Tech giant Amazon and utility company Dominion Energy formed a deal to look at ways to develop nuclear energy on a small scale in Virginia to meet the rising energy needs of data centers that power artificial intelligence.
The Wednesday announcement outlines the pair’s intent to develop and finance small modular reactors that can generate around-the-clock, carbon-free power with a smaller footprint and lower upfront capital costs. Nuclear energy has served as a potential answer for tech giants with expanding power needs to produce electricity while meeting pledges to reduce their use of carbon emissions that can harm the environment.
Given growing power demand in places like Northern Virginia — the world’s largest data center market — companies like Amazon have looked to take advantage of alternative power sources. Power demand in Virginia is growing by more than 5% annually and is expected to double in the next 15 years, according to a release from Dominion.
"Bringing new sources of carbon-free energy to the grid is an important part of Amazon's commitment to serve our customers and achieve net-zero carbon across our operations by 2040," Kevin Miller, Amazon's vice president of global data centers, said in the release.
Amazon opened the first phase of its East Coast corporate headquarters in Northern Virginia in 2023.
In July, Dominion Energy announced a request for proposals from nuclear technology companies to evaluate the feasibility of developing a small modular reactor at its North Anna Power Station in Louisa County, Virginia, near Richmond, though it has not yet committed to building anything, the release said.
Amazon also has agreements for nuclear energy projects in Washington state and Pennsylvania. Separately, Amazon announced Wednesday it is leading the $500 million investment into X-energy Reactor Co., a developer of advanced nuclear reactors and fuel technology. The investment will be used to fund the completion of X-energy's reactor design and licensing as well as the first phase of its fuel fabrication facility in Oak Ridge, Tennessee, according to a statement from X-energy.
Amazon and X-energy are also working to bring more than 5 gigawatts of new nuclear energy projects on line across the country by 2039 using small modular reactors.
The power capacity of small modular reactors is about one-third of the generating capacity of traditional nuclear power reactors, according to the International Atomic Energy Agency, but can be factory-assembled and transported to a location for installation.
Rising nuclear demand
The use of nuclear power has faced public opposition since an accident at Three Mile Island in Pennsylvania in 1979 raised concerns about the dangers, as well as the explosion of a nuclear reactor in Chernobyl, Ukraine, in 1986.
However, the U.S. nuclear power industry is undergoing a revival after decades of little activity in the development of new nuclear plants. Nuclear is seen as a potential alternative to fossil fuel-based power generated from oil and coal because nuclear does not produce carbon emissions that contribute to climate change.
Google announced this week it signed an agreement to get electricity from small nuclear reactors built by a California startup, CoStar News previously reported.
Other companies have also jumped on the nuclear bandwagon in recent months.
Microsoft signed an agreement to restart a nuclear reactor on Three Mile Island in Pennsylvania and buy the energy it produces to meet its goal to power its data centers with carbon-free energy, CoStar News previously reported in September.
The agreement between Amazon and Dominion Energy comes the same day the U.S. Department of Energy opened applications for up to $900 million in funding to support the initial domestic deployment of next-generation small modular reactors.
“Revitalizing America’s nuclear sector is key to adding more carbon free energy to the grid and meeting the needs of our growing economy — from AI and data centers to manufacturing and healthcare,” U.S. Secretary of Energy Jennifer M. Granholm said in a release.