IS THE USA HEADED FOR A GOLDEN AGE UNDER TRUMP?

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Trump started bringing production back to the USA during his first term. It has only accelerated in large part due to AI and Robotics and Trump’s efforts to make the USA energy independent by opening up fracking. Biden’s term has not helped but Trump will quickly resolve the energy supply problem.

The demands for new energy production are driven primarily by two massive trends that will certainly accelerate in the next four years.

There is a need for new AI factories – massive data centers – some of which will be on a gigawatt scale. It’s hard to imagine a data center facility that requires that much power, but that’s what is required to build artificial general intelligence (AGI), and it will be required to run thousands of AI applications.  The capital expenditures for AI for Amazon, Microsoft, Alphabet, Oracle, Meta, and Apple for 2025 will be around $200 billion. That’s just six companies in one year.

This is a multitrillion-dollar trend that will unfold over the next decade. It’s unstoppable. And it needs gigawatts of electricity to fuel these technological advancements.

The second major trend is something I’ve referred to as The Great Recalibration. It’s a massive reversal of the multi-decade trend to move manufacturing offshore, primarily to Asia. 

Economic policies that began in 2017 were a turning point for bringing manufacturing back onshore. The tide is coming back in and manufacturing in-country has become deeply popular again. And for good reason:

  • It creates jobs and opportunity
  • It improves supply chain security
  • It reduces overall CO₂ emissions by manufacturing close to end markets (i.e. less transportation and logistics are required)

These economic policies take a few years to kick in, and they tend to span administrations. It’s easy to see the impact in the chart below. Total manufacturing construction spending has more than tripled since January 2020.

Source: BlackRock

By May of this year, manufacturing construction spending has increased to around $234 billion annually. This isn’t a trend that will slow down. And the supply chain problems caused by the pandemic policies only accelerated this recalibration.

This recalibration wouldn’t be possible, however, without today’s advanced technology. 

Robotics, artificial intelligence, and process automation are driving manufacturing costs down to levels that are near what can be produced in China, without the supply chain or intellectual property risks.

And of course, all of these new manufacturing plants, whether they be for cars, semiconductors, or bicycles, will require gigawatts of electricity to run. Preferably, carbon emission-free energy.

And that’s why the politics have shifted. Technology can and will save the day. That’s why energy policy and regulations are so critically important. Investment follows when there are reasonable regulations that provide a clear path toward commercialization in a short period. This has long been the issue with nuclear power regulations.

A New Energy Framework

Earlier this year, U.S. Department of Energy (DOE) gave Holtec International approval for a $1.52 billion loan guarantee to bring 800 megawatts of nuclear power back online by restarting the Palisades nuclear power plant in southwest Michigan. At the same time, the Diablo Canyon nuclear power plant in California received $1.1 billion from the program to enable its two nuclear reactors to stay in operation.

Based on the DOE’s estimates of needing an additional 200 gigawatts of new nuclear power in the next 25 years, the U.S. government just announced yesterday a new nuclear energy framework to bring online “200 GW of net new nuclear energy capacity by 2050.”

The high-level goals are:

  • To build new, gigawatt-scale reactors
  • Build small modular reactors (SMRs)
  • Build microreactors
  • Restart reactors that have been shut down
  • Extend and expand existing reactors
  • Improve licensing and permitting
  • Develop nuclear fuel supply chains (that don’t involve Russia)

The shorter-term goals are:

  • Bring online 35 gigawatts (GW) of new nuclear capacity by 2035
  • Ramp up to bringing on line 15 GW of new nuclear capacity by 2040

To put things in perspective, 1 GW of electricity is about half the output of the Hoover Dam. It’s enough to power roughly 750,000-850,000 homes. This new framework has a target of 200 GW, enough to power up to 170,000,000 homes with carbon emission-free electricity. But the increase in nuclear power production isn’t for homes, it’s for the new Data Centres needed for the AI revolution and manufacturing and infrastructure construction

With Vivek Ramaswamy and Elon Musk now officially assigned to head up the Department of Government Efficiency (DOGE), we can expect rapid progress on this front. Both are intelligent, evidence-based, and common-sense thinkers now charged with the mandate to reduce government waste, “slash excess regulations,” and bring an entrepreneurial approach to government.

Having built the most successful clean energy company in history, I know this will be a major focus for Musk. He deeply understands that fueling Tesla electric vehicles with electricity produced from coal, natural gas, and oil makes no sense at all. 

With nuclear power, the dream of carbon emission-free ground transportation is possible.

Better yet, DOGE has already been given a deadline for its mission. The team is to conclude its work no later than July 4, 2026, the 250th anniversary of The Declaration of Independence.

My prediction – DOGE is going to hit the ground running in January and aggressively get things done. We’re in for some remarkable developments. And cheap, limitless, clean energy is the path to abundance.

The Australian Labour Party needs to realise that its current renewable energy policy will not be adequate and cost-effective for industry to be competitive. We need to bring more natural gas online and upgrade and maintain our coal-fired power stations until we can introduce the best nuclear options for each State. High-efficiency low-emissions (HELE) coal-fired power stations are proven to reduce both emissions and fuel costs by maximising the amount of power from the steam produced.

