Nuclear power is reborn in the United States. Constellation Energy and Microsoft have just agreed to restart a nuclear power unit at the Three Mile Island complex in Pennsylvania.
The proposed transaction will jumpstart the long-promised renaissance of the nuclear power industry in the U.S. The deal is great news for the economy and for the country. Nuclear power is clean. It is green. Most importantly, nuclear power is the world’s most efficient 24/7 power source. The federal government says nuclear power has a 92% efficiency rating. The comparable figure for wind is 35%, and solar power is even less efficient.
The U.S. is already a global low-cost producer of energy. The combination of almost unlimited supplies of natural gas, decades of oil resources and now nuclear energy ensures that the U.S. remains a global manufacturing powerhouse. China may have cheap, dirty coal but America has almost limitless supplies of largely clean energy. The people of America will breathe clean air and enjoy the economic benefits of the world’s dominant economy.
As a nation with a strong comparative advantage in energy, international businesses will continue to invest in America, secure in the knowledge that their businesses will run on cheap energy. The countries of Europe have gone green. Their industries are in recession, in large part because energy is too expensive. Consequently, European businesses are coming to America, where energy is inexpensive, and the free market is largely embraced.
Microsoft and Constellation Energy will restart a nuclear power unit at Three Mile Island because Artificial Intelligence, where Microsoft is a leader, requires vast amounts of energy. AI relies on data centers, football-field-size facilities, where AI computer systems run data computations at near light speed. Accelerated computing runs hot; the cooling process is also hungry for energy.
The triple play of gas, oil, and nuclear power means that the U.S. will be the world leader in AI, which is already beginning to accelerate long-run economic productivity growth. The U.S. will remain a preferred destination for high-value-added manufacturing processes. Americans can be confident that strong economic growth will continue and that standards of living for all Americans will continue to improve. A rising economic tide does lift all households.
Admittedly, key permits for the restart of the nuclear power plant have not been secured. But representatives of the federal government including Energy Secretary Jennifer Granholm have assured the media and the public that the necessary permits will be granted.
Granholm has also said that there are several other currently inactive power plants that could be restarted. Companies such as Alphabet-Google, Meta and Amazon are committed to reducing their carbon footprints. These companies are also leaders in AI. It is logical to predict that they too will sign contracts with nuclear power companies for the energy necessary to power their data centers.
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Moreover, Granholm also said this week that the Biden administration wants to push forward with small modular nuclear power projects. The technology for modular nuclear power already exists. The British company Rolls Royce just signed a deal with the Czech Republic to construct a modular power plant. Importantly, support for nuclear power extends across U.S. political divides. Former President Donald Trump is a strong supporter of nuclear power.
It is clear that the nuclear power renaissance has arrived. Cheap abundant energy, including nuclear power, will ensure the economic future of our country.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be reached at [email protected]