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Powering the Future: Why Data Centres and SMRs Are Crucial in the Age of AI

Why do we need more data centres nowadays?

Data Centres serve as pivotal components of cloud infrastructure. Within these centres, data generated by Internet-connected devices is stored and transferred. With the arrival of generative AI, data centres are much needed for its ability to conduct mass data analysation. In September 2024, the UK government classified data centres as Critical National Infrastructure.


Data centres pose a large need for electricity: they require electricity to power the hundreds (often thousands) of servers that they contain, as well as the air-conditioning systems that are used to keep the servers cool. These buildings have been estimated to consume 200 tera-watt hours (TWh) of electricity each year – more than the national energy consumption of some countries (Jones 2018: 163–164).


How do data centres make big companies pursue green energy transition?

A major reason behind this drive is the coming of artificial intelligence, as this groundbreaking technology took over the world, it also poses an incredible threat to our current energy consumption. To power Generative AI, the demand for energy heavy industries soared, which can be roughly categorised into submarine fibre-optic cables, data centres, and mines of rare materials. A recent article by BBC news illustrates how these investment has significantly increased our energy consumption: Google's greenhouse gas emissions in 2023 were 48% higher than in 2019, according to its latest environmental report, which has been said to be puts it down to the increasing amounts of energy needed by its data centres, exacerbated by the explosive growth of artificial intelligence (AI).


What has the UK government done to make data centres operate easier in the UK?

The Contracts for Difference (CfD) scheme is the UK government's primary mechanism for supporting low-carbon electricity generation.It provides renewable energy developers with price stability through a fixed 'strike price' for the electricity they produce: If market prices fall below this level, the government compensates the difference; if prices exceed it, generators pay back the surplus. This not only ensures price stability for the provider but also protects consumers from paying increased support costs when electricity prices are high.


The Cfd scheme can indirectly benefit large energy consumers(like Data Centres) as it reduces volatility in energy prices. The CfD scheme also encourages investment in renewable energy sources, such as wind and solar, which makes low-carbon power in the UK grid more available, enabling data centres to source clean energy more reliably. This allows companies like Google or Microsoft to achieve their respective net zero goals more easily.


Advanced Nuclear Fund

£210 million government funding was awarded to the Rolls-Royce SMR program in November 2021 as part of the Advanced Nuclear Fund (ANF). This fund was established to support the development of next-generation nuclear technologies, including Small Modular Reactors (SMRs) and Advanced Modular Reactors (AMRs).


What are SMRs?

Small modular reactors (SMRs) are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors. SMRs, which can produce a large amount of low-carbon electricity, are:

  • Small – physically a fraction of the size of a conventional nuclear power reactor.

  • Modular – making it possible for systems and components to be factory-assembled

    and transported as a unit to a location for installation.

  • Reactors – harnessing nuclear fission to generate heat to produce energy.

    The UK government believes that SMRs could play an important role alongside large nuclear power plants as a low-carbon energy source to support a secure, affordable decarbonised energy system. A UK SMR programme can support up to 40,000 jobs at its peak with each SMR capable of powering 450,000 homes.

    https://www.iaea.org/newscenter/news/what-are-small-modular-reactors-smrs


How do SMRs connect with DataCentres?

Small Modular Reactors (SMRs) are emerging as a promising solution to meet the substantial and growing energy demands of data centres, as they offer the following advantages:

  1. Reliable and Consistent Power Supply: Data centres require uninterrupted power to ensure continuous operation. SMRs provide a stable and reliable source of electricity, independent of weather conditions, unlike some renewable energy sources.

  2. Low-Carbon Energy Source: As data centres strive to reduce their carbon footprints, SMRs offer a low-carbon alternative to fossil fuels. SMRs can help data centres achieve sustainability targets and contribute to broader environmental goals.


Examples: Power to purchase nuclear energy from multiple SMRs, aiming to bring the first

Google: In October 2024, Google announced an agreement with Kairos

reactor online by 2030. This initiative supports Google's goal of achieving 24/7

carbon-free energy.


Amazon: Amazon has entered into agreements to develop SMRs to meet the growing electricity demand from its data centers, including a feasibility study for an SMR project in Washington state with X-Energy.


In summary:

Data centres are essential to digital infrastructure, especially with the rise of AI, leading to high energy demands and increased focus on sustainability. The UK government supports data centres by designating them as Critical National Infrastructure and facilitating access to low-carbon energy through the Contracts for Difference (CfD) scheme. CfD stabilises renewable energy prices, indirectly benefiting data centres. Additionally, £210 million in funding for Small Modular Reactors (SMRs) under the Advanced Nuclear Fund supports reliable, low-carbon energy solutions for data centres. Companies like Google and Amazon are exploring SMRs to meet their energy needs sustainably, aligning with their 24/7 carbon-free energy goals.


Author: Abram Huang

 
 
 

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