Nuclear Energy: The Choice of AI Innovators
Last month, the global spotlight was on the energy sources powering data centers that support artificial intelligence. Microsoft announced a commitment to reopen the Three Mile Island Nuclear Reactor — shut down five years ago — and exclusively purchase its energy. Notably, this reactor was the site of the most significant nuclear incident in U.S. history. Meanwhile, Google disclosed plans to acquire eight small modular reactors (SMRs), with the first expected operational by 2030. Amazon has also invested in X-Energy, a company specializing in SMR technology. Shares of nuclear energy companies have surged on the stock market. It seems that AI will increasingly rely on nuclear power. Wasn’t nuclear energy supposed to be obsolete? Weren’t wind and solar energy believed to be sufficient? Let’s explore what’s happening.
Microsoft, Google, and Amazon are urgently seeking new energy sources due to the rapid increase in data center energy consumption driven by AI. For instance, a single query on ChatGPT uses ten times more energy than a standard Google search. Meanwhile, data center investments in the U.S. are rapidly expanding. Resources allocated to data center construction have doubled over the past two years, reaching $28.6 billion annually, comparable to the total spending on restaurant, bar, and retail store construction. Additionally, $65 billion was spent last year on importing computers alone. As investments in this field increase, the share of total U.S. energy consumed by data centers is expected to rise from 3% to 8% by 2030.
While demand for new energy sources is rising, climate change pressures require them to be clean. AI services must be available 24/7 worldwide, but solar energy is only available during the day, and wind energy is intermittent. Battery technologies for storing these renewables still need to be developed and are costly. Nuclear power remains the only clean option capable of providing continuous power. When considering the carbon emissions from manufacturing solar panels, nuclear energy’s total carbon footprint is even lower than that of solar power.
The main drawback of nuclear power has always been its cost. With wind and especially solar energy, the more plants or panels you build or produce, the more efficiently you operate, reducing costs. For instance, when solar production doubles, costs drop by 24%. In contrast, nuclear energy doesn’t benefit from economies of scale; each time production capacity doubles, costs increase by about 6%.
Several factors contribute to this cost disparity. First, safety is the top priority in nuclear energy, and as operations scale up, safety protocols become more complex and costly. Second, atomic projects take an average of seven years to complete, meaning that engineers and managers typically build only two or three nuclear plants in their careers, limiting learning opportunities. Third, initial cost and time estimates for nuclear projects are rarely accurate. On average, atomic projects experience delays of around 65%, with cost overruns reaching as high as 120%. Solar projects, on the other hand, have near-zero delays and cost overruns.
This is where SMR technology — backed by Google and Amazon — comes into play. Traditional nuclear power plants are large, custom-built infrastructure projects. SMRs, on the other hand, are more like prefabricated homes: They’re smaller, modular, and can be assembled side by side to provide a reliable power source without needing to connect to the grid. Both the design and safety processes are more straightforward and potentially less costly, although SMRs remain a limited and unproven technology.
Turkey’s Akkuyu Nuclear Power Plant project exemplifies the challenges of traditional nuclear plants. Although the initial agreement was signed in 2010 and construction began in 2018, the project is expected to cost over $20 billion by its completion. While Germany has shut down its nuclear plants to “save the world,” indirectly enriching Putin through energy purchases, Turkey’s decision to overcome nuclear skepticism can be seen as visionary. However, like most large atomic projects, Akkuyu faces difficulties. Due to sanctions on Russia, Siemens has not delivered the essential materials it committed to providing. This shows how geopolitical factors can significantly delay nuclear projects.
Nevertheless, Turkey should not abandon nuclear energy. Two strategies can help: First, Turkey should consider adopting new and flexible technologies like SMRs. Second, the country should collaborate with partners that are less susceptible to geopolitical disruptions. European nations are both expensive and politically challenging to work with, while South Korea, for instance, is more adaptable and firmly positioned within the Western bloc. South Korea recently completed a nuclear plant supplying a quarter of the United Arab Emirates’ energy needs and is also developing SMR technology. In the AI era, atomic energy will play an essential role, and staying on trend is crucial to remaining competitive.
This article is a translated version of “Yapay zekâcılar “nükleer enerji” dedi’ which was initially published in Economic Daily (Nasıl Bir Ekonomi Gazetesi) on October 25, 2024.
