With all this buzz around nuclear deals and country agreements, you may be wondering, “What is driving demand for new nuclear?” Well, the answer is simple: customers. They come in all shapes and sizes from all over the world, just like the nuclear reactors themselves, but they all have one thing in common—they need energy and lots of it.
The Market
With global carbon emissions reaching more than 37 billion tons in 2022, greater attention is being placed on their source. Any individual or corporation that uses electricity, heat, or other forms of energy to fuel their day-to-day activities has a role to play in global emissions targets.
And projections on energy demand are growing at a staggering pace. In the U.S. alone, electricity usage by 2050 is expected to increase by nearly 27 percent. Large energy consumers like data centers—the backbone of our internet—and industrial companies require massive, reliable amounts of energy to power their operations.
If the source of that energy is unexpectedly unavailable, it’s bad for business—and, more often than not, it’s bad for all of us.
On top of addressing emissions and meeting power demands, customers are also concerned about affordability. Together, these factors make up the energy trilemma.
The Buyers
When it comes to nuclear energy and its customer base, it’s probably easier to ask, “Who isn’t interested?” Ultimately, it’s all about what the customer is looking for—and nuclear checks a lot of boxes.
AI and machine learning require large amounts of always-on electricity. Chemical processing and metal refineries require a steady source of heat to power their manufacturing needs. Agriculture and transportation giants are looking to fuel their operations with clean resources. Remote and disaster relief areas need clean, reliable alternatives to diesel generation.
And that’s just a small taste of the full customer buffet. Military bases, utility companies, and whole countries are looking at next-generation nuclear for its versatility, reliability, and affordability.
The Deals
Given the wide range of customer types, it’s not surprising how many moves are being made.
Countries like Bulgaria and Poland are signing agreements for both small and large reactors to fulfill their power needs. And Europe’s not the only region showing love to large nuclear reactors. Late last year, Westinghouse CEO Patrick Fragman said, “There are some American utilities which are very seriously talking with us about new AP1000s.”
In a landmark agreement, Microsoft agreed to buy nuclear energy from Constellation to power one of their data centers in Virginia. And Microsoft is building a team to help integrate SMR and microreactor technology into their business plans.
They’re not the only customer taking a serious look at smaller reactors. Dow Chemical chose their Seadrift, Texas, manufacturing facility to house their first SMR project with X-energy. Standard Power announced an agreement with NuScale to provide their SMR technology to two data center facilities in Ohio and Pennsylvania. And Westinghouse announced their microreactor design and secured their first customer—all in the same year.
Nowadays, it feels like new announcements are constantly being made.
Utility companies are including SMRs in their resource planning while also looking to extend the life of their current nuclear power plants. For example, Duke Energy recently proposed a plan that includes 600 MWe of new nuclear by 2035 and supports the license extensions of eleven existing reactors. Dominion Energy’s recent plan outlines five scenarios, four of which include the development of SMRs.
States are also indicating their support, with both Minnesota and Michigan passing ambitious Clean Energy Standards that include nuclear, while Idaho, Tennessee, and North Carolina passed measures to define nuclear as clean generation resources.
A recent report documented findings from conversations with members of the financial community, and the role next-generation nuclear will play in “industrial decarbonization” was listed as a major benefit.
James Walker, CEO of @nano_nuclear, making the case for microreactor technology as a potential solution to a range of customers—from remote desalination and medical facilities to maritime vessels.
— Nuclear Energy Inst. (@NEI) January 30, 2024
Looking forward to Day ✌️ of the #NuclearFinancingSummit! pic.twitter.com/5wpo1gpVzF
This sentiment was echoed at NEI’s second Nuclear Financing Summit in New York last week, which brought together customers, investors, technology providers, and Wall Street analysts. A recurring statement throughout the event was, “It’s a matter of when and not if.”
And a lot of that optimism is thanks to the tremendous customer interest emerging for nuclear energy.
Head to our Customers page if you want to meet more buyers who are looking for nuclear energy.
