AI tools require more data centres, and data centres consume large amounts of energy. Can nuclear technology quench the world’s thirst for power?
What happens to energy supply and demand, including nuclear power and other low-carbon energy sources, will likely depend on Donald Trump, the presumptive winner of the 2024 US presidential election.
During the height of the Covid-19 pandemic in 1H2020, oil prices plummeted due to lack of demand but recovered in the second half of 2020 as Opec+ agreed to historic cuts to stabilise production.
Today, at about US$68 ($90.14) per barrel, oil prices are much higher than the US$37 per barrel for West Texas Intermediate (WTI) crude in April 2020, so the world is going nuclear again.
Memories of nuclear accidents such as the Windscale fire in the UK in 1957, Three Mile Island in the US in 1979, Chernobyl in 1986 and tsunami-damaged Fukushima Daiichi nuclear power plant in 2011 reverberates until today.
But growing pressures to decarbonise energy sources, coupled with the need for energy security amid Russia’s war on Ukraine have forced countries to consider alternatives to keep the lights burning.
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Lingering fear from past nuclear disasters had kept most governments from splitting atoms, until the recent rise of an insatiable energy consumer — artificial intelligence (AI).
OpenAI CEO Sam Altman joined Nvidia CEO Jensen Huang, Google president Ruth Porat and other big names at the White House in September to raise their concern: The US industry needs more energy — fast.
Altman followed up with a 15-page proposal, requesting that the US government construct several 5 gigawatt (GW) power plants in various states, each at a cost of around US$100 billion, to be used by his own start-up and other companies at the forefront of AI.
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5GW is roughly the equivalent of five nuclear reactors, or enough to power almost three million homes.
“Fundamentally today in the world, the two limiting commodities you see everywhere are intelligence — which we’re trying to work on with AI — and energy,” said Altman in an interview with CNBC back in 2021.
Altman has been a strong supporter of nuclear energy for years. In 2015, he was a lead investor in nuclear start-up Oklo, which recently announced that it aims to develop its first small modular nuclear reactor (SMR) by 2027.
SMRs are an advanced type of nuclear reactor with a smaller physical footprint, allowing them to be built closer to the grid.
According to the World Nuclear Association, their small size and passive safety features may appeal to countries with smaller grids and less experience with nuclear energy.
Unlike traditional nuclear reactors, which average roughly 1,000 megawatts (MW) in size, SMRs can be built in factories, delivered in segments by truck or train, and then assembled on-site.
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They also typically have a smaller power capacity of up to 300MW. Altman’s peers are making similar moves.
In early September, OpenAI’s biggest investor Microsoft struck a deal to restart the idle Three Mile Island facility solely to provide the big tech company with nuclear energy for two decades. In 1979, a partial nuclear meltdown of a reactor at the Three Mile Island Nuclear Generating Station in Pennsylvania released radioactive gases and iodine in what has been called the “worst nuclear incident in US history”.
That said, the incident resulted in no injuries or deaths. Meanwhile, Google announced on Oct 14 that it had agreed to buy a total of 500MW of nuclear energy from California’s Kairos Power.
The nuclear energy will be generated by six to seven SMRs, with the first due to be completed by 2030 and the remainder by 2035.
Amazon, too, announced on Oct 16 that it had signed an agreement with US utility firm Dominion Energy to explore developing a US$500 million SMR at the existing North Anna nuclear power station in Virginia. The upcoming SMR could bring at least 300MW of power to the region.
Amazon has also signed agreements with Washington-based utility Energy Northwest, which will construct, own and operate SMRs to generate some 320MW of power, with the option to expand to 960MW.
The tech giant is also investing an unspecified amount into X-energy, a developer of SMR reactors and fuel. X-energy’s design will be used in the Energy Northwest project.
According to Amazon, the investment includes manufacturing capacity to develop the SMR equipment to support more than 5GW of new nuclear energy projects using X-energy’s technology.
“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our commitment to be net-zero carbon emissions across our operations by 2040,” says Matt Garman, CEO of Amazon Web Services. “One of the fastest ways to address climate change is by transitioning our society to carbon-free energy sources, and nuclear energy is both carbon-free and able to scale.”
Artificial demand
Tech giants are not just making these investments in anticipation of future growth; the everyday Internet user is already driving this growth in energy demand today. According to the non-profit Electric Power Research Institute (EPRI), a single ChatGPT request uses 10 times the energy of a conventional — or non-AI — Google search.
