WAIT, WHAT?!
Constellation to restart Three Mile Island unit, powering Microsoft
Constellation has signed a 20-year power purchase agreement with Microsoft that will see Three Mile Island unit 1 restarted, five years after it was shut down.
Constellation purchased the 837 MWe Three Mile Island Unit 1, in 1999. The unit, which had enough capacity to power 800,000 homes, was retired prematurely for economic reasons in 2019. In its last year of operation, the plant was producing electricity at maximum capacity 96.3% of the time - well above the industry average and employed more than 600 full-time workers.
The Unit 1 reactor is located adjacent to TMI Unit 2, which was shut down in 1979 after an accident which resulted in severe damage to the reactor core and is in the process of being decommissioned by its owner, Energy Solutions.
Constellation says "significant investments will be made to restore" unit 1 "including the turbine, generator, main power transformer and cooling and control systems. Restarting a nuclear reactor requires US Nuclear Regulatory Commission approval following a comprehensive safety and environmental review, as well as permits from relevant state and local agencies. Additionally, through a separate request, Constellation will pursue licence renewal that will extend plant operations to at least 2054".
The plant is to be renamed the Crane Clean Energy Centre - after Chris Cane, who was CEO of Constellation's parent company and passed away in April. The aim is for it to be online in 2028. Constellation says it aims to operate it for decades to come, and will create 3400 direct and indirect jobs and deliver more than USD3 billion in state and federal taxes
"This agreement is a major milestone in Microsoft's efforts to help decarbonise the grid in support of our commitment to become carbon negative. Microsoft continues to collaborate with energy providers to develop carbon-free energy sources to help meet the grids' capacity and reliability needs," said Bobby Hollis, vice president of energy, Microsoft.
Joe Dominguez, president and CEO, Constellation, said: "Powering industries critical to our nation’s global economic and technological competitiveness, including data centres, requires an abundance of energy that is carbon-free and reliable every hour of every day, and nuclear plants are the only energy sources that can consistently deliver on that promise. Before it was prematurely shuttered due to poor economics, this plant was among the safest and most reliable nuclear plants on the grid, and we look forward to bringing it back with a new name and a renewed mission to serve as an economic engine for Pennsylvania."
Governor Josh Shapiro said: "Under the careful watch of state and federal authorities, the Crane Clean Energy Center will safely utilise existing infrastructure to sustain and expand nuclear power in the Commonwealth while creating thousands of energy jobs and strengthening Pennsylvania’s legacy as a national energy leader."
Michael Goff, Acting Assistant Secretary, Department of Energy's Office of Nuclear Energy, said: "Always-on, carbon-free nuclear energy plays an important role in the fight against climate change and meeting the country's growing energy demands."
Friday's announcement could see the unit become the second in the USA - and the world - to return to operational status after being shut down for decommissioning. Holtec International is currently working to bring the Palisades single-unit pressurised water reactor in Michigan, which closed in 2022, bring back into service and is aiming to repower the plant by the end of 2025.
Earlier this year, the US Department of Energy Loan Programs Office conditionally committed up to USD1.52 billion for a loan guarantee to Holtec Palisades for the project, and in June US Energy Secretary Jennifer Granholm told Reuters she would be "surprised" if the office was not talking to other owners of shuttered plants about potential restarts.
BlackRock and Microsoft Partner on $30 Billion AI Infrastructure Fund
- BlackRock and Microsoft are launching a $30 billion AI infrastructure fund to address the growing energy demands of artificial intelligence.
- The fund will invest in data centers, energy projects, and other infrastructure needed to support AI development.
- Nvidia will provide advisory on factory design and integration, while MGX and Global Infrastructure Partners are also involved.
As we have been writing for the better part of the last year, the next AI trade continues to look like it's going to be energy. And now, both BlackRock and Microsoft are making it known that they understand this, too.
Yesterday it was reported that the two industry giants are prepping the launch of a $30 billion AI investment fund that'll see Microsoft build data centers and energy projects to meet the demands of AI, according to the Financial Times.
BlackRock’s new infrastructure investment unit, Global Infrastructure Partners, is launching a major investment fund with Microsoft and Abu Dhabi’s MGX as general partners. Nvidia will provide advisory on factory design and integration.
The FT wrote that the partnership aims to tackle the massive power and infrastructure needs of AI development, which is expected to strain current energy systems. AI’s computing demands far exceed past technologies.
The partnership seeks to raise up to $30bn in equity, with plans to leverage an additional $70bn in debt.
In a statement, Larry Fink said: “Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multitrillion-dollar long-term investment opportunity.”
Brad Smith, Microsoft’s president, added: “The country and the world are going to need more capital investment to accelerate the development of the AI infrastructure needed. This kind of effort is an important step.”
Jensen Huang of Nvidia added: “Accelerated computing and generative AI are driving a growing need for AI infrastructure for the next industrial revolution.”
The upcoming fund is the latest by a major asset manager to address the rising energy needs of generative AI and cloud computing. Earlier this year, Microsoft committed $10bn to renewable energy projects with Brookfield Asset Management and aims for 100% zero-carbon energy by 2030, the Financial Times concluded.
The International Energy Agency predicts global electricity consumption by data centers could exceed 1,000 terawatt-hours by 2026, more than double the 2022 level.
In the U.S., which houses a third of the world’s data centers, electricity demand is surging for the first time in 20 years. A report from Grid Strategies shows five-year electricity demand projections in the U.S. have nearly doubled, from 2.6% to 4.7%.
For those who missed it, in our note "The Next AI Trade" from April of this year, we outlined various investment opportunities for powering up America, most of which have dramatically outperformed the market.
A favorite name of ours has been the Sam Altman-backed Oklo, which we have highlighted as the potential solution to the extreme forthcoming demands in energy as a result of artificial intelligence. It makes nuclear power plants, ranging from 15 MWe to 50 MWe, utilizing liquid metal reactor technology, in soon-to-be everywhere small modular reactors.
By Zerohedge.com
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