Nuclear power is coming back to Pennsylvania’s Three Mile Island–thanks to the growing power demand from data centers. In 1979, the world watched as the plant became synonymous with nuclear anxiety when one of its reactors overheated and partially melted down.
Despite the infamous incident, operators restarted the undamaged reactor at the plant in 1985. It continued to hum along for more than three decades. By 2019, however, the economic tides had turned against it. Exelon Corp., grappling with high operating costs compared to ones for the cheap natural gas flooding the energy market, announced that it was shutting down the plant’s remaining undamaged reactor.
Soon, however, the reactor will generate power once again, funded by Microsoft. The company inked a 20-year deal with the plant’s current owner, Constellation, to purchase all of the plant’s electric generating capacity over the next 20 years for its data centers.
Data centers, the unseen backbone of our digital age, are growing at a rapid clip—and so are concerns about the sustainability of power sources that feed and cool the servers inside them.
The cause of the growth? Well, it starts with us—reading this article online before we log into a Microsoft Teams meeting or fire off an email. Whenever we use an app on our smartphones or ask ChatGPT a question, our virtual activity is processed or stored in data centers, buildings filled with supercomputer servers.
The surge in online activity, which stems from shifts to hybrid and remote work, alongside the growing adoption of AI requiring high-density computing, is driving increased data center demand. We’re creating more data than we used to, and we’ll inevitably create even more—at a compound annual growth rate of 23 percent, through 2030, according to a report by JLL.
The greater the capacity, the greater the power required to process data and cool servers, which emit more heat the harder they work. Data centers will need three times their current power capacity by the end of the decade, McKinsey predicts.
“AI is a potentially very power-hungry application,” says Nic Bustamante, chief technology officer for Corscale, the sustainability-focused data center development affiliate of Affinius Capital and Patrinely.
As power needs increase, sustainability is becoming more of a concern, not just for the public but for data center companies themselves. These firms face an ongoing struggle to harmonize their ambitious climate commitments with the relentless surge in data demand that necessitates more data centers. Seeking to lower their carbon footprints, they navigate a patchwork of utility grids that don’t always have access to the ideal renewables for the job—with numerous complicated differences from state to state and even more from country to country.
Often, the process is complex, involving a variety of strategies for each data center rather than a lone one.
“There’s no silver bullet,” Bustamante says. “There’s no magic wand . . . we can wave that fixes all of the energy problems.”
Hyperscalers and the scalability of renewable energy
Major players in the data center industry include developers and third-party operators who lease space to multiple companies in so-called colocation or retail data centers. But the bulk of the growth today comes from “hyperscalers”—tech companies such as Amazon (AWS), Google (Google Cloud), Microsoft (Azure), and Meta, ones that have large and variable user bases and often need to scale up their data center infrastructure quickly, either by pre-leasing entire campuses or by owning those facilities themselves. The total capacity of hyperscale data centers has doubled over the last four years—and is expected to double again in the next four, forecasts Synergy Research Group.
Hyperscalers, and the developers and investors that build their facilities, tend to have ambitious climate goals. Amazon aims to reach net zero emissions by 2040. Microsoft strives to be carbon-negative, water-positive, and zero-waste before 2030. Digital Realty Trust, one of the largest data center operators—which recently partnered with Blackstone to develop $7 billion worth of data centers—set targets to reduce its scope 1 and scope 2 emissions by 68 percent by 2030, versus 2018 levels, according to Sormeh McCullough, Digital Realty’s director of ESG.
“We want to build, power, and operate better, more sustainable data centers,” McCullough says.
Not all green power sources can do the job. Data centers, which power critical systems related to such things as national security and military communications, require a high level of redundancy. They need both a continuous power supply—often on multiple feeds—and a source of backup generation, which usually entails diesel generators, though they are used only for brief periods, in the event of an outage or for testing.
“Data centers are mission critical,” says Jeffrey Gyzen, the global practice group director for mission-critical and industrial facilities at the consulting firm Arcadis Inc.
“They require upwards of what we call five nines of reliability . . . 99.999 percent uptime. That means they can’t go down [for more than] two minutes a year.”
