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The company is placing a huge bet on small modular reactors.
First it was Microsoft and Constellation restarting Three Mile Island, then it was Google announcing it would buy power from small modular reactors built by Kairos. Now today, Amazon has said it’s investing in X-energy, the small modular reactor and fuel company, and supporting a joint project by X-energy and Energy Northwest, the Washington state public utility.
So what makes this deal different from all other nuclear tech deals?
“What makes this significantly different is the investment,” Brett Rampal, a senior director at Veriten, an energy advisory company, told me. Amazon is not just buying the power that a nuclear reactor will produce after it’s completed. It’s getting involved in the projects themselves.
This has not typically been how big tech companies with commitments to reduce emissions and rapidly expanding energy needs to power more data centers get involved with nuclear power.
The Microsoft/Constellation deal to restart Three Mile Island did not entail Microsoft taking on the financial and logistical burden of upgrading the plant so that it could be up and running again in a few years — for that, Constellation will be putting $1.6 billion of its own money into the plant. Instead, Microsoft signed a 20-year deal for the plant’s output, known as a power purchase agreement, which guarantees a price for the plant’s product. These types of deals were pioneered by Google to support renewables projects by giving them a guaranteed income independent of how electricity prices might fluctuate in whatever market they were selling into.
Amazon’s deal, on the other hand, is a “direct investment in the Energy Northwest project,” an X-energy spokesperson told me. According to an Amazon spokesperson, that means a “capital commitment to fund development, licensing and construction of an SMR project with Energy Northwest in Washington State,” a spokesperson told me. The project would be sited near the existing Columbia Generating Station in Richland.
“This is Amazon saying, We’re in, and we need this, and we’re putting skin in the game directly,” Rampal said. By contrast, other nuclear deals like Microsoft’s and Google’s “send demand signals and are, Hey, we’ll be there when you’re done.”
Energy Northwest and X-energy signed a joint development agreement for the project last year. If all goes as planned, the finished facility could be as large as 960 megawatts from 12 X-energy 80-megawatt “modules.” Amazon could buy the electricity from up to four of the modules, totaling 320 megawatts. Amazon said that the project “will help meet the forecasted energy needs of the Pacific Northwest beginning in the early 2030s.” (Last year X-energy and Energy Northwest said the project would be online “by 2030.”)
“We’ve been working for years to develop this project at the urging of our members, and have found that taking this first, bold step is difficult for utilities, especially those that provide electricity to ratepayers at the cost of production,” Greg Cullen, Energy Northwest’s vice president for energy services and development, said in a release. “We applaud Amazon for being willing to use their financial strength, need for power, and know-how to lead the way to a reliable, carbon-free power future for the region.”
That “first, bold” step is difficult because nuclear development is notoriously risky even with proven technologies, let alone novel designs like X-energy’s. The only other small modular reactor deal in the United States, between NuScale (which has the only approved small modular reactor design) and a coalition of Mountain West utilities, fell through due to escalating costs.
Amazon is also anchoring an equity investment in X-energy itself, alongside Citadel founder Ken Griffin and other investors. Amazon said its investment in X-energy “includes manufacturing capacity to develop the SMR equipment to support more than 5 gigawatts of new nuclear energy projects utilizing X-energy’s technology.”
The reactor design that Energy Northwest and X-energy plan to deploy, the Xe-100, is in the “pre-application” process with the Nuclear Regulatory Commission. X-energy and the NRC have been engaging with each other since 2018, according to the docket for the project.
Amazon also announced that it had signed a memorandum of understanding with Virginia utility Dominion Energy to look into SMR projects. Earlier this year, Dominion put out a request for proposals for SMRs at its existing North Anna site near Richmond, whose two reactors have a capacity of around 1,800 megawatts.
The Department of Energy has estimated that existing nuclear sites could host an additional 60 to 95 gigawatts of new nuclear power, which means the United States’ nuclear output could double without having to set up a new site for a reactor. The North Anna site has an “early site permit” from the NRC, which approves a particular site for nuclear reactors.
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On the IEA’s World Energy Outlook, power plant emissions, and Honda’s surprise
Current conditions: Snow is falling in the mountains of North Carolina, where many are still without power • Severe weather warnings are in effect for nearly half of Australia • A coral bleaching alert has been issued for the eastern Caribbean, where the coral face a risk of “near complete mortality” due to high ocean temperatures.
