It’s been more than a decade since the US last broke ground on a large-scale nuclear power plant that came online. Xcel Chief Executive Officer Bob Frenzel is raising the idea that it’s time to start again.
Many in the utility industry are trying to puzzle out how to meet the expected boom in power demand that’s forecast from the data centers that run artificial intelligence.
“I’m a unabashed fan of nuclear,” said Frenzel, a former nuclear engineering officer in the US Navy who served aboard the USS Dwight D. Eisenhower, a nuclear-powered aircraft carrier. He spoke in an interview at Bloomberg News offices in New York.
“Nuclear is safe, it’s carbon free, it’s dispatchable, it’s reliable,” he said.
US demand for power is set for a boom driven by AI, new factories and the overall electrification of the economy. That’s created new life for old nuclear plants, with a deal to reopen Three Mile Island as the most high-profile example. While power companies have expressed interest or announced pilot projects for small modular reactors, support for opening new large-scale nuclear plants is much rarer — but that could start to change, Frenzel said.
Data Center Needs
“Because of these large loads the data centers want, you will see people contemplate whether they build a large-scale nuclear reactor in this country,” Frenzel said in a separate interview on Bloomberg Television.
Those types of projects, which are notoriously expensive, will require partnerships across companies including power providers and customers along with government support, Frenzel said. Xcel isn’t currently actively considering building a new large reactor in its service territory, he added.
Wisconsin and North Dakota have both advanced legislation that would allow for the consideration of potential sites for nuclear power facilities, he said.
Most of the energy industry wrote new nuclear plants off for dead after Southern Company, the last utility to build a new plant, went $16 billion over budget and seven years behind schedule building its Vogtle project.
“We have massive load growth, we have single assets that are talking about a thousand megawatts — Well, that’s one AP1000 unit,” he said, referring to the energy demand from a single data center and the model of a specific reactor. “I think there’s a possibility that people look at the load growth and say, ‘I need to meet that with something that’s bigger than a 100 megawatt machine. I need a 1,000 megawatt machine.’”
Xcel shares are up more than 5% this year and traded little changed on Friday.
Xcel sells power to more than 3.7 million customers in states including Minnesota, Colorado and Texas. The company has faced challenges from wildfires in its territory and acknowledges that its equipment was likely involved in igniting the worst wildfire in Texas history last year. Xcel also faces legal claims that its equipment helped ignite the massive Marshall fire in Colorado in 2021 and analysts have expressed concern over the financial liabilities that could arise from the jury trial slated to start later this year.
“We’re prepared to go to trial in September because we don’t believe that our equipment caused” an ignition involved in the Colorado blaze, Frenzel said in the interview.
Source: Bloomberg
