AI and Nuclear Power on the Susquehanna River:
More Questions than Answers.
February 1, 2025
The EFMR Monitoring Group is a non-profit, non-partisan organization which monitors radiation levels surrounding Peach Bottom Atomic Power Station, Susquehanna Steam Electric Station and Three Mile Island Nuclear Station.
In December, Governor Shapiro filed a lawsuit with federal energy regulators to prevent energy price hikes on 65 million consumers, including 13 million Pennsylvanians.
Governor Shapiro’s work to find a pathway to resolving this lawsuit with PJM has averted runaway prices and will save Pennsylvanians money on their electricity bills.
January 28, 2025
Harrisburg, PA – Today, Governor Josh Shapiro announced he has reached an agreement with PJM Interconnection on a plan to resolve his recent lawsuit and to save consumers over $21 billion over the next two years. In December, Governor Shapiro filed a complaint with the Federal Energy Regulatory Commission (FERC)(opens in a new tab) against PJM Interconnection, criticizing flaws in PJM’s capacity auction design that threatened to impose significant new price increases. The agreement will avoid historic price hikes on consumers across all 13 states PJM serves, including Pennsylvania.
Left unaddressed, PJM’s next capacity auction scheduled for July 2025 would have resulted in billions in unnecessary energy costs for 65 million people across the region. The Governor worked with PJM to significantly lower the capacity auction price cap – from over $500/Megawatt-Day to $325/MW-Day – averting a runaway auction price that would have unnecessarily increased energy bills.
The Commonwealth is a leading producer of energy and the nation’s largest exporter of electricity – nearly a century ago, Pennsylvania helped to found PJM, and today still serves as a generation backbone for the region. At the same time it has led this fight against unnecessary price increases on consumers, the Shapiro Administration is committed to meeting the need for new generation by getting more power projects built in Pennsylvania as part of an “all-of-the-above” energy strategy to create jobs, reduce emissions, and ensure safe, reliable, affordable power for Pennsylvanians for the long term.
“When PJM’s next auction was set to result in historic price hikes, I filed a lawsuit to stop this price hike on consumers and defend Pennsylvanians,” said Governor Shapiro. “PJM did the right thing by listening to my concerns and coming to the table to find a path forward that will save Pennsylvanians billions of dollars on their electricity bills. My Administration will continue to work to ensure safe, reliable, and affordable power for Pennsylvanians for the long term.”
PJM operates a capacity market, which means that operators are paid to commit to providing energy in the future. Over the last several years, demand for energy has risen rapidly but PJM has been slow to allow new power sources onto its grid – and as a result, PJM capacity prices have skyrocketed. PJM’s 2025/26 capacity auction, held in July 2024, resulted in costs of $14.7 billion – an over 800 percent increase from the prior year.
The Governor pushed PJM to reduce their price cap, and a diverse coalition came together support the Governor’s message, including four governors(opens in a new tab), energy and consumer advocates, and the Organization of PJM States (OPSI). The Shapiro Administration’s energy leadership promises to save the PJM region over $21 billion on utility bills in the next two years.
PJM and the Shapiro Administration have agreed to a path forward for the complaint, subject to consultation with PJM members and the PJM Board of Managers. In order to avoid further delays to the auction schedule, PJM will soon seek a FERC order by proposing a cap and floor mechanism through an FPA section 205 filing with the FERC.
This resolution follows over a year of engagement with PJM. Governor Shapiro continues to repeatedly(opens in a new tab) press for long-term solutions that address increasing costs, urging PJM to:
Reopen their closed interconnection queue(opens in a new tab) to get new projects online, like the restart of Three Mile Island in Pennsylvania;
Rely on member states to help determine which projects are ready(opens in a new tab) and to speed up project approvals like the Governor has done in Pennsylvania;
Implement new best practices established by FERC(opens in a new tab) in order to be better prepared in extreme weather scenarios and ensure affordable, reliable power year-round; and
Reform the capacity market(opens in a new tab) to more accurately reflect real world conditions, ensuring grid reliability while saving consumers money on their utility bills.
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https://techcrunch.com/2025/
Chinese AI startup DeepSeek stunned the world with the release of its R1 model, which appears to perform nearly as well as leading models from Google and OpenAI, despite the company’s claim that it used a relatively modest number of GPUs to train it.
