Tech giants set to pay through the nose for nuclear power thats still years away

Tech companies, including Google, Amazon, and Microsoft, are entering costly agreements for nuclear power to meet their growing energy demands for data centers. Investment bank Jefferies warns that these firms may be overpaying for future energy sources, as the nuclear projects they are investing in, such as small modular reactors (SMRs), are still in development and not expected to produce energy until the 2030s. Google has signed a deal with Kairos Power for nuclear energy, while Amazon is investing $500 million in three companies to develop SMRs in Virginia and Washington. Microsoft has also established a power purchase agreement to restart the Three Mile Island plant. Jefferies notes that the SMRs will likely be more expensive than traditional nuclear reactors, which take years to build and may not meet the immediate energy needs of data centers. The report highlights the importance of "additionality" in energy generation, indicating that existing nuclear power may not suffice for the anticipated growth in data center energy demand, which could reach 600 TWh by 2030. The tech giants are facing potential costs of $60 to $85 per MWh for nuclear energy, with the possibility of premium pricing for dedicated nuclear output. This situation raises questions about the viability of existing nuclear power agreements and the long-term strategy of these companies in securing reliable, clean energy.

- Tech companies are investing heavily in future nuclear power projects.

- Small modular reactors (SMRs) are still under development and won't produce energy until the 2030s.

- The cost of nuclear energy for these companies may exceed market prices.

- Existing nuclear capacity may not meet the growing energy demands of data centers.

- The focus on new clean energy sources may undermine the value of existing nuclear agreements.