The prospects for electricity demand growth have generated a wave of interest in nuclear energy from major digital companies. For instance, Amazon is going to invest $500 million in X-Energy, which plans to launch over 5 GW of nuclear capacity by 2039. Meanwhile, Google has signed a contract with Kairos Power last October to purchase electricity from small modular reactors with a total capacity of 500 MW, which will be gradually put into operation until 2030. Finally, Endeavor and the startup Deep Fission agreed in January 2025 to build more than 100 microreactors with a capacity of 15 MW each, the first of which is slated to come on stream in 2029.
Interest towards nuclear energy is linked to the possibility of providing guarantees of uninterrupted power supply for digital infrastructure while reducing greenhouse gas emissions. However, although IT giants consider this factor to be substantial, it might hold less significance for small and medium-sized businesses that do not need to attract investors with their environmental reporting. This is why not NPPs but rather gas-fired power plants, which are less capital-intensive, could play a crucial role in supplying data centers with electricity.
The International Energy Agency (IEA) estimates the average cost of bringing 1 kW of nuclear capacity in the United States at $5,000 in 2023, with capital expenditures on the construction of combined-cycle gas turbines standing at just $1,000 per kW. Due to the vast difference in costs, gas-fired power generation could get a second wind in the U.S. as soon as the potential of coal substitution is exhausted. According to Ember, the share of gas in the country’s energy mix rose from 16% in 2000 to 42% in 2023, whereas that of nuclear dropped from 52% to 16%.
In the coming years, the share of gas is going to grow, including due to the affordability of gas in the American market. In 2024, the average price of gas at Henry Hub was more than four times lower than the one at TTF, Europe’s largest hub ($392 per 1,000 cubic meters). Cheap feedstock will give an additional advantage to small and medium-sized IT companies, which consider cost competition an important factor.
