Chapter 5

Chapter 5: Energy Sourcing

Aligning Data Center Growth with Clean, Reliable, and Scalable Power

Introduction

Energy sourcing is now one of the most critical—and complex—dimensions of data center planning. AI workloads require unprecedented power densities and round-the-clock availability, forcing operators to rethink where and how they access electricity.

This chapter explores global strategies for aligning data center energy supply with long-term sustainability and operational reliability. It also provides a deep dive into the growing role of nuclear power, including small modular reactors (SMRs) and fusion energy initiatives, as a means of powering next-generation hyperscale infrastructure.

5.1 Overview: The Geography of Power

Where a data center is located directly impacts its energy sourcing profile. Each siting strategy involves trade-offs:

• Urban proximity offers access to robust grids and end users but is often limited by high demand, congestion, and lack of clean energy access.

• Fossil-heavy regions may offer stable power and low costs but carry a high carbon footprint.

• Renewable-rich locations provide low-carbon energy but may face intermittency issues and high transmission costs.

Operators are increasingly prioritizing:

• Cooler climates (to reduce cooling needs)

• On-site or nearby clean power generation

• Grid interconnection feasibility

• Access to long-term energy contracts

Examples:

• Phoenix, Arizona (a fast-growing data center hub) now hosts over 80 facilities, many supported by solar energy.

• Guizhou, China, with strong hydroelectric capacity and moderate temperatures, is emerging as a green data center region backed by Apple and Foxconn.
  
  

5.2 The Case for Nuclear Energy

Nuclear energy offers consistent, zero-carbon power that can operate 24/7—an essential feature for AI-scale compute.

Nuclear Options

• Fission (in use today): Uses uranium to generate electricity. Stable and proven, but produces long-lived radioactive waste.

• Fusion (experimental): Fuses atoms together. Generates minimal waste but is still in R&D.

Why Nuclear?

• Unlike wind and solar, nuclear power is not intermittent.

• Can be co-located with data centers to reduce transmission losses.

• Offers a clean alternative to fossil fuels for baseload demand.

Current Trends

• Google signed the world’s first corporate agreement for power from small modular reactors (SMRs), aiming for up to 500 MW.

• Microsoft partnered with Constellation Energy to reopen a nuclear plant at Three Mile Island (835 MW) and invested in fusion with Helion Energy.

• Amazon announced plans to support nuclear infrastructure in Virginia and Washington state, with a projected 5,000 MW nuclear capacity by 2035.

• OpenAI is exploring direct nuclear energy procurement from fusion startups.
  
  

5.2.1 Technological Developments

New reactor designs promise safer, more scalable nuclear deployment. These include:

• Small Modular Reactors (SMRs): Factory-built and deployable closer to demand centers.

• Molten Salt and Fast Reactors: Safer and more efficient than conventional designs.

• Fusion Reactors: Aim to achieve commercial viability later this decade.

However, barriers remain:

• High up-front costs

• Long permitting timelines (often requiring $1B+ to gain approval in the U.S.)

• Limited transmission infrastructure

• Uranium import dependence (99% of U.S. uranium is imported)

Standardization and public-private partnerships—like those seen in France—could reduce costs and deployment friction.

5.2.2 Growth and Policy Momentum

Governments and industry are converging around a shared vision for expanded nuclear power:

• In 2025, the U.S. issued an Executive Order on “National Energy Dominance,” streamlining approvals for commercial nuclear energy.

• The Department of Energy has launched voucher programs to help startups like Oklo and TerraPower deploy fast reactors.

• At COP28 and CERAWeek, 14 major tech companies, including Meta, Amazon, and Google, joined a pledge to triple nuclear capacity by 2050.

Global comparisons show divergent approaches:

• France generates over 65% of its electricity from nuclear.

• China is aggressively building capacity, with over 30 new plants under construction.

• The U.S. is focusing on private-sector innovation and SMR deployment.

• South Korea and Japan are ramping up new projects following previous nuclear skepticism.

Summary

As AI drives explosive growth in compute demand, the energy strategies behind data centers are becoming more critical, political, and climate-relevant.

Renewables remain essential—but without reliable baseload power, they are not enough. Nuclear energy is poised to play a central role in the next generation of digital infrastructure, offering scalable, round-the-clock, zero-emission power to match the scale of AI itself.