Google, Amazon, Microsoft dive into costly deals that aren't generating anything yet
Nuclear power contracts signed by hyperscalers show they're desperate for reliable"clean and green" energy sources to feed their ever-expanding datacenter footprints, however, investment bank Jefferies warns that these tech giants are likely to end up paying over the odds to get it., even though the prospectve supplier hasn't yet developed the small modular reactors it proposes to fulfill the contract with.
"There are two key concepts here: additionality, i.e. new generation to match new load; and matching clean energy generation with each hour of load," the Jefferies report states. Existing nuclear fails the"additionality" test despite offering 24/7 clean energy, whereas intermittent renewables lack the reliable capacity factor datacenters require.
Also notable is that the Chocolate Factory is"not prioritizing speed to market," with Kairos Power's first SMR not expected to be online before 2030, followed by additional reactor deployments through to 2035. This could be seen as Google taking a long-term view on energy supply, or it may simply reflect the reality that SMRs just aren't ready yet.
As far as merchant or unregulated nuclear generation goes, there is only enough capacity to meet expected growth in datacenter power demand through 2026, with a likely shortfall in the following years. Even if only hyperscale companies are considered, their estimated 425 TWh demand by 2030 will be 25 percent higher than the forecast merchant nuclear plants' output.
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