Data centre expansion and other factors are expected to drive electricity demand up by 15% to 20% over the next decade, according to the US Department of Energy. “The shift, especially with data centres, is causing an increase in demand that we wouldn’t have seen necessarily a few years ago, and that’s definitely causing a shift in how we’re thinking about things,” says Celeste Marshall, an international relations specialist at the United States Department of Energy’s Office of Asian Affairs.
At the high end of projections, data centres could consume as much as 9.1% of US electricity generation each year by 2030, up from 4% in 2023, according to EPRI.
Other studies have issued more extreme forecasts. US utilities will face a “significant” challenge as power demand surges for the first time since the 1990s, according to a recent report by energy research firm Wood Mackenzie. Some regions in the US will see 15% electricity demand growth through 2029, thanks to data centre development, energy-intensive manufacturing and growing electrification of transport and heating.
Released on Oct 17, the Gridlock: the demand dilemma facing the US power industry report claims US electricity demand will grow between 4% and 15% through 2029, depending on the region.
Today’s ecosystem players are not prepared for an environment of growing power demand. “In most industries, demand growth of 2% to 3% per year would be easily managed and welcomed,” says Chris Seiple, vice-chairman of power and renewables with Wood Mackenzie. “In the power sector, however, new infrastructure planning takes five to 10 years, and the industry is only now starting to plan for growth.”
A deal with Microsoft is allowing the shuttered Three Mile Island nuclear plant in Pennsylvania to reopen
Fusion solution
The major nuclear incidents in Three Mile Island, Chernobyl and Fukushima all involved “older technologies” from the 1960s to the 1980s, says Michael Philip Short, adjunct professor at the Institute of Materials Research and Engineering (IMRE) in the Agency for Science, Technology and Research (A*Star). “These were light-water reactors in different designs, but in all cases, these were things that were effectively baked in from the start.”
New types of reactors today are “inherently safer”, he adds. Instead of using water as a coolant, for example, these newer designs could feature molten salts or liquid metals, which boil at much higher temperatures.
The physical processes for nuclear energy production is also evolving. Today, two processes exist — nuclear fission and nuclear fusion. While nuclear fission splits a heavy element (with a high atomic mass number) into fragments, nuclear fusion joins two light elements (with a low atomic mass number), forming a heavier element.
Nuclear fission power plants have the disadvantage of generating unstable nuclei and some of these are radioactive for millions of years, according to the International Energy Agency (IEA), but it is at present the sole physical process used in nuclear power production in the world.
Nuclear fusion, on the other hand, does not create any long-lived radioactive nuclear waste. But the world has yet to build a commercial-scale fusion power plant, owing to constraints on science and funding.
“The safety baked into nuclear fusion plants is such that if anything goes wrong, it just stops,” says Short on a panel at the Singapore International Energy Week (SIEW) 2024. “It doesn’t continue to produce a lot of decaying [radioactive waste and the] amount of waste is far lower. Of course, it comes at a slightly higher capital cost, but that’s worth it in terms of the lower uncertainty.”
One US start-up could bring that pipe dream to life. OpenAI’s Altman was the lead investor in US-based nuclear fusion start-up Helion Energy’s Series E Round in November 2021, where he reportedly contributed US$375 million of the US$500 million raised.
Helion Energy announced the “world’s first fusion energy purchase agreement” in May 2023, after Microsoft signed a power purchase agreement to buy electricity generated from its fusion reactors. Helion Energy expects its plant to go online by 2028, with a target power generation of 50MW or greater after a one-year ramp-up period.
A Bloomberg report from July, however, rained on Helion Energy’s parade, saying the start-up has been so secretive about its progress that even employees were surprised to learn of the Microsoft deal.
Nuclear in Asia
Singapore may have adopted a “wait and see” approach to nuclear energy, but neighbouring Vietnam made headlines on Oct 21 by including nuclear energy and hydrogen in its national power development plan.
Vietnam’s Minister of Industry and Trade Nguyen Hong Dien announced that the country is embracing more renewables, including solar and wind.
Vietnam has reportedly discussed SMRs with South Korea, Canada and Russia. The announcement marks an about-face for the Southeast Asian nation, which had approved plans to develop its first two nuclear plants in 2009 but shelved them seven years later owing to the Fukushima disaster in Japan.
Southeast Asia is not entirely a stranger to nuclear energy. Half of Asean’s 10 member countries are either studying the feasibility of nuclear energy entering their energy grids, or already have plans to build new reactors.
In fact, Indonesia’s first experimental nuclear reactor, the Triga Mark II, opened in the city of Bandung in February 1965. Triga is a class of nuclear reactor designed by American firm General Atomics for research and testing.