DeepSeek’s relative efficiency has experts and investors questioning whether AI really needs the massive hardware outlays everyone had been predicting. And that could change data center demand — and the energy needed to power them.
The company claims it ran 2,048 Nvidia H800 GPUs for two months to train a slightly older model, a fraction of the compute that OpenAI is rumored to use.
Few companies are as exposed as Nvidia, the share price of which was down 16% at the time of publishing. Perhaps even more vulnerable are the startups and power producers that are betting big on new nuclear and natural gas capacity.
Nuclear power, in particular, has been on the cusp of a renaissance for years, driven by advances in fuel and reactor designs that promise to make a new generation of power plants safer and cheaper to build and operate. Until now, there was little reason to blaze ahead. Nuclear is still expensive relative to wind, solar, and natural gas. Plus, next-generation nuclear has yet to be tested at commercial scale.
The surge in power demand from AI changed the equation. With data centers predicted to consume as much as 12% of all electricity in the U.S. — more than triple their share in 2023 — and forecasts of underpowered AI data centers by 2027, tech companies have been racing to secure new supplies, and throwing billions of dollars at the problem. Google has pledged to buy 500 megawatts of capacity from nuclear startup Kairos, Amazon led a $500 million investment in another nuclear startup, X-Energy, and Microsoft is working with Constellation Energy on a $1.6 billion renovation of a reactor at Three Mile Island.
But what if the problem has been overblown?
There is no hard and fast rule suggesting that the only way to improve AI performance is to use more compute. For a while, that tactic worked well, but more recently, more compute hasn’t yielded the same results. AI researchers have been casting about for solutions, and it’s possible that DeepSeek found one for its R1 model.
Not everyone is convinced, of course.
“While DeepSeek’s achievement could be groundbreaking, we question the notion that its feats were done without the use of advanced GPUs,” Citigroup analyst Atif Malik wrote.
Still, history suggests that even if DeepSeek is hiding something, someone else will probably find a way to make AI cheaper and more efficient. After all, it’s easier and potentially faster to task some PhDs with developing better models than it is to build new power plants.
The current wave of new reactors aren’t scheduled to come online until 2030, and new natural gas power plants won’t be available until the end of the decade at the soonest. In that context, tech companies’ power investments appear to be hedges in case their software bets don’t pan out.
If they do, expect tech companies to scale back their power ambitions. When given the choice between spending billions on physical assets or software, tech companies almost always chose the latter.
Where will that leave nuclear startups and energy companies? It depends. Some might be able to produce power at a low enough cost that it won’t matter if AI’s power needs ebb. The world is electrifying, and even before the AI bubble started inflating, demand for electricity was expected to grow.
But absent demand from AI, those cost pressures are probably going to increase. Wind, solar, and batteries are cheap and getting cheaper, and they’re inherently modular and mass-produced. Developers can roll out new renewable plants in phases, delivering electricity (and revenue) before the entire project is complete while offering some control over their future in the face of uncertain demand. The same can’t be said of a nuclear reactor or a gas turbine. Tech companies know this, which is why they’ve been quietly investing in renewables to power their data centers.
Few people predicted the current AI boom, and it’s unlikely that anyone knows how the next five years will play out. As a result, the safer bets in energy will probably flow to proven technologies that can be rapidly deployed and scaled according to a rapidly evolving market. Today, renewables fit that bill.
Josh Saul 3 min read
In This Article:
(Bloomberg) -- NextEra Energy Inc., one of the world’s biggest suppliers of wind and solar power, is moving to expand its natural gas and nuclear generation in a bid to meet the surging demand for electricity sparked by artificial intelligence.
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The company has partnered with gas turbine manufacturer GE Vernova Inc. to build power generation for data centers and factories, Chief Executive Officer John Ketchum said on an earnings call Friday. NextEra has also taken the first step to restarting its shuttered Duane Arnold nuclear plant in Iowa.
US power consumption is rising, driven by data centers and AI, along with manufacturing and the increasing electrification of the economy. That’s spurred demand for new gas plants and reawakened interest in nuclear energy. The electricity boom has sparked new ideas and deals that would once have been unthinkable.