The world is entering the “Age of Electricity,” with low-emission energy sources on track to generate more than half of the world’s electricity by the end of the decade, according to the International Energy Agency’s new World Energy Outlook. The report examines how the energy transition would look in three different scenarios: following current energy and climate policies, fulfilling all announced climate commitments, and achieving net zero emissions by 2050. “The energy outlook is complex, multifaceted and defies a single view on how the future might unfold,” the report says. Some facts and figures:
Global energy-related CO2 emissions in different scenarios.IEA
The IEA’s report says the world should certainly be concerned about rising electricity demand overall, but it also conveys that perhaps we should all just calm down when it comes to data center load growth driven by the rise of generative artificial intelligence, wrote Heatmap’s Katie Brigham. The report demonstrates that on a global scale, data centers are pretty trivial compared to, say, the uptick in electric vehicle adoption or increased demand for cooling. By 2030 in the base case scenario, the IEA projects that data centers will account for less than 10% of global electricity demand growth, which is roughly equal to demand growth from desalination technologies, which we see much less hand-wringing about. By comparison, the combination of rising temperatures and rising incomes could create over 1,200 terawatt-hours of additional cooling demand by 2035, more than the entire Middle East’s electricity use.
Ninety-two people are still missing in North Carolina after Hurricane Helene, Gov. Roy Cooper, said yesterday. So far 95 storm-related deaths have been confirmed in the state, and thousands of people are still without power and other basic amenities. Nearly 600 roads are still closed, though this represents an improvement on the 1,200 that were closed immediately after the storm swept through the state three weeks ago. More than $99 million has been paid out in individual FEMA aid. Meanwhile, the U.S. Small Business Administration’s disaster loan program has been drained of funds after Helene. “Until Congress appropriates additional funds, the SBA is pausing new loan offers for its direct, low-interest, long-term loans to disaster survivors,” the SBA said. Congress is currently in recess, and won’t return until after the presidential election.
Emissions from America’s power plants fell 7% last year compared to 2022, according to the EPA’s annual Greenhouse Gas Reporting Program. The analysis looks at reported emissions from more than 8,100 industrial facilities across the country. When compared to 2011 emissions from power plants, last year’s levels were 34% lower, “reflecting the long-term shifts in power sector fuel-stock from coal to natural gas.” On the flip side, emissions from oil and gas operations are rising. They were up 1.4% last year compared to 2022 and 16.4% on 2016 levels. For the ninth year in a row, Alabama Power’s James H. Miller Jr. Electric Generating Plant was the country’s largest single producer of greenhouse gas pollution in 2023.
Honda has surprised analysts with its remarkable Q3 EV sales. The Honda Prologue, which only entered the U.S. market this year, was the fifth best-selling EV in the country. More than 12,600 of the all-electric SUVs were sold in the last three months. “Honda has been seen as a huge EV laggard for several years,” wrote Zachary Shahan at CleanTechnica. But its “reputation as a leader in fuel efficiency and hybrids made it an easy sell to get customers into its first serious full electric vehicle.” Patrick George at Inside EVsagreed: “This is a nice outcome for Honda's first modern EV, but perhaps it's not too surprising. American car buyers still tend to equate Honda and Toyota with being ‘green’ car companies since both were such pioneers in the hybrid arena.”
Honda
Research suggests that simply exposing people to climate change conspiracy theories can make them significantly less likely to believe the scientific community agrees that humans are causing climate change, and less likely to engage in pro-environmental behavior.
Rob interviews Ali Zaidi at Yale.
What’s next for the Biden administration — and for climate policy in the United States? Should Democrats negotiate with Republicans over permitting reform, even if it means making concessions to fossil fuel interests? And how should the country’s trade policy handle the problem of carbon pollution?
On this week’s episode of Shift Key, Rob speaks with Ali Zaidi, the national climate advisor to President Joe Biden. Zaidi leads the White House Climate Policy Office, which coordinates domestic climate policy across federal agencies. Before joining the White House in 2021, Zaidi was the state of New York’s deputy secretary for energy and environment. This interview was recorded live on October 10 in New Haven, Connecticut, at the Yale Clean Energy Conference.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is out this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Ali Zaidi: The conversation in Congress right now makes it seem like transmission is a Democratic policy priority when it boosts reliability and lowers rates. I thought Republicans and Democrats both agreed we need to boost reliability and lower rates. So I don’t know why that needs to be offset by any measure.
That’s thing number one. Thing number two is …
Robinson Meyer: This is the challenge of talking about things, is that if Democrats say, oh, we really value this, then suddenly it’s a Democratic priority.