But the closest Southeast Asia ever got to installing a full-fledged nuclear power station was with the Bataan Nuclear Power Plant (BNPP), located some 70km west of Manila. Despite costing some US$2.3 billion to build, the BNPP was never powered up, owing to a tumultuous decade of corruption, ballooning construction cost, the 1979 Three Mile Island accident, the 1986 Chernobyl disaster and a violent political revolution.
Hence, while Southeast Asia has the experience of commissioning and building a nuclear power, it was never fuelled or operated, says Victor Nian, founding co-chair of the Centre for Strategic Energy and Resources, a think-tank based in Singapore. “What we don’t have is the actual experience of operating a nuclear power plant.”
Nuclear energy in Asia is mostly confined to India, China and Japan. According to the World Nuclear Association, China has 56 operable reactors, with some 54,362MW of capacity; and 31 reactors under construction, with some 33,353MW of capacity. China has two listed nuclear energy suppliers: Hong Kong-listed China Nuclear Energy Technology Corp and China National Nuclear Power Corp, an A-share on StockConnect.
Meanwhile, India has 23 operable reactors, with some 7,425MW of capacity; and seven reactors under construction, with some 5,398MW of capacity. Listed power companies in India include National Hydroelectric Power Corp, which has expanded to solar, wind, geothermal and tidal power. Orient Green Power Company produces wind energy and the Nuclear Power Corporation of India produces nuclear power. As an unlisted state government entity, the latter is financed by the fast-developing Indian bond market.
Nuclear energy only accounted for about 3% of Asia’s energy mix in 2022, according to IEA. Its Southeast Asia Energy Outlook 2024, released Oct 22, acknowledges that while nuclear power is “not a large part of today’s energy mix in Southeast Asia”, Indonesia and Vietnam could lead the region in the coming decades.
IEA created two forecasts in its outlook: the Stated Policies Scenario (Steps), which indicates the direction of travel for the energy sector based on today’s policies; and the Announced Pledges Scenario (APS), which assumes that all the national energy and climate targets made by governments are met in full and on time, including longterm net-zero goals.
IEA forecasts that nuclear energy will become a part of the electricity mix around 2035 in both scenarios. However, its contribution will remain relatively small, accounting for about 1% in 2050 in the Steps and 2% in the APS.
Speaking at SIEW 2024, Nian says he is being “realistic” in not expecting any nuclear newbuilds in the region before 2030. “Southeast Asia is going to [have] a long-term kind of journey where we’re really looking at varying from the West, what other people are doing best, lessons learnt from accidents and also the success stories — and then we think about what needs to be done.”
Panellists at the SIEW Thinktank Roundtable on nuclear energy on Oct 24. From left: Victor Nian from the Centre for Strategic Energy and Resources; Michael Philip Short from A*star; Thomas Lui from CLP Power Hong Kong; Celeste Marshall from the US Department of Energy; Jin Young Lee from Hyundai Engineering & Construction; and moderator Audrey Tan from The Straits Times
Nuclear in Singapore?
But Singapore believes it could pull ahead on the nuclear energy front by mid-century. A report commissioned by the Energy Market Authority (EMA) concluded in 2022 that nuclear energy could supply about 10% of Singapore’s energy needs by 2050.
In July, Singapore signed a landmark deal with the US to study how nuclear technology can support climate and energy needs. The agreement, known as a “123 Agreement”, allows for the transfer of nuclear material, equipment and information between the two countries.
Singapore has not made any official decision about deploying nuclear energy in the country. Yet, EMA CEO Puah Kok Keong said in an interview with CNA that the city-state has been looking at the use of nuclear energy “for a while”.
The government completed a feasibility study on nuclear energy about a decade ago, says Puah on the sidelines of SIEW 2024, concluding at the time that the size of conventional nuclear reactors would not be suitable for Singapore due to space constraints.
But experts are now looking at SMRs, touted to be more reliable with a smaller exclusion zone for safety, and Singapore is “going to be watching very closely”, said Puah.
SMRs promise a “faster turnaround” to be built, says A*Star’s Short. “When you get used to building one [and] work out all the kinks in the manufacturing, then it gets a lot easier and cheaper.”
People and livestock are typically barred from entering and inhabiting an area spanning 30km around a traditional fission nuclear power plant, but with an SMR, this exclusion zone could “shrink considerably”, adds Short. “If you imagine fusion, where Singapore hosts at least one nuclear reactor, you could do so in a place where the zone [of] what could be affected doesn’t include where anybody is, where a lot of the local energy consumption is, where the refinery and the data centres [are located] could be away from population centres.”
