Google backs new nuclear plants to power AI

Under the deal’s terms, Google committed to buying power generated by seven reactors to be built by nuclear-energy startup Kairos Power. The agreement targets adding 500 megawatts of nuclear power starting at the end of the decade, the companies said Monday.

The arrangement is the first that would underpin the commercial construction in the U.S. of small modular nuclear reactors. Many say the technology is the future of the domestic nuclear-power industry, potentially enabling faster and less costly construction by building smaller reactors instead of behemoth bespoke plants.

“The end goal here is 24/7, carbon-free energy," said Michael Terrell, senior director for energy and climate at Alphabet’s Google. “We feel like in order to meet goals around round-the-clock clean energy, you’re going to need to have technologies that complement wind and solar and lithium-ion storage."

The context

The nuclear-power industry’s fortunes are increasingly getting hitched to Big Tech. Power demand is rising in parts of the U.S. for the first time in years, much of it driven by the need to build more data centers for AI. That has sent the tech industry on the hunt for massive amounts of energy.

Last month, Constellation Energy and Microsoft struck a deal to restart the undamaged reactor at Pennsylvania’s Three Mile Island, the site of the country’s worst nuclear-power accident. Earlier this year, Amazon purchased a data center at another Pennsylvania nuclear plant.

The 500 megawatts of generation that would be built by Kairos for Google is about enough to power a midsize city—or one AI data-center campus.

The agreement answers questions that have bedeviled smaller-reactor designs: What customer would pay the higher price for a first-of-a-kind project? And who would order enough to get an assembly line started? The concept, which remains to be proven, is that building the same thing over and over in a factory would drive down costs.

The details

Kairos plans to deliver the reactors between around 2030 and 2035. Financial terms weren’t disclosed, but the companies entered into a power-purchase agreement, similar to those used between corporate buyers and wind- and solar-energy developers.

The project site—or whether there could be reactors at multiple locations—hasn’t been determined, the companies said.

Google would have data centers somewhere in the region near the Kairos reactors, but it hasn’t been determined whether they would receive power directly from the nuclear plants or from the grid. Google could count the addition of nuclear power toward meeting its carbon-reduction commitments.

Instead of water, which is used in traditional reactors, the Kairos design uses molten fluoride salt as a coolant. The units for Google will include a single 50-megawatt reactor, with three subsequent power plants that would each have two 75-megawatt reactors, Kairos said. That compares with about 1,000 megawatts at reactors at conventional nuclear-power plants.

Kairos will have to navigate complex approvals through the U.S. Nuclear Regulatory Commission, but already has clearance to build a demonstration reactor in Tennessee, which could start operating in 2027.

Kairos has a manufacturing development facility in Albuquerque, N.M., where it is building test units. They don’t have nuclear-fuel components but are something of a practice run at building and operating full-size plants to test systems, components and the supply chain.

Mike Laufer, chief executive and co-founder at Kairos, said the demonstration project and the Albuquerque plant are helping the company avoid spiraling costs, a pitfall of the conventional nuclear industry.

The big picture

Nearly 20% of U.S. power comes from nuclear plants, but the pipeline of big, new projects has been halted because of high costs and long time lines.

The second of two new reactors at Georgia’s Vogtle nuclear plant was completed this spring. Before that, the most recent nuclear-power reactors in the U.S. were completed in 2016 and 1996 by the Tennessee Valley Authority.

Tech companies such as Google started signing power-purchase agreements with renewables developers in 2010, which helped drive down costs of those technologies. Nuclear-power advocates say a stable customer could drive down costs over time in that industry, too.

In the near term, analysts expect more natural-gas-fired power plants to be added to fuel the country’s appetite for data centers, new manufacturing, heavy industry and transportation.

Write to Jennifer Hiller at jennifer.hiller@wsj.com