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Three Mile Island
Ted Merz
September 24, 2024
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The Three Mile Island generator was for decades a symbol of the risk of nuclear energy.
Now, it may become a symbol of three powerful new trends: the insatiable need for power among tech companies, a remarkable shift in public opinion and a desire for carbon-free energy.
If you missed it, Three Mile Island, infamous for a 1979 accident, will be re-opened by Constellation Energy, which signed a 20-year agreement with Microsoft to power data centers, crucial for AI and cloud computing.
The news reverberated personally. My father worked as the head of systems operations at a company that owned a stake in Three Mile Island. I remember that day vividly and talking about it at dinner.
The fallout was intense. It changed the political landscape in the country and even at home because my father had invested a chunk of savings in the shares of his employer, GPU, Inc. The shares plunged.
Last week’s announcement prompted me to drill down on the landscape for power in general and nuclear in particular. Since the emergence of Generative AI two years ago, we’ve heard about the urgent need among tech companies for cheap, reliable power.
The Three Mile Island deal underscored that in a dramatic way.
I ran an analysis using SigTech’s MAGIC application, an AI powered system used by quants.
MAGIC forecast AI-driven data centers will consume 200 terawatt-hours (TWh) of electricity annually by 2025. Keeping up with demand could require as much as $20 billion in annual energy spending.
The huge increase is driven by advanced GPU usage. Training a large AI model like GPT-3 consumes about 1,300 megawatt-hours (MWh), a significant increase in energy usage.
There are about a dozen mothballed reactors in the U.S. Building a new plant typically takes 6 to 8 years, though delays can extend the timeline.
In addition to the Microsoft deal:
–AWS is acquiring a data center powered by the Susquehanna Steam Electric Station, a nuclear plant in Pennsylvania, for $650 million.
–Google is exploring the use of nuclear power as part of its strategy to power data centers.
-Oracle is planning a data center powered by small modular nuclear reactors.
SigTech’s analysis stressed the shift was also driven by three new factors:
–The need for uninterrupted power for data centers.
–Public pressure to reduce carbon footprints.
–A shift in public opinion in favor of nuclear power.
We’ve come a long way in 45 years.
According to Pew Research, more than half of Americans favor more nuclear plants, a shift since the accident, which was a combination of mechanical failures and human error.
While some radioactive gas was released, the health impact was minimal.
My father wasn’t at the plant when the accident occurred.
He told me that he later visited Three Mile Island to check it out.
It was probably a bad idea, but he wanted to see it for himself.
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BRIEF OBSERVATIONS
WRITING ONLINE: Rich Handler, the CEO of Jefferies, is one of the few executives who regularly write online to share observations. I love the No. 1 lesson he posted on the anniversary of the Lehman bankruptcy: “No such thing as a slight liquidity crisis.”
FREDDIE MERCURY DAY: It was Freddie Mercury’s birthday recently and I happened to walk by this pop-up bar built under a formerly vacant bridge that was celebrating the event. They had booked a series of bands to play Queen covers.
FREDDIE MERCURY: Stumbled across this gem, a photo of Freddie Mercury when he was 12 in India. London and Queen lay ahead. A good reminder of how much can change.
CHAPPEL ROAN: When she was 17, Roan uploaded an original song, "Die Young", to YouTube. She was signed to Atlantic Records shortly thereafter. She just inked a new deal that was evidently very lucrative.
GENERATIVE AI: Elon Musk is championing a large language model called Grok. I asked it to name the four hosts of the All-In Podcast. It got three right and then hallucinated Bill Ackman, a hedge fund manager. It’s a reminder AI models have a way to go.
