Entergy Is Discussing Small Nuclear Reactors With Its Biggest Customers

(Bloomberg) — Utility Entergy Corp. is in talks with some of its biggest customers about deploying small nuclear reactors as electricity demand surges from factories and artificial intelligence data centers, said Chief Executive Officer Drew Marsh.

The utility, which serves a heavily industrialized portion of the Gulf Coast, owns four large-scale nuclear plants and is considering upgrades to them that would, together, generate perhaps another 400 megawatts of electricity, Marsh said. But the cost of developing new nuclear plants is too great for Louisiana-based Entergy to finance on its own.

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“We can’t embark on something that large and risk the whole company’s balance sheet,” he said, in an interview at Bloomberg headquarters in New York.

Entergy’s industrial and technology customers are interested in nuclear power, he said, and the company has discussed with them the possibility of using small modular reactors, which several startups are trying to bring to market. Development could be financed by joint ventures, he said, or could be done in partnership with federal or state governments or even other utilities. Any actual deployment would likely be years away.

US power companies are trying to figure out how to meet the surge in demand from AI, new factories and electric vehicles. They can build natural gas plants or keep old coal and gas plants running longer than previously planned, but both options would make it more difficult for utilities to reach their climate goals. Nuclear power avoids the climate problem, but large plants are expensive and take many years to build. Smaller reactors have not yet been commercially deployed.  

One potential model for an agreement is the recent pact between Amazon.com Inc. and Dominion Energy Inc. to explore developing and financing small reactors in Virginia, the world’s biggest data center hot spot. 

Marsh noted the recently completed Vogtle nuclear project in Georgia was plagued by cost overruns and delays. Vogtle’s final cost came in $16 billion over budget. “If that happened to a company like Entergy Mississippi, the company wouldn’t survive,” he said, referring to an Entergy subsidiary. “We need partners — that’s the bottom line. And we need partners who are willing to shoulder the bulk of the risks.”

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