By Timothy Gardner, Valerie Volcovici and Leah Douglas
WASHINGTON (Reuters) -President Joe Biden's administration is asking big technology companies to invest in new climate-friendly power generation to cover their surging demand, U.S. Energy Secretary Jennifer Granholm told Reuters.
The talks come as a surprising surge in electricity demand has been driven by the adoption of technologies like generative artificial intelligence that require power-hungry data centers. This development could complicate Biden's target of decarbonizing the power sector by 2035 to fight climate change.
“We've been talking with data companies. The large ones have commitments to net-zero and would like to see clean baseload power,” Granholm said in an interview with Reuters.
She said the administration had discussed the possibility that companies could band together to make use of small modular reactors for nuclear energy, and could simultaneously place orders to reduce costs.
“If the tech companies are coming in and are going to pull clean power from the grid, they should bring the power with them,” she said.
"And so a lot of that conversation is happening right now among tech companies and utilities, tech companies and nuclear companies."
She did not name any of the companies involved.
Data centers could use up to 9% of total electricity generated in the U.S. by the end of the decade, more than doubling their current consumption, the Electric Power Research Institute said in a report last week.
NuScale, the only small modular reactor company with a license to build from U.S. regulators, had to cancel its only project last year at the Energy Department's Idaho National Laboratory.
Granholm said the NuScale did not have sufficient agreements to buy power from the project. "That's a lesson: If you're going to have new nuclear you have to have clear offtake of the power," Granholm said.
The White House last week announced new measures to spur development of new U.S. nuclear power plants, a large potential source of carbon-free electricity the government says is needed to combat climate change. But no new U.S. nuclear plants are currently being built.
The youngest U.S. nuclear power reactors, at the Vogtle plant in Georgia, were years behind schedule and billions over budget when they entered commercial operation in 2023 and 2024.
Granholm said tech companies were also looking into other clean energy technologies, including geothermal.