Zaidi: Yeah. And then the second is, how do we accelerate the siting and permitting of things and then there is a how do we shift more power to the oil and gas industry. The conversation around leasing, happening against a backdrop where the industry itself is moving away from long-cycle investment to short-cycle investment, it’s tough. So I would hope that more of the permitting conversation were a permitting conversation.
Meyer: Well, one way this sometimes gets reflected is that you’ll hear environmentalists say, any policy that makes the oil and gas industry happy or bigger, we should not take. And that makes making a compromise …
Zaidi: And I reject that. Yeah, look, if ExxonMobil wants to pay for a pipeline that will help us deliver what was once solar and wind, as a fuel, to help us decarbonize a steel plant, they can be for it and I can be for it. If there is a — Blackstone, for example, has a Project Tallgrass that has converted a pipeline that used to pull hydrocarbons out of the ground. It’s now flipped the pipeline around, and is putting CO2 into the ground.
They can be for that. I can be for that — not speaking to the specific project, but conceptually. So I don’t think … It’s not the actor. It’s the question of whether this is directionally consistent with trying to chase down a 1.5 degree future or not.
We are behind as a world, and we need to run faster in that direction. If it’s not directionally consistent, that’s a problem.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
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Intersolar & Energy Storage North America is the premier U.S.-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. To learn more, visit intersolar.us.
Music for Shift Key is by Adam Kromelow.
The organization’s annual World Energy Outlook is pretty sanguine on the subject.
Early this morning, the International Energy Agency released its annual World Energy Outlook. And while the Paris-based agency says the world should certainly be concerned about rising electricity demand overall, it also conveys (not quite in so many words) that perhaps we should all just calm down when it comes to data center load growth driven by the rise of generative artificial intelligence.
The report demonstrates that on a global scale, data centers are pretty trivial compared to, say, the uptick in electric vehicle adoption or increased demand for cooling. By 2030 in the base case scenario, the IEA projects that data centers will account for less than 10% of global electricity demand growth, which is roughly equal to demand growth from desalination technologies, which we see much less hand-wringing about. By comparison, the combination of rising temperatures and rising incomes could create over 1,200 terawatt-hours of additional cooling demand by 2035, more than the entire Middle East’s electricity use.
IEA
The IEA emphasized that when it comes to data centers, “plausible high and low sensitivities do not change the outlook fundamentally,” meaning that regardless of factors such as how quickly renewables and other low-emission energy sources are able to ramp up or the rate at which computing efficiency improves, data centers are poised to be a small piece of the overall pie.
The authors even sound an optimistic note as they urge readers to consider the positive impacts that artificial intelligence could have on the energy sector at large, writing that “the potential implications of AI for energy are broader [than just their data center electricity use] and include improved systems coordination in the power sector and shorter innovation cycles.” As of now, folks can only guess as to whether the net benefits of AI will be positive or negative from an emissions standpoint. But the report again sounded relatively cheery as it noted that there is “a set of low-emissions options available to meet this [data center] demand,” as cleaner electricity sources are growing much faster than data center electricity use.
The unbothered tone might seem surprising, given the general freakout over demand growth as well as dueling perspectives over how to meet it. But while it’s important to put these numbers in perspective, that task shouldn’t be an excuse not to act. After all, even “a small percent of the pie” still leads to some pretty big figures. For example, say data centers comprise a conservative 5% of global electricity demand growth between now and 2030. That would mean an additional 338 terawatt-hours of electricity demand by the end of the decade, an estimate the IEA says could vary by as much as 170 terawatt-hours. So on the high end, global growth in data center electricity demand could reach around 500 terawatt-hours by 2030, nearly a quarter of total U.S. electricity generation last year.
So while this might not level up to a crisis on a global scale, it’s still very much a problem worth mitigating — all the more so because data centers are heavily geographically concentrated, meaning local grid impacts will be felt acutely. Back in April, Jonathan Koomey, an independent researcher, lecturer, and entrepreneur who studies the energy and environmental impacts of information technology, discussed this very issue with Heatmap’s own Shift Key co-hosts, Robinson Meyer and Jesse Jenkins. As Koomey put it, “A place like Ireland that has, I think at last count 17%, 18% of its load from data centers, if that grows, that could give them real challenges. Same thing with Loudoun County in Virginia.”
The IEA also acknowledges this reality, noting that even if, globally, there’s enough clean energy to go around, local constraints on generation and grid capacity could be severe. But as Koomey told Heatmap — and as, perhaps, the IEA is trying to tell us all — “it is not a national story. It is a local story.”