Reactivation of Three Mile Island Nuclear Plant: How AI-Induced Power Crisis is Transforming U.S. Energy Policy
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The AI revolution is completely transforming U.S. energy policy. News has emerged that Pennsylvania’s Three Mile Island nuclear plant, a symbol of the U.S. anti-nuclear policy since the 1979 nuclear accident, is set to restart in 2027. This has been made possible by Microsoft’s commitment to purchasing power for 20 years. This is not merely a story about the reactivation of a nuclear plant but a symbolic event showing how the power crisis in the AI era is fundamentally altering national energy policy.
The U.S. Department of Energy’s approval of a $1 billion (approximately 1.47 trillion won) federal loan to Constellation Energy on November 18 can be understood in this context. Energy Secretary Chris Wright’s statement that “America needs massive power to win the AI race” and that “a new nuclear renaissance plan is underway” starkly illustrates the era’s changes. Personally, I am surprised at how quickly this policy shift is occurring.
The November 18 report from the North American Electric Reliability Corporation (NERC) reveals the severity of the situation. The maximum power demand, which had been stagnant for years, has recently increased by 20GW (2.5%), while new power supply is less than 10GW. This is a typical situation where supply cannot keep up with demand. The problem is that this is not a temporary phenomenon. Global consulting group Deloitte forecasts that the power demand of U.S. data centers will increase more than fivefold from 33GW in 2024 to a maximum of 176GW by 2035.
The seriousness of the situation can be felt by looking at the electricity rate increases in regions concentrated with data centers. Virginia, home to 666 data centers, saw its electricity rates increase by 13% as of August this year compared to the same period last year, Illinois by 15.8%, and Ohio by 12%. This is 2-3 times the national annual electricity rate increase of 5.1%. If this regional disparity continues to widen, it will inevitably affect the competition to attract data centers.
U.S. to Construct 10 Nuclear Plants with Japanese Investment
The U.S. government’s response is quite proactive. The plan is to start constructing 10 large nuclear plants by 2030, which is part of a long-term strategy to expand nuclear power capacity from the current 100GW to 400GW by 2050. This is also a core element of the “Rebuilding the Nuclear Industry Base” executive order announced by President Donald Trump in May. However, constructing a large nuclear plant takes at least 4-6 years from site selection to permitting, financing, and supply chain establishment, so starting 10 plants by 2030 is indeed a challenging goal.
Funding is a key issue. The U.S. Department of Energy estimates that constructing 10 nuclear plants will cost at least $75 billion (approximately 109.92 trillion won), an astronomical figure. Interestingly, Japan plays a role here. At the Tennessee Energy Conference on November 19, Carl Coe, Senior Advisor to the Department of Energy, mentioned Japan’s $550 billion investment commitment announced in October, indicating that these funds could be used for the U.S.’s new nuclear projects.
The “Joint Fact Sheet on U.S.-Japan Investment” released by the White House outlines specific plans. It states that $332 billion (approximately 486.74 trillion won) will be invested in constructing large nuclear plants, small modular reactors (SMRs), and other power systems such as power plants, substations, and transmission networks. South Korea also promised to invest part of the $200 billion from the $350 billion U.S. investment package agreed upon during tariff negotiations in the nuclear and energy sectors. It seems that the U.S. is essentially expanding its nuclear capacity with funds from allied countries.
Constellation Energy’s plan to restart the Three Mile Island nuclear plant provides a more concrete understanding of these changes. Reactivating Unit 1 is expected to produce enough power for 800,000 households, which Microsoft has agreed to purchase for 20 years. This structure ensures stable revenue through a long-term power purchase agreement (PPA). From Microsoft’s perspective, it can stably secure the massive power needed for AI model training and inference, making it a win-win situation.
A New Partnership Between Big Tech and Nuclear Power
In fact, the partnership between Microsoft and Constellation Energy demonstrates a new approach by big tech companies to simultaneously address carbon neutrality goals and massive power demand. Renewable energies like solar and wind have limitations as power sources for 24-hour operational data centers due to intermittency issues. Nuclear power has the advantage of providing stable baseload power without carbon emissions. Personally, I think this combination will become a major trend in the future energy market.
The U.S. government is also proceeding with procedures to restart Iowa’s Duane Arnold nuclear plant, which ceased operations in 2020, and Michigan’s Palisades nuclear plant, which was shut down in 2022, aiming for reactivation next year. Reactivating existing nuclear plants is relatively faster and more cost-effective than new construction. However, it is noteworthy that most of these nuclear plants were closed due to deteriorating economic viability. The AI boom has completely changed the economic calculations of the power market.
The National Electrical Manufacturers Association (NEMA) predicts that U.S. power demand will increase by 50% by 2050 due to data center expansion, which is a tremendous change. Considering that only three large nuclear plants have been added in the U.S. since the 1990s, the expansion of power infrastructure over the next 30 years will be a challenge of an entirely different dimension than in the past. Deloitte’s emphasis on the need for active nuclear plant construction to meet this demand can be understood in this context.
From a Korean perspective, these changes have significant implications for us as well. Domestic AI companies and data center operators are likely to face power supply issues. Especially in Korea, where the power self-sufficiency rate is low and there is social controversy surrounding nuclear policy, the situation is even more complex. While domestic nuclear companies like Doosan Enerbility may benefit from the U.S.’s nuclear expansion policy, expanding domestic power infrastructure will also become an urgent task.
Ultimately, the power crisis in the AI era is not merely a supply shortage issue but a national issue directly linked to energy security. The U.S.’s symbolic decision to restart the Three Mile Island nuclear plant reflects this awareness. It will be fascinating to watch how global energy policies change in the coming years and how this impacts the competitiveness of the AI industry. Personally, I believe these changes will eventually serve as a catalyst for accelerating innovation in energy technology.
This article was written after reading an article from Weekly Dong-A and adding personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content is the author’s personal opinion. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.
