Could Europe’s data centre boom trigger a nuclear power revival?

Europe's burgeoning data centre industry may pave the way for a resurgence in nuclear power, according to J.P. Morgan analysts. With AI data centres consuming significant amounts of continuous power, nuclear generation could provide a dependable, low-carbon electricity source. By 2030, Europe's data centre electricity consumption could surge from approximately 70 terawatt-hours (TWh) to roughly 115 TWh, based on European Commission forecasts.

This growth, amounting to 89 TWh annually, would see Iberia and the Nordic countries accounting for around 45% of the increase. Currently, Europe's data centre pipeline totals 66.1 gigawatts (GW), compared to 10.8 GW of operational capacity. Technology giants, including Google, Microsoft, Meta, Amazon, and Google, have demonstrated a willingness to pay premiums for long-term nuclear power.

Google recently entered into a 22-year power purchase agreement with Finnish energy firm Fortum, covering nuclear generation, with an estimated 60% premium over current electricity rates. Small modular reactors (SMRs), due to their smaller scale, might play a more prominent role as demand grows, enabling capacity additions closer to large industrial and data centre users.

Currently, Europe lacks commercial SMRs, with initial projects slated for the early 2030s. The policy environment has evolved, with several European nations extending reactor lifetimes or backing new projects following years of nuclear retrenchment. The European Commission estimates that €241 billion of investment will be needed through 2050 for new large reactors and lifetime extensions.

France and the Nordic countries could be particularly affected by rising data centre demand, given their electricity surpluses and relatively competitive power prices. As competition for available electricity intensifies, regional prices may rise, bolstering the economics of additional nuclear generation.