U.S. Government Grants $1.9 Billion Loan to Revitalize Google’s Nuclear Energy Initiative

In a significant development last October, Google announced plans to revive a nuclear power plant in Iowa. Now, its owner, NextEra Energy, has secured a $1.9 billion loan from the U.S. Department of Energy to support its revitalization.

This substantial funding marks the second major financial backing for nuclear initiatives, indicating that the previous administration perceives revitalized nuclear energy as essential for meeting electricity demands from tech firms powering their AI data centers. Previously, the Department of Energy provided a $1 billion loan to Constellation Energy for the reactivation of a reactor at Three Mile Island.

James Danly, the Deputy Secretary of Energy, mentioned that restarting the Iowa facility in 2029 is expected to reduce electricity costs, although he did not specify the mechanism behind this claim. According to NextEra CEO John Ketchum, 50 megawatts from the plant will be allocated to the local power cooperative, covering approximately 18% of Iowa’s energy demand growth since 2021, the year prior to the release of ChatGPT.

Reports suggest that Google plans to establish up to six data centers near the Duane Arnold Energy Center, which has been inactive since a significant storm damaged it in 2020. Instead of repairs, NextEra chose to decommission the facility, as the abundance of low-cost natural gas made nuclear power less competitive at the time.

However, the landscape has shifted dramatically in the last six years. Following a surge in AI adoption and the general electrification of the economy, utilities are now urgently seeking new electricity sources. Projections indicate that the electricity demand from new data centers could nearly triple by 2035.

Decommissioned nuclear plants are increasingly becoming attractive options for the tech sector to swiftly secure clean, reliable energy.

Microsoft entered into an agreement with Constellation Energy two years ago to recommence operations at the Three Mile Island reactor, which last functioned in 2019. This reactor is on track to restart in 2028 and is expected to produce 835 megawatts.

In another instance, Constellation Energy’s Clinton Clean Energy Center in Illinois was at risk of closure until it found a new client in Meta. The tech giant is purchasing all the clean energy credits from the 1.1 gigawatt facility. This arrangement allows Clinton to send power to the local grid, while Meta uses the certificates to offset its emissions elsewhere. For instance, Meta’s Hyperion AI data center will require energy equivalent to that produced by ten natural gas power plants, consuming more electricity than the entirety of South Dakota if completed.

Although Duane Arnold is a smaller facility, refurbishing it will add another 14 megawatts, increasing its total capacity to 615 megawatts.

Collectively, these three power plants represent some of the most immediately viable options for energy generation in the U.S. There may be a couple more candidates, as indicated by a report from UtilityDive, but these, including San Onofre in California, have been offline longer and would demand more effort to reactivate.