Wind and solar power, though sustainable, are intermittent sources of energy that depend on weather. Alone, they can’t routinely provide the constant, reliable power that data center servers require. Pairing them with battery storage “typically can give you only about four hours’ worth of power,” Gyzen says. “That’s not enough if you have a long outage in a utility grid [used basically to] keep your data center up and running.”
Nuclear’s promise and PR problem
Using nuclear power to run data centers holds promise, as solutions go. Nuclear power is well suited for data centers because it’s accessible 24/7 and has a higher energy density than coal—meaning that a small amount of nuclear fuel can produce a large amount of energy. It also requires far less land than do wind or solar farms to produce the same amount of power.
The greenhouse gas emissions profile of nuclear power is incredibly low, as such plants emit only water in the form of steam. In 2020, the global average of carbon dioxide equivalent emitted per kilowatt-hour (CO2e/kWh) generated over the lifetime of a nuclear energy plant is 4 grams, according to a study in Nature. That equals the profile of wind power and is less than solar power (6 grams) and coal power (109 grams).
In the United States, however, nuclear power accounted for less than 19 percent of the national grid mix in 2023, according to the Energy Information Administration.
Nuclear power in the U.S. still has to overcome what Gyzen calls its “public relations issue,” thanks to the Three Mile Island incident. The fact that the reactor released only a small amount of radiation before successfully shutting off—for each of the 2 million people nearby, it amounted to less than that of a chest X-ray—doesn’t seem to have improved the perception. Nor does the fact that no injuries, deaths, or direct health effects were caused by the accident, according to the U.S. Department of Energy (DOE). In a recent blog, the DOE, eager to change public perception, called nuclear plants “among the safest and most secure industrial facilities in the world.”
Today’s nuclear reactors have multiple safety systems to control and limit nuclear reactions, including containment barriers, fuel design, control rods, and cooling systems. Yet they have been decommissioned at a rate faster than the one at which they are built, making it hard for data center companies to find grid connections to nuclear power.
Their scarcity, alongside strict safety regulations, has significantly increased the costs of developing nuclear plants. Getting nuclear projects to scale requires “the financials to paper correctly, and that’s always been hard with nuclear,” Bustamante says.
Nuclear energy is undergoing a resurgence, however—one funded, in part, by hyperscalers. Thanks to Microsoft, Three Mile Island is expected to reopen by early 2028, under a new name: the Crane Clean Energy Center. Microsoft has already purchased nuclear energy from Constellation for a data center in Virginia.
Some data center companies are pursuing nuclear power on site by using small modular reactors (SMRs), which have about a third of the generating capacity of traditional nuclear power reactors and operate without a connection to the utility grid.
Google announced in October 2024 that it will purchase power from a fleet of SMRs made by Kairos Power.
“The initial phase of work is intended to bring Kairos Power’s first SMR online quickly and safely by 2030, followed by additional reactor deployments through 2035,” the company said in a blog post.
On-site generation
On-site SMRs don’t just provide greener power. They also power data centers in areas that aren’t served by the electrical utility grid. Data center companies are increasingly embracing SMRs and other on-site generation options as their construction timelines are often delayed by two to four years because of the wait times for utility power, according to CBRE.
“The alternative [is to] create your own power,” Gyzen says. “And in doing that, you can actually create more sustainable power, greener power.”
On-site generation opens up possibilities for data center development in locations that might otherwise be constrained by power availability. Gyzen says SMRs are changing public perception of nuclear energy.
“They’re a cleaner, greener solution [to] trying to cut . . . our greenhouse gas emissions and meet the power demands of not only the data center industry but [also of other] industrial [uses],” Gyzen says.
Rooftop solar is another on-site solution that developers are using as part, but not all, of their energy mix.
“Rooftop solar panels actually . . . produce [only] up to 10 percent of the electricity for us because . . . the area of the rooftop is very limited,” says Corinne Chen, who heads ESG for the developer GLP, which is installing them as a small part of the energy mix that powers its centers.
Regulatory challenges
In the U.S., regulatory barriers can prevent green solutions from scaling. Utility grids are not connected, and renewable plants often exist far from population centers. Connecting them requires new transmission lines, but the process of getting them is plagued by lengthy schedules and delays, according to Daniel Crosby, CEO of Legend Energy Advisors.
