Nuclear power plants emerge as contender to meet surging energy demand of data centres

New US research outlines how nuclear capacity could underpin round-the-clock electricity needs for a rapidly expanding digital infrastructure.

The accelerating growth of data centres is forcing a reassessment of how to supply reliable, large-scale electricity, and new research suggests nuclear power plants could play a central role in meeting that demand.

A study led by scientists at Argonne National Laboratory, in collaboration with Idaho National Laboratory and Oak Ridge National Laboratory, examines how nuclear energy systems could be integrated with data centres.

The findings, published in a US Department of Energy (DOE) report, point to nuclear generation as a technically viable option for delivering continuous, low-carbon power to an industry facing steep energy requirements.

Data centres driving a new wave of electricity demand

Data centres – the backbone of cloud computing, streaming services and AI workloads – are becoming one of the fastest-growing sources of electricity consumption in the United States.

According to the report, demand from the sector could reach as high as 85 gigawatts (GW) by the end of the decade.

To put that into context, one gigawatt is roughly enough to power a mid-sized city. The projected increase, estimated at 24-74 GW by 2028, represents a substantial strain on existing energy systems.

At present, most data centres rely on grid electricity supplemented in some cases by on-site natural gas generation.

However, variability in renewable energy and emissions concerns around fossil fuels are pushing operators to explore alternatives capable of delivering consistent output.

Nuclear power plants, which operate continuously and are largely unaffected by weather, are increasingly being considered a potential solution.

Integration models: From grid supply to co-location

The research outlines five distinct approaches for linking nuclear facilities with data centres.

These range from traditional grid-connected arrangements, where nuclear plants feed electricity into the wider network, to more integrated models in which data centres are built adjacent to, or directly connected with, nuclear sites.

Co-location, in particular, is highlighted as offering operational advantages. By situating data centres next to power plants, operators could reduce transmission losses, improve reliability and potentially lower long-term costs.

Other models include dedicated power purchase agreements with existing nuclear fleets and hybrid configurations that combine grid and direct supply mechanisms.

Scaling nuclear capacity to match demand

Meeting projected demand would require a significant expansion of nuclear capacity. The study estimates that between 27 and 85 GW of installed nuclear generation could be needed to support the anticipated growth in data centres.

In the near term, researchers suggest that 20 to 28 GW could realistically be allocated to data centres by the early 2030s through a combination of strategies. These include restarting recently retired reactors, extending the life of existing plants and constructing new facilities.

Advanced nuclear technologies are also part of the equation. Small modular reactors (SMRs), which are smaller and designed for faster deployment than conventional plants, are identified as particularly relevant for data centre applications due to their scalability and lower upfront costs.

Site selection and infrastructure requirements

The feasibility of pairing nuclear power plants with data centres depends heavily on location. Suitable sites must meet criteria common to both types of infrastructure, such as stable geology, adequate land and access to water for cooling.

Additional requirements include proximity to high-capacity grid connections, fibre-optic networks and a skilled workforce. The study finds that, in principle, viable locations exist across all US states, including sites associated with existing or retired power plants.

Repurposing infrastructure, such as former coal plant sites, could offer economic and logistical advantages, reducing construction costs and timelines.

Economic impact and job creation

Beyond energy supply, the co-location of nuclear facilities and data centres could have notable economic implications. Both sectors are capital-intensive and generate substantial employment and tax revenue.

The report estimates that a 1 GW data centre linked to a nuclear power plant could support approximately 1,700 direct operational jobs. Additional employment effects could extend to more than 7,000 jobs in urban areas and over 3,000 in rural regions.

Such developments could be particularly significant for communities transitioning away from fossil fuel industries, where existing infrastructure and workforce skills may be repurposed.

Challenges: Cost, regulation and timelines

Despite the potential benefits, the report identifies several barriers to widespread adoption. Nuclear projects are typically associated with high upfront capital costs and long construction timelines, both of which could conflict with the rapid deployment schedules of data centres.

Regulatory complexity is another factor, particularly in licensing new reactors or restarting decommissioned ones. Water availability for cooling and local siting constraints also present practical challenges.

However, the researchers argue that these issues are not insurmountable. Strategies such as modernising regulatory frameworks, leveraging existing infrastructure and deploying SMRs could help mitigate some of the constraints.

Policy support and future development

The DOE is already taking steps to explore integrated energy and data centre projects. Federal land has been made available for potential developments, with proposals under consideration at several sites, including Idaho National Laboratory, Oak Ridge Reservation, the Paducah site in Kentucky and the Savannah River Site in South Carolina.

The study’s authors emphasise that coordination between the government, the technology sector and the nuclear industry will be essential to move from concept to implementation.

Further research is planned to assess fuel supply requirements, economic feasibility and site-specific case studies. The broader aim is to establish a scalable framework that enables nuclear power plants to support the continued expansion of data centres while maintaining energy reliability and reducing emissions.

As demand for digital infrastructure accelerates, the question is no longer whether new energy sources are needed, but which ones can scale quickly enough to keep pace.