Nuclear Energy Coming to Data Centers: Equinix Taps into Rolls-Royce-powered SMRs

Data center infrastructure interconnection and colocation leader Equinix is going big on nuclear. Equinix recently announced having signed a Letter of Intent (LOI) with Amsterdam-based nuclear project developer ULC-Energy for a Power Purchase Agreement (PPA) of up to 250 Megawatt electrical (Mwe) to power data centers in the Netherlands. ULC-Energy chose Rolls-Royce as its preferred Small Modular Reactor (SMR) technology solution provider in 2022. Rolls-Royce SMR is developing a 470 MWe light water SMR. For Rolls-Royce Power Systems, data centers are fast becoming a key market with 2024 sales of power generation products growing almost 50%. Rolls-Royce showcased its SMR technology at Hannover Messe earlier this year.

Other Equinix nuclear deals and partnerships include:

• Stellaria: Pre-order power agreement to secure 500 Megawatts (MW) of electricity from its Stellarium liquid core reactors for data centers across Europe; France-based Stellaria, incubated by Schneider Electric and the CEA (French Atomic Energy Agency), is developing the first molten salt breed & burn reactor, with 100% of its liquid fissile fuel bred inside the reactor without refueling. A functional prototype is expected by 2029 with commercial deployment in 2035.
• Radiant: Preorder agreement for the purchase of 20 1-MW Radiant Kaleidos microreactors. California-based startup Radiant Nuclear Energy develops mass-produced portable nuclear microreactors, designed to provide a clean and long-lasting energy source that can be transported wherever power is needed and installed within days. The first reactor tests are planned in 2026 with customer deployments starting in 2028.
• Oklo: In 2024, Equinix signed an agreement to procure 500 MW of energy from California-based Oklo's Aurora powerhouse fast fission reactors aimed at purchasing power via future PPAs. This signaled the first agreement between a data center colocation operator and an SMR company. Oklo's fast reactors incorporate inherent safety features and can be fueled by nuclear waste, operating for 10 years or longer before refueling.

These partnerships are part of Equinix's wider power diversification strategy to anticipate future power constraints by combining new arrangements with utilities and on-site power generation technologies ranging from nuclear energy to solar (Spain) and fuel cells (solid-oxide fuel cells from Bloom Energy to be deployed in the United States).

Others are following suit. In 2024, Microsoft entered into a 20-year agreement with Constellation Energy to restart the decommissioned Three Mile Island nuclear power plant's Unit 1 in Pennsylvania. Expected to be back online by 2028, Microsoft aims to buy all the power from the plant (to be renamed the Crane Clean Energy Center) via the region's power grid to fuel its Artificial Intelligence (AI) data centers.

Ramping up consumer and industrial electrification and the fast deployment of renewables are globally putting tremendous stress on aging energy grids that are in urgent need of massive upgrades in terms of both capacity extensions and the deployment and integration of digital technologies to enable real-time management to make grids more flexible and resilient. At the same time, according to the International Energy Agency (IEA), electricity demand from data centers globally is expected to more than double from 415 Terawatt-Hours (TWh) in 2024 to around 945 TWh by 2030. Last year's case of Google being denied a permit for its new planned data center in Dublin due to a lack of grid capacity definitely set off the alarm bells across the entire data center industry. It even prompted NVIDIA Chief Executive Officer (CEO) Jensen to state that energy is the single biggest hurdle toward data center, aka AI Factory, expansion at the GTC Paris event last June, dwarfing any other challenges related to funding, site acquisition, and cooling requirements.

Consequently, it does not come as a surprise that key stakeholders across the data center ecosystem and value chain are starting to investigate how to take control of their own energy needs and destiny. Circumventing the grid transmission and distribution bottlenecks by generating very large amounts of energy on-site seems like a plausible alternative. However, solar and wind are not quite adequate to power the largest data centers due to real estate footprint requirements. For future Gigawatt (GW) data centers, nuclear is the prime candidate to offer ultra-high energy generation densities.

To put things in perspective, future data centers will match some of the largest industrial manufacturing operations in terms of scale, footprint, investments, resource requirements, and importance for the overall economy, as AI is increasingly enabling growth and productivity gains. Hence, the move to extraordinary measures such as the transition to the on-site deployment of nuclear to guarantee future energy supply seems justified. Additionally, nuclear power provides a shortcut to clean, emissions-free, and net-zero data center operations.  

Achieving independence from a public grid ecosystem that is stifled by rigid practices, very high levels of limiting regulation, and lagging digitalization certainly seems like an attractive option, and even an imperative for an exploding AI data center space that is operating at hugely different speeds, levels of innovation, and overall ambition.  

However promising nuclear energy in the form of on-site SMRs might look, it will take many years until commercial launches and wider availability become a reality, judging from some of the timelines mentioned above. Consequently, the data center industry will have to adopt a balanced energy acquisition approach that includes continuing  investing in other on-site renewables such as solar, and working with and investing in legacy energy grids, which will also adopt SMRs. Equinix does exactly this: partnering with utility partners to fund and support grid transmission network upgrades, including digital substations and emergency backup solutions. ABI Research previously estimated that aggregated global investments in public grid digitalization and transmission network capacity expansion will need to reach over US$4 trillion by 2030 to avoid capacity constraints and slowing down the energy transition. (See ABI Research’s report, Will Public Grids Become the Bottleneck for the Adoption of Industrial Microgrids, Electrification, and Reaching Net-Zero Targets? (AN-6033).)

Finally, it will also be critical that granular nuclear power is deployed responsibly and sustainably. Next-generation practices such as recycling spent fuel, burning recycled waste, and advanced safety mechanisms are starting to be adopted and developed by some of the nuclear startups mentioned above. There is no room for failure here, as energy salvation could rapidly turn into an energy disaster.