Until SMR technology and safety is proven, however, developers remain sceptical about their feasibility. Thomas Lui, associate director for decarbonisation architecture at CLP Power Hong Kong, says he can “hardly imagine” building a nuclear power plant in Hong Kong, “no matter if it’s a traditional, large-scale plant or an SMR”.
Hong Kong Exchange-listed CLP Holdings is the city’s top electricity provider, and Hong Kong — with its similar land size — could offer Singapore some lessons about the viability of nuclear energy.
While Hong Kong does not have power plants within its borders, Lui says a “more realistic expectation” will be to increase nuclear power imports from neighbouring Guangdong, China.
A wholly-owned subsidiary of CLP Holdings owns a 25% stake in the Daya Bay Nuclear Power Station in Guangdong. Commissioned in 1994, Daya Bay is mainland China’s first commercial nuclear power plant. It supplies around 80% of its 1,968MW capacity to Hong Kong.
CLP CEO Chiang Tung Keung said in August that nuclear energy would play the largest role in decarbonising Hong Kong’s power sector owing to its reliability, and the company plans to import more renewable energy from mainland China to help Hong Kong meet its target of making 60%–70% of its power carbon-free by 2035.
“We need to consider the availability of the resources in the region to define our decarbonisation plan,” says Lui at SIEW 2024. “That’s why SMRs may not be the choice of our company for this region; it’s about the consideration of the local context.”
Investing in power
Closer to home, Keppel and Sembcorp Industries U96 have increasingly mentioned data centres in their briefings. But these are just boxes without the M&E infrastructure and power supply.
Sembcorp is the real deal, supplying 33% of Singapore’s data centre energy requirements through its gas-fired and renewable power, assuming a total data centre capacity of 1.4GW. According to Sembcorp’s results briefing for 1HFY2024 ended June 30, more than 75% of its gas-fired capacity in Singapore is contracted to data centres and high-tech manufacturing customers.
Keppel’s management sounded somewhat ambivalent when asked about power sources for its ambitious 1.2GW data centre build-out.
Manjot Singh Mann, CEO of Connectivity and CEO of M1, says: “We are also looking at AI campuses in Malaysia, India, Japan and Indonesia. So that is where the balance 500MW comes from. All of these are powerbanked, and we will only look at opportunities where there is power available. But we also work extremely closely with our infrastructure division to make sure that if we have grid power, how do we make it green progressively?”
The two listed entities are no doubt eager to supply power to fuel Singapore’s ambitions of being an AI and quantum computing hub. But this big aspiration will require a power source far larger than what the country has today.
Work has begun in preparing Singapore for a nuclear-powered future. In 2019, Singapore-headquartered investor Temasek led a US$65 million Series E funding round in Vancouver-based General Fusion, which is developing a demonstration for nuclear fusion and aims to bring commercial fusion energy to the grid by the 2030s.
The private sector, too, has taken a chance on nuclear energy. Singapore-based cleantech investor TRIREC invested in US-based nuclear fusion designer Type One Energy’s US$29 million seed extension round in early 2023 alongside Bill Gates’ Breakthrough Energy Ventures. Type One Energy has signed an agreement with the Tennessee state government to build a prototype reactor on the site of a decommissioned coal-fired power plant by 2028 — mirroring Helion Energy’s ambitious deadline.
Meanwhile, Nanyang Technological University announced in 2023 a new research centre for nuclear fusion with France’s Alternative Energies and Atomic Energy Commission, named the Singapore Alliance with France for Fusion Energy.
The National University of Singapore (NUS) announced in March a new research building that will house some 100 nuclear researchers, furthering the work of the university’s Singapore Nuclear Research and Safety Initiative (SNRSI), which was launched a decade ago.
Many countries like Singapore are adopting a “wait and see approach”, says A*Star’s Short. “While it’s wise not to rush into anything [too quickly], it also requires building political, social and educational structures such that the human talent, the workforce, the capital and the societal readiness are ready when it comes time for deployment.”
Nian, the think-tank founder, warns that governments could overlook supply chain availability when dreaming of nuclear energy. “Imagine heading for war and charging so far deep into enemy territory and you look back the supply chain is 20km away from you. You would be very worried.”
The industry must determine if supply chain capabilities are rising fast enough to meet demand 30 years down the road, says Nian. Policymakers, meanwhile, should examine whether their licensing and regulatory regimes can accommodate a “different possible future” with a variety of technologies being adopted, he adds.
The technologies around nuclear have been ready for decades, says Short. “What’s needed now is to figure out how to get people to come to the idea of nuclear on their own terms, not force acceptance, but get everyone receptive to the idea … and to overcome the inaction bias of doing that.”
Photo: Bloomberg, Jovi Ho/The Edge Singapore, IEA
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