuclear technology for delivering carbon-free, baseload power to meet the world’s increasing energy needs.
SMRs are proving to be of crucial interest to the tech community which is focused on developing AI capabilities. AI is an insatiable energy beast.to a Goldman Sachs report, a ChatGPT query takes about 10 times as much electricity to process as a Google search. Today data centersfor 1-2% of the world’s energy needs, a figure expected to grow to 3-4% over the next decade. The major players here are Alphabet, Amazon, Apple, Meta, Microsoft, and NVIDIA. All of them, with the exception of NVIDIA, have a commitment to be net zero on Scope 1, 2, and 3 emissions by 2030, or 2040 in the case of Amazon.: “At Google, our goal is to achieve net-zero emissions across all of our operations and value chain by 2030.”: “Microsoft made ambitious commitments in 2020 to become carbon negative, water positive, zero waste, and to protect ecosystems – all by 2030.”: “By the end of FY25, and annually thereafter, we expect to achieve and maintain 100% renewable electricity for offices and data centers under our operational control.”Growing demand for electricity will make achieving these goals even more challenging. Renewable energy has an important role to play but alone it is not enough and has its own challenges. Nuclear generated electricity is the vital solution to decarbonization while meeting the fast-growing global electricity demand given the following three advantages over renewables:that “Nuclear power is the most reliable energy source and it’s not even close.” Here are the numbers for percent of capacity utilization: nuclear , natural gas , coal , hydropower , wind , and solar . This is especially critical for the operations of hyperscale data centers that require reliable baseload power with no intermittent issues. Other baseload energy sources are not carbon-free, making nuclear the only carbon-free baseload energy source.to the Nuclear Energy Institute “Nuclear also complements renewables because it generates more power with less land—31 times less than solar facilities and 173 times less than wind farms.”of a nuclear facility is much larger, 40-60 years compared to about 20 years for wind farms and 30 for solar ones. Microsoft has set the most ambitious targets in this group and is even more ambitious than a net-zero by 2030 goal. It has“to remove from the atmosphere an equivalent amount of all the carbon dioxide our company has emitted either directly or by our electricity consumption since we were founded in 1975.” Microsoft has also committed to be a leader in supporting SMR technology deployment as they see the importance for dealing with climate change and meeting Microsoft’s net-zero targets via SMRs. Satya Nadella, Chairman and CEO of Microsoft,that “the company is looking for a Principal Program Manager, Nuclear Technology, who will be responsible for maturing and implementing a global Small Modular Reactor and microreactor energy strategy.” Subsequently, as a clear sign of commitment, they have hired former Tennessee Valley Authority senior nuclear energy veterans Dr. Erin Henderson and Todd Noe to execute their SMR strategy on an accelerated basis.is betting nuclear power can help sate its massive electricity needs as it ventures further into artificial intelligence and supercomputing.” In a June 26, 2024and forming partnerships and signing power-purchase agreements with the leading players in this marketplace, so that when that power is online, we can bring it to power our data centers. They all have different time dates when they expect to be in the marketplace. We’re just simply saying when you come online, this is a clean carbon-free source of power that we would like to use.” One hurdle facing Microsoft is perceptions about nuclear power. Today there is a legacy of suspicion about nuclear power, heightened by well-known disasters such as the March 11, 2011, Fukushima Daiichi Nuclear Power Plant in Japan and the April 26, 1986, Chernobyl Nuclear Power Plant in Ukraine. In addition to these legacy safety issues, cost and schedule overruns with nuclear power plants such as the Vogtle Nuclear Power Plant in Georgia raise questions about the commerciality of nuclear plants. However, public perception is changing rapidly. A 2024by Pew Research Center found that 56% of Americans favor more nuclear power plants to generate electricity . I suspect the number for nuclear would be higher if citizens better understood the difference between traditional, large-scale nuclear power plants and SMRs. SMRs’ following advantages address the challenges associated with conventional nuclear plants:As defined by the International Atomic Energy Agency , for a reactor to be considered an SMR it must have a capacity less than 300 MWs. By comparison, the average capacity of a conventional reactor is 1,000 MWs . The reactor core of an SMR is around 1/20Conventional nuclear plants require an emergency planning zone with at least a 10-mile radius. Certain advanced SMR technologies are safe enough for the U.S. Nuclear Regulatory Commission to exempt them from this ruling, restricting the EPZ to the fence line of the power plant which requires only around 40 acres. This unique feature allows SMR power plants to be co-located next to a datacenter or an industrial zone.SMRs are designed and manufactured using module factory fabrication in a controlled environment, pursuing economies of series production, standardization, and short construction times. Modularity also allows SMR power plants to achieve scalability, thereby facilitating gradual expansion to