“We’re already having a lot of success with renewables, but let’s capitalize on the need for capacity and gas generation,” Ketchum said in an interview. By partnering with GE Vernova, “we can find multi-gigawatt solutions for these customers, not just gas but combined with renewable solutions,” he said.
Ketchum also said that strategy will be helped by the Trump administration’s strong support for gas power.
NextEra shares gained as much as 5.8% in New York. The company also owns Florida Power & Light, one of the largest US utilities.
“It can’t be underestimated how much this industry has changed in a very short amount of time, really the last 15 months to 18 months,” Rebecca Kujawa, head of subsidiary NextEra Energy Resources, said on the call. “We’ve seen a lot of increase in demand for natural gas.”
GE Vernova has said data centers favor gas over intermittent renewable sources like wind because the facilities require power around the clock. Scott Strazik, GE Vernova’s CEO, said this week that orders for gas turbines more than doubled to 20 gigawatts last year and he expects 2025 to be even stronger.
NextEra has asked US regulators for a licensing change for the Duane Arnold nuclear plant, a first step toward potentially restarting the Iowa facility.
NextEra aims to get the reactor up and running again as early as the end of 2028, it said Friday in an earnings release. “This is much faster than we and investors we speak to expect,” Jefferies LLC analysts led by Julien Dumoulin-Smith said in a note.
The request was filed with the Nuclear Regulatory Commission on Thursday, according to a company representative. NextEra had previously said it was interested in reviving the plant.
NextEra is not the only company pursuing efforts to revive reactors. South Carolina utility Santee Cooper said Wednesday it’s seeking bids to restart construction of two reactors at the V.C. Summer Nuclear Station. And in September, NextEra rival Constellation Energy Corp. announced plans to restart a reactor at the Three Mile Island plant in Pennsylvania to supply Microsoft Corp.
The 600-megawatt Duane Arnold plant closed in 2020 after its biggest customer decided to exit its power-purchase agreement. The facility was also damaged in a windstorm that same year, prompting the company to close the plant two months earlier than planned.
NextEra has said Duane Arnold, which went into service in 1974, uses less-complex technology that may make it easier to revive than newer nuclear plants. But Jefferies & Co. analyst Julian Dumoulin-Smith has said bringing the facility back into service would be costly and there’s no guarantee the economics would be justified.
(Updates with comment from CEO in fourth paragraph, comment from analyst in 10th paragraph.)
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Nuclear Regulatory Commission - News Release
No: IV-25-001 January 22, 2025
Contact: Victor Dricks, 630-829-9662 Tressa Smith, 817-200-1172
Matthew J. Marzano, nominated as an NRC Commissioner by President Joe Biden and confirmed by the U.S. Senate, was ceremonially sworn in today by Chair Christopher T. Hanson. His term expires June 30, 2028.
Three Mile Island Nuclear Plant Unit 2 decommissioning and abandoned mine land reforestation.The Council will also hear an update on agency activities from Acting DEP Secretary Jessica Shirley.Data CentersCommissioner Kim belly Barrow, Vice Chair of the Public Utility Commission will provide a presentation to Council on the impactof data center development on electricity demands and the grid in Pennsylvania and the region.The PUC held a technical conference on November 25 on the adequacy of electricity supplies in Pennsylvania, including thegrowing electricity demand from the development of data centers.The PUC has a deadline of January 9 to submit follow-up comments on the issue to help the Commission identify issuesand actions it can take to address supply and grid issues.TMI Unit 2 DecommissioningThe damaged Unit 2 nuclear power plant at Three Mile Island in Dauphin County is being decommissionedby TMI-2 Solutions,an Energy Solutions company. The decommissioning is unrelated to the proposed restart of TMI Unit 1 to supply power to Microsoft data centers.Joseph Lynch, Energy Solutions, will provide the presentation on the status of decommissioning activities.
Company to Pursue Appeals Court Option in Wake of FERC Order on Data Center and Nuclear Plant Talen Energy on Dec. 23 said it intends to pursue appellate remedies after the Federal Energy Regulatory Commission said that it would not immediately address a Talen Energy request for rehearing of a Commission order that rejected an amended Interconnection Service Agreement among PJM, Susquehanna Nuclear LLC and PPL Electric Utilities tied to a data center in Pennsylvania. |