Nuclear Power for Data Centers: What the Hyperscaler Procurement Rush Means for Developers
Hyperscalers are securing nuclear power agreements at a pace that is reshaping the energy and real estate landscape for data center developers.
The Three Mile Island restart is the clearest signal. Constellation Energy signed a 20-year power purchase agreement with Microsoft in September 2023 to reactivate Unit 1 of the Pennsylvania nuclear facility. The plant came back online in late 2024, delivering 835MW of carbon-free baseload power to Microsoft's regional operations. It was the largest nuclear energy deal of its kind.
Google followed with a different bet: small modular reactors. In December 2023, Google signed an agreement with Kairos Power to purchase electricity from multiple SMR units expected to come online between 2030 and 2035. Amazon secured a campus adjacent to the Susquehanna nuclear facility in Pennsylvania and inked a deal with X-energy for SMR deployment. Meta has publicly disclosed nuclear procurement plans.
The capital flows tell the story. According to BloombergNEF, power purchase agreements for nuclear energy in the US totaled more than 16GW of contracted capacity by end of 2024, the majority tied to data center demand. SMR developers including NuScale, X-energy, Kairos, and TerraPower have collectively raised more than billion in the past 18 months.
Why Nuclear Works for Data Centers
Data centers run 24/7. They cannot absorb the intermittency of wind and solar without battery backup that scales poorly above a few hundred megawatts. Nuclear delivers what data center operators actually need: dispatchable, carbon-free baseload power with capacity factors above 90%.
For hyperscalers making net-zero commitments, nuclear closes the gap that renewables alone cannot. A 500MW campus running at full utilization needs a matching generation source that delivers on demand. The math on battery storage is unworkable at that scale today. Nuclear -- existing plant restarts or, in the medium term, SMRs -- is the only dispatchable clean option with the scale characteristics hyperscalers require.
Google's 2024 environmental report acknowledged its scope 2 emissions increased year-over-year due to data center energy consumption, despite aggressive renewable procurement. Nuclear is how that gap closes.
What This Means for Site Proximity and Land Value
Nuclear-adjacent sites are pricing accordingly. Within a 20-mile radius of operating or restarting nuclear plants, data center land has attracted meaningfully higher valuations due to grid interconnection advantages and reduced transmission loss. Developers who secured optioned sites near Constellation's fleet -- or near the Clinton, Dresden, and Quad Cities plants -- are fielding inbound interest from hyperscalers who want power certainty baked into the site.
The interconnection advantage is practical. Sites within an existing substation's service territory, directly connected to nuclear output on the same transmission path, can avoid years of interconnection queue delay. That shaves 18-36 months off typical timelines in congested markets like Northern Virginia and Phoenix, where queue waits now routinely exceed three years.
This is creating a two-tier land market. Generic grid-served sites compete on cost. Nuclear-adjacent sites with clear interconnection paths compete on certainty, and certainty commands a premium.
SMR Timeline Risk for Developer Underwriting
For developers evaluating greenfield sites near planned SMR deployments, timeline risk is significant. NuScale's Carbon Free Power Project collapsed in late 2023 after cost escalation made it unviable. TerraPower's Natrium reactor demonstration in Wyoming is targeting 2028 but has experienced regulatory and supply chain delays. Kairos Power's Hermes test reactor in Tennessee is the nearest to completion among commercial SMR candidates, targeting late 2027.
Underwriting a data center around SMR power delivery before 2030 carries real schedule risk. Developers positioning for nuclear-adjacent sites should model scenarios where the SMR delays 3-5 years and ask what the campus economics look like running on conventional grid power in the interim. Sites that pencil only if nuclear comes online on schedule are not investment-grade bets in 2026.
The Development Opportunity: Power Certainty as Competitive Moat
The deeper implication for institutional developers is this: power certainty is now the primary differentiator in data center site selection, and nuclear-backed sites represent a scarce form of that certainty.
A developer who can credibly deliver 500MW from a nuclear-backed interconnection, on a compressed timeline, is operating in a different market than one competing on generic grid-served sites. Hyperscalers will pay for certainty. The lease rate premium for power-certain sites runs 15-25% above comparable grid-constrained alternatives based on current market transactions.
AI can compress the research layer -- utilities' integrated resource plans, interconnection queue positions, transmission path analysis, nuclear plant operating licenses and capacity factors -- but the relationship-intensive elements of nuclear power contracting remain human work. Utility relationships, FERC interconnection strategy, and PPA negotiation require senior advisors, not automation.
For development teams building out a data center land pipeline, nuclear-adjacent site screening should now be an explicit criteria layer alongside the standard power, fiber, zoning, and water filters. The window to accumulate advantaged sites near operating nuclear capacity is closing.