Microsoft Corp. seeks carbon-free electricity for data centers to power the Artificial Intelligence boom; Three Mile Island will be that source

Important Takeaways:

  • Microsoft AI Needs So Much Power It’s Tapping Site of US Nuclear Meltdown
  • The owner of the shuttered Three Mile Island nuclear plant in Pennsylvania will invest $1.6 billion to revive it, agreeing to sell all the output to Microsoft Corp. as the tech titan seeks carbon-free electricity for data centers to power the artificial intelligence boom.
  • Constellation Energy Corp., the biggest US operator of reactors, expects Three Mile Island to go back into service in 2028, according to a statement Friday.
  • While one of the site’s two units permanently closed almost a half-century ago after the worst US nuclear accident, Constellation is planning to reopen the other reactor, which shut in 2019 because it couldn’t compete economically.
  • Microsoft has agreed to purchase the energy for two decades and declined to disclose financial terms.
  • This is the first time Microsoft has secured a dedicated, 100% nuclear facility for its use.
  • The decision is the latest sign of surging interest in the nuclear industry as power demand for AI soars.
  • “There’s no version of the future of this country that doesn’t rely on these nuclear assets.”
  • Wind and solar power outputs can vary, while a nuclear plant generally runs constantly and requires a customer that can take all of that electricity
  • That makes tech companies selling cloud computing an ideal option.

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Exelon to close Three Mile Island nuclear plant in Pennsylvania on Friday

(Reuters) – U.S. energy company Exelon Corp said it will shut the last reactor at the Three Mile Island power plant, site of the worst nuclear accident in U.S. history, at noon local time on Friday.

The company announced in May that it planned to shut the 45-year old unit in September due to inaction in the Pennsylvania legislature on a bill that would have subsidized the continued operation of nuclear power in the state.

Paul Adams, a spokesman for Exelon, said the company will issue a statement later Friday on the planned closure. He noted Exelon never owned the unit that suffered the accident in 1979.

Exelon said on its website it bought the 837-megawatt (MW) Unit 1 at Three Mile Island about 20 years after accident at Unit 2. Unit 2 is owned by FirstEnergy Corp <FE.N>.

One megawatt can power about 1,000 average U.S. homes.

Nuclear services company EnergySolutions Inc said in July it was in negotiations with a unit of FirstEnergy to acquire and complete the decommissioning of Unit 2.

In recent years, electricity prices have been depressed by cheap natural gas from shale fields, including the Marcellus in Pennsylvania, and by increased use of renewable power.

This has reduced the amount of money power plants can make selling electricity and forced generators to shut several coal and nuclear plants in recent years.

Many states, including New York, Illinois, Connecticut, New Jersey and Ohio have already adopted nuclear subsidies to keep their reactors in service to help meet carbon reduction and other goals.

Lawmakers in Pennsylvania have considered legislation, but not in time for Three Mile Island. Exelon said it had to decide whether to spend the money to refuel the plant by June 1.

In addition to the states, officials in U.S. President Donald Trump’s administration have also proposed programs to keep nuclear and coal plants operating longer.

Nuclear power plants generated about 39% of Pennsylvania’s electricity in 2018 and have provided over 90% of its zero-carbon power, according to federal and industry data.

Elsewhere in Pennsylvania, Exelon operates two reactors at Peach Bottom and two at Limerick, FirstEnergy operates two reactors at Beaver Valley, and Talen Energy owns two at Susquehanna.

FirstEnergy’s bankrupt FirstEnergy Solutions unit has said it would shut Beaver Valley in 2021 unless the reactors receive some financial support from federal or state programs.

(Reporting by Scott DiSavino; Editing by Nick Zieminski)