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If you google SMR (small modular nuclear reactor), you may get over 100 hits. I did. The links are to enthusiastic reports from various sources about the future of SMR generated electricity to meet growing demand from data centers. Amazon is building a data center near Canton and plans another near Ridgeland. Each one represents about a $5 billion investment and requires about 500 MW of generating capacity. They will create thousands of construction jobs and several hundred permanent jobs.
The Governor and the Legislature lured Amazon to Mississippi with a secret package of financial incentives and regulatory exemptions for Entergy’s regulated monopoly which will supply electricity to the data centers. The ripple effects of the investments and temporary and permanent jobs will be good for Mississippi. The Governor and the Legislators are basking in their glow. Kind of like the ole: “What’s Good for General Motors is good for America.” Likely true. Kudos to all responsible. What’s not to like? Unknowns? Unexpected problems? Unexpected opportunities?
What about the effects of secret regulatory exemptions? They may compromise Public Service Commission (PSC) oversight of Entergy’s investments for the data centers which are also for other customers. Entergy’s investors make money on its investments (guaranteed 10%+ return). So there’s a temptation to pad costs.
The PSC helps Entergy resist temptation. Regulatory exceptions that allow no bid contracts to speed construction for Amazon’s benefit could also lead to padded costs. Padded costs could lead to higher rates for other customers – especially if Amazon’s rate is guaranteed and off limits to the PSC. And if the PSC can’t apply its usual prudence test to protect other customers from padded costs. Our residential rates bear watching. They have gone up in other states with a lot of data centers.
So what does any of this have to do with small modular nuclear reactors? Well there are lots of data centers pending. Microsoft recently announced three new ones. There’s not enough spare electricity capacity to power them. What about all the pending windmill and solar projects and green incentives for more? Sorry, wind and solar power are intermittent (not always on). Wind doesn’t blow and sun doesn’t shine all the time. They are unreliable. Data centers require reliable (always on) power. Other customers like always on power too.
Aren’t combined cycle natural gas plants (CCNG plants) always on and suitable for data centers? Yes, if there are multiple plants for backup and redundancy for scheduled and unscheduled outages. Entergy has multiple plants and is building another one. It is also connected to a grid with more plants. So its CCNG plants are a reliable go to source for data center electricity. The plants are also cheaper than other sources. But Amazon and Microsoft and others who build data centers are also climate change virtue signalers.
Climate alarmists say natural gas plants are not virtuous because they emit carbon dioxide combustion byproducts. They say CO2 causes climate change. It’s sinful. To atone
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