Xcel CEO Says AI Power Needs Raise Prospect of New Large Nuclear

Bob Frenzel Photographer: Kent Nishimura/Bloomberg Photo by Kent Nishimura /Bloomberg

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(Bloomberg) — It’s been more than a decade since the US last broke ground on a large-scale nuclear power plant that came online. Xcel Chief Executive Officer Bob Frenzel is raising the idea that it’s time to start again. 

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Many in the utility industry are trying to puzzle out how to meet the expected boom in power demand that’s forecast from the data centers that run artificial intelligence.

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“I’m a unabashed fan of nuclear,” said Frenzel, a former nuclear engineering officer in the US Navy who served aboard the USS Dwight D. Eisenhower, a nuclear-powered aircraft carrier. He spoke in an interview at Bloomberg News offices in New York. 

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“Nuclear is safe, it’s carbon free, it’s dispatchable, it’s reliable,” he said. 

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US demand for power is set for a boom driven by AI, new factories and the overall electrification of the economy. That’s created new life for old nuclear plants, with a deal to reopen Three Mile Island as the most high-profile example. While power companies have expressed interest or announced pilot projects for small modular reactors, support for opening new large-scale nuclear plants is much rarer — but that could start to change, Frenzel said.

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Data Center Needs

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“Because of these large loads the data centers want, you will see people contemplate whether they build a large-scale nuclear reactor in this country,” Frenzel said in a separate interview on Bloomberg Television. 

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Those types of projects, which are notoriously expensive, will require partnerships across companies including power providers and customers along with government support, Frenzel said. Xcel isn’t currently actively considering building a new large reactor in its service territory, he added. 

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Wisconsin and North Dakota have both advanced legislation that would allow for the consideration of potential sites for nuclear power facilities, he said.

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Most of the energy industry wrote new nuclear plants off for dead after Southern Company, the last utility to build a new plant, went $16 billion over budget and seven years behind schedule building its Vogtle project. 

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“We have massive load growth, we have single assets that are talking about a thousand megawatts — Well, that’s one AP1000 unit,” he said, referring to the energy demand from a single data center and the model of a specific reactor. “I think there’s a possibility that people look at the load growth and say, ‘I need to meet that with something that’s bigger than a 100 megawatt machine. I need a 1,000 megawatt machine.’”

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