“With lead times now on transmission components, a lot of data centers are now running for long duration [on backup power],” Crosby says “Years, in many cases.”
The availability of renewable sources at scale also varies greatly from region to region and country to country.
“In Hong Kong, we use a lot of nuclear power because [there’s] a nuclear station in Guangzhou that actually provides us with renewable energy,” says Rui Hua Chang, a ULI global governing trustee for the APAC region and the Hong Kong–based managing director of business management and investment at the development and investment firm ESR Group.
“The rest of the world . . . especially the E.U. . . . is far ahead of the U.S. with regard to nuclear power,” Gyzen says.
Achieving climate goals in a challenging landscape
Directly developing large-scale and net-new renewable energy generation projects has the biggest impact, but because that’s not always easy to achieve, data centers are also trying to meet their goals in other ways.
PPAs and Renewable Energy Certificates (RECs)
PPAs involve data centers securing long-term contracts with renewable energy providers to buy electricity, aiding new project development and grid decarbonization.
These agreements, and similar structures such as green tariffs, add clean power to the local grid but don’t always directly power data centers due to location constraints. The clean power source needs to be very close to the facility to be able to do so. Given the land required for a renewable plant to generate the level of power data centers demand, that capability is complicated to achieve.
Renewable Energy Certificates (RECs) let data centers “offset” their nonrenewable electricity use by supporting renewable energy production elsewhere, which allows them to claim green credentials, even if their local power supply isn’t 100-percent renewable.
“The most forward-thinking of the technologists out there [are saying] offsetting isn’t enough, and it isn’t truly removing carbon,” Bustamante says. “We’re just trading it across borders and making it, you know, someone else’s problem short term, but frankly, it’s still everyone’s problem long term. So, let’s go invest in ways to . . . actually offset with clean generation.”
Direct investment
Bustamante pointed to direct investments from Google and Apple. In 2017, Google purchased a package of agreements for 1,600 megawatts (MW) that included 18 new energy deals.
“To ensure maximum impact, all of our latest deals meet the rigorous ‘additionality’ criteria we set out long ago for our energy purchases,” the company stated in a blog post. “This [condition] means we’re not buying power from existing wind and solar farms but instead are making long-term purchase commitments that result in the development of new projects.”
Apple directly invested in a portfolio of solar projects across Michigan, bringing 132 MW of clean energy online.
The DOE called data center demand an opportunity to drive renewable energy production.
Near-term [data center–driven] electricity demand growth is an opportunity to accelerate the build-out of clean energy solutions, improve demand flexibility, and modernize the grid while maintaining affordability.
Cooling
Cooling is another critical factor in data center sustainability. It accounts for nearly 40 percent of the total energy consumed by data centers, McKinsey and Company estimates.
Hyperscalers initially shifted to evaporative cooling, wherein water absorbs heat and evaporates it, as an alternative to energy-intensive air conditioning systems. In recent years, though, as the data density of servers increased, it’s been hard for evaporative cooling to scale without affecting local water supplies, according to Bustamante.
“We never conceptualized fifteen, twenty years ago, when we were moving to evaporative cooling as an industry, that we would use millions or tens of millions of gallons a day on a single site or a single building,” Bustamante says. “At some point, the scaling fell apart.”
Data center developers often look for connections to nonpotable water, such as treated wastewater, in the site selection process, which efficiently cools data centers and maintains local drinking water.
Increasing server densities have spurred the use of an emerging cooling method, direct-to-chip liquid cooling, according to Gyzen. This method more precisely cools high-heat components in computing systems, using less water and energy than traditional methods.
Five years ago, the typical density for a server cabinet was 8–10 kW, Gyzen says. Now, it’s common to see 50–100 kW per cabinet.
“Once you are above fifteen to twenty-five [kilowatts], you can’t use air cooling alone,” he says.
Corscale uses a closed-loop cooling system that can deploy both air and liquid cooling, according to Bustamante. “Our system is modular, allowing us to retrofit any kind of cooling that a customer may want,” he says. “This flexibility enables Corscale to adapt to regional water availability, a crucial consideration in arid areas like the western United States.”
Related reading:
- Renewable Energy Strategies
- Offsite Buyers Guide
- ULI Knowledge Finder: Local Guidelines for Data Center Development