meet evolving energy requirements.from the 1960s to the 1980s resulting in over $10 billion per plant) and frequent cost overruns. A 1 GW SMR plant can be built at almost 50% of the cost of a conventional nuclear plant due to simpler design with less components. It also reduces the risk of cost overruns by shifting most of the costs to a controlled factory “off-site” environment. Conventional reactors need to be built on- site which often leads to cost overruns.It takes around 10 years to build a conventional nuclear power plant—if there are no schedule overruns. In contrast, a 1GW SMR plant can be constructed in 3-4 years.Advanced SMR technologies create a steam supply system in which the reactor core, steam generators, pressurizer, and containment are all contained in a single vessel. This eliminates reactor coolant pumps, large bore piping, and other systems and components found in conventional pressurized water reactors, thereby making SMRs much safer. Based on these facts, I think public perception is a relatively minor hurdle to overcome. The much bigger one is whether the right SMR technology is available. Nathalie Volt ofof the technologies and markets for five of the leading SMR companies: NuScale Power, TerraPower, Westinghouse Electric Company, BWXT Technologies, and Kairos Power.Here is a brief description of what I could learn about each one based on information in the public domain.started R&D in 2002. In 2008, it launched its application process to receive approval for its SMR product from the USNRC. This was granted in 2020, and today is the only one to have received certification approval. No other SMR technology has submitted to the NRC for a full review. This means that NuScale’s technology is commercially ready to be deployed for an AI application. Additionally, NuScale formed a joint venture company with its exclusive global strategic partner, an American independent energy production and development company, for commercializing the NuScale SMR technology. Through this strategy, NuScale deploys its approved SMR technology globally via ENTRA1 Energy Plants™,while ENTRA1 Energy develops, finances, and owns energy production plants providing a one-stop-shop approach., based in Bellevue, is a private company which was started by Bill Gates. Their proposed Natrium reactor is a 345 MW reactor using High Assay Low Enriched Uranium fuel. On August 16, 2023 the companythe purchase of land in Kemmerer, Wyoming where the Natrium™ Reactor Demonstration Project will be built near a retiring coal plant as a joint project with the U.S. Department of Energy's Advanced Reactor Demonstration Project. The companythat “It is the only advanced, non-light water, reactor in the Western Hemisphere being built today to meet the challenges of the clean energy transition.”emerged from bankruptcy after being purchased by Brookfield Business Partners, a Canadian private equity fund. On November 7, 2023, it was sold to a consortium comprised of Brookfield Asset Management and alongside its publicly listed affiliate Brookfield Renewable Partners and its institutional partners, and Cameco. Brookfield owns 51% and Cameo owns 49%. The company’s product solutions include energy systems , nuclear fuel , support for operating plants , and environmental services .is traded on the New York Stock Exchange and has been manufacturing naval nuclear components and reactors since the 1950s. It designed and fabricated components for the USS Nautilus, the world’s first nuclear-powered submarine. The BWXT Advanced Nuclear Reactor project is developing a modular, factory-fabricated system that is small and light enough to be transported via rail, ship, or truck and that can deliver 50 MW of thermal nuclear reactor power. On June 9, 2022 ita contract with the Strategic Capabilities Office of the U.S. Department of Defense to build the first advanced transportable nuclear “that can provide a resilient power source to the DoD for a variety of operational needs that have historically relied on fossil fuel deliveries and extensive supply lines.”is a privately-funded company which grew out of a broad research effort at some U.S. universities and national laboratories. The name comes from an ancient Greek word that relates the importance of timeliness and a call to action. The company has a goal of having a U.S. demonstration plant by 2030. On June 12, 2024, the company received a construction permit from the USNRC to build the Hermes demonstration reactor. This is one of several projects being supported through the U.S. Department of Energy’s Advanced Reactor Demonstration Program. Construction began on July 30, 2024 and is projected to be operational in Oak Ridge, Tennessee by 2027.I haven’t found anything in the public domain to indicate that Microsoft is talking to one or more of these companies, or other ones not listed here, such asto build a SMR-powered data center. I hope they are. Being the first big tech company to contract for a SMR to energize data centers for AI applications would kickstart a renaissance in the market for dealing with the challenge of climate change and American energy security. Microsoft is doing this for the carbon removal market and can do the same for the SMR one dedicated to AI applications.Our community is about connecting people through open and thoughtful conversations. 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Artificial Intelligence Data Centers Microsoft Satya Nadella Melanie Nakagawa Nuscale Power ENTRA1 Renewable Energy United States Nuclear Regulatory Commission
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