Nuclear power is returning to Three Mile Island. This nuclear power plant is typically associated with a very specific event. One of its reactors, Unit 2, suffered a partial meltdown in 1979, in what remains the most significant nuclear accident in United States history. Since then, it has remained closed.
But the Pennsylvania site is also home to another reactor — Unit 1, which consistently and safely generated electricity for decades until it was decommissioned in 2019. The plant’s owner announced last week that he has plans to reopen the plant and has signed a deal with Microsoft. The company will purchase all of the plant’s electrical generating capacity for the next 20 years.
This news is fascinating for several reasons. Obviously, this site has special significance in the history of nuclear energy in the US. There is a possibility that this will be one of the first reactors in the country to reopen after being decommissioned. And Microsoft will buy all the electricity from the reactor. Let’s look at what this says about the future of the nuclear industry and the growing demand for energy from big technology companies.
Three Mile Island Unit 2 operated for only a few months before the accident in March 1979. At the time, Unit 1 was offline for refueling. That reactor was restarted, not without controversy, in the mid-1980s and produced enough electricity for hundreds of thousands of homes in the region for more than 30 years.
Eventually, however, the plant ran into economic difficulties. Even though it operates with relative efficiency and low costs, it has been hampered by the record drop in natural gas prices and the introduction of relatively cheap, subsidized renewable energy into the power grid, according to Patrick White, research director at the Nuclear Innovation Alliance, a nonprofit think tank. profitable.
That situation has changed in recent years, says White. There is now more money available for nuclear power, including new technology-agnostic tax credits in the Inflation Reduction Act. And there is also growing concern about rising energy demands on the electrical grid, in part due to tech giants looking to power data centers like those needed to run artificial intelligence.
In announcing its deal with Microsoft, Constellation Energy, owner of Three Mile Island Unit 1, also shared that the plant will undergo a rebranding — the site will be renamed the Crane Clean Energy Center. (I’m not sure this name will stick.)
The combination of the specific location of this reactor and the fact that the electricity will be used to power data centers (and other infrastructure) makes this announcement instantly attractive. As one headline put it: “Microsoft’s AI needs so much power that it’s resorting to the site of the largest US nuclear accident.
For some in the climate sector, this deal makes a lot of sense. Nuclear power remains one of the most expensive forms of electricity today. However, experts say it can play a crucial role in the power grid, as plants typically generate a consistent amount of electricity — often referred to as “steady power,” in contrast to renewables such as wind and solar. which are available intermittently.
Without secured funding, there is a chance this reactor would simply have been decommissioned as planned. Reopening plants that have recently closed could provide an opportunity to realize the benefits of nuclear energy without the need to build a completely new project.
In March, Michigan’s Palisades Nuclear Power Plant received a loan guarantee from the U.S. Department of Energy’s Office of Loan Programs worth more than $1.5 billion to help restart operations. Palisades closed in 2022, and the site’s owner says he hopes to have it back online by the end of 2025. It will be the first decommissioned reactor in the U.S. to return to operation, if all goes as planned. (For more details, check out my story from earlier this year.)
Three Mile Island may not be far behind — Constellation claims the reactor could return to operation by 2028. (Interestingly, the facility will need to go through a relicensing process within a few years, as it is currently only licensed to operate until 2034. A standard 20-year extension could keep it running until 2054.)
If Three Mile Island returns to operation, Microsoft would be the biggest beneficiary, as its long-term power purchase agreement would guarantee enough electricity to power about 800,000 homes a year. In this case, the energy will be used to help maintain the company’s data center infrastructure in the region.
This isn’t the first recent sign that tech giants are entering the nuclear energy sector: Earlier this year, Amazon acquired land for data centers next to the Susquehanna nuclear power plant, also in Pennsylvania.
While Amazon will only use part of the Susquehanna plant’s production, Microsoft will purchase all of the energy generated by Three Mile Island. This raises the question of who is paying for what in this entire deal. Consumers will not be held responsible for any of the costs to restart the installation, Constellation CEO Joe Dominguez told the Washington Post. The company will also not seek special subsidies from the state, he added.
However, Dominguez also told the Post that federal money is critical to allowing this project to move forward. Specifically, there are tax credits in the Inflation Reduction Act set aside for existing nuclear power plants.
The company declined to provide the Post with a figure for the potential tax credits and did not respond to my request for comment, but I did my own calculations. Assuming an 835-megawatt plant operating at 96.3% capacity (the figure provided by Constellation for the plant’s final year of operation) and a tax credit of $15 per megawatt-hour, this could amount to about $100 million per year, assuming wage and price requirements are met.
It will be interesting to see how far this plant reactivation trend can go. The Duane Arnold nuclear plant in Iowa is a potential candidate — it closed in 2020 after 45 years, and the site’s owner has made public comments about the possibility of reopening the plant.
Reactivating any or all of these three plants could be the latest sign of a possible return to nuclear power. Big tech companies need a lot of energy, and bringing old nuclear plants back onto the grid — or, better yet, keeping older ones operating — seems like a great way to meet that demand.
However, given the relative rarity of opportunities to harness energy from recently closed or soon-to-close plants, I believe the biggest question for the industry is whether this surge in interest will also translate into the construction of new reactors.
( fonte: MIT Technology Review )