Today, the Albanese government has rebuffed an invitation from allies the United Kingdom and the United States to join a global movement to speed up the spread of civilian nuclear energy plants to cut carbon emissions and provide more secure power to industry.

UK Energy Secretary Ed Miliband and US Deputy Secretary of Energy David Turk agreed to a plan to “help pool together billions of pounds worth of nuclear research and development – including the world’s leading academic institutions and nuclear innovators”.

The decision is an extension of the pro-nuclear agreement signed by 31 nations last year at COP28 to triple nuclear energy capacity globally by 2050 and aims to have new technology available by 2030.

This may be enough to give Dutton and the Liberal Party a chance to win the next election.

GOOGLE TURNS TO NUCLEAR ENERGY

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Alphabet’s Google is plugging into nuclear power for its artificial intelligence (AI) operations. The tech giant inked a deal with Kairos Power to purchase electricity from small modular reactors (SMRs).

  • The plan: Bring the first SMR online by 2030, with more to follow through 2035.
  • The bigger picture: This move highlights the surging energy demands of AI, with U.S. data center power consumption projected to triple between 2023 and 2030.

In a deal that marks the first corporate agreement to deploy multiple small modular reactors (SMRs) in the U.S., Kairos Power, and Google have signed a Master Plant Development Agreement to facilitate the development of a 500-MW fleet of molten salt nuclear reactors by 2035 to power Google’s data centers.

Momentum for a nuclear revival driven by data center power demand is already beginning to crop up. As POWER reported earlier this month, Microsoft and Constellation Energy committed $1.6 billion to restart the Unit 1 reactor of the shuttered Three Mile Island in Pennsylvania by 2028. The facility, known as the Crane Clean Energy Center, could supply Microsoft’s AI-driven data centers for at least 20 years. Amazon Web Services, similarly, last year bought a 960-MW data center campus powered by the 2,500-MW Susquehanna nuclear plant.

Also, the Strategic Capabilities Office of the US Department of Defense (DOD) has selected BWXT Advanced Technologies and X-energy LLC to develop a final design for a prototype mobile microreactor under the Project Pele initiative. The two teams have been selected through a preliminary design competition which began in April 2019. Three companies – BWX Technologies, Westinghouse Government Services, and X-energy – were selected last year to begin preliminary design work for a prototype reactor. One of the remaining two companies may be selected to build and demonstrate a prototype after a final design review early next year, and the completion of an environmental analysis under the US National Environmental Protection Act, DOD said.

Australia has realized the need for nuclear submarines, so we are committed to nuclear energy and need to develop expertise with small nuclear reactors. We have also had a nuclear reactor in Sydney since the 1950s without incident. Hence, it makes good business sense to bring nuclear energy into our energy mix as well.

THE AI-SPARKED NUCLEAR REVIVAL

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The data centers that power AI technologies require such prodigious – and reliable – volumes of electricity, that tech giants like Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) “rediscovered” nuclear power as an ideal energy source.

Microsoft and Constellation Energy, the utility that owns Three Mile Island, announced a new deal on September 20th that will lead to the restart of Unit 1 at the Three Mile Island Nuclear Generating Station. This will be the first time a nuclear reactor in the United States has been brought back online after being shut down. 

The deal is for 20 years and is a power purchase agreement in which Microsoft will buy the power generated by Unit 1 for an estimated $110-$115 per megawatt hour in order to reliably power its Artificial Intelligence (AI) data center demand while meeting the companies clean energy goals. Unit one will reopen as the “Crane Clean Energy Center” by 2028 so long as the Nuclear Regulatory Commission approves the plan.

Amazon Web Services is paying as much as $650 million for a data center campus adjacent to a nuclear power plant in Pennsylvania. The cloud provider reportedly plans to build several data centers there, according to The Information. 

The recent Amazon and Microsoft nuclear deals are not outliers. Earlier this month, Oracle Corp. (ORCL) Chairman and Co-founder Larry Ellison announced that his company had obtained “building permits for three nuclear reactors. These are small modular nuclear reactors to power the data center.

Along with this surprising announcement, Ellison also mentioned that some of the newest data centers under construction will require ten times more power than the typical facilities in operation today. Oracle, he said, is building an 800-megawatt data center that will have “acres of Nvidia GPU clusters” that will be used to train one of the world’s largest AI models.

For perspective, 800 MW is nearly identical to the entire power supply that Microsoft expects the Three Mile Island plant to produce once it reopens. In other words, one modern data center will need the entire output of one nuclear reactor.

In many important respects, nuclear energy has no equal, especially when it comes to powering data centers. Electricity that is intermittent, or susceptible to interruption, is electricity that could cause a big, expensive mess for data centers. Nukes prevent that problem. They can run continuously for long periods of time without needing maintenance or refueling.

Importantly, nukes also require a relatively small footprint, compared to renewable energy sources. Theoretically, a square plot of land, 22 miles long on each side, could accommodate enough nuclear reactors to power the entire United States.

Looks like Dutton may be onto a winner by bringing Nuclear Energy into our Power Mix. Because of the need for lots of land, batteries, digitalisation, and new infrastructure (grid upgrade and expansion) with wind, and solar the renewables option is more expensive and less reliable than Nuclear.

https://www.cnbc.com/video/2024/09/20/constellation-energy-reopens-three-mile-island-nuclear-power-plant-in-agreement-with-microsoft.html