The company is investing in small nuclear reactors to power big data generators in eastern Oregon
Power packed: According to X-Energy, its Xe-100 is an 80 MWe reactor that can be scaled into a “four-pack” 320 MWe power plant with a modular design. Image: X-Energy
By Kendra Chamberlain. November 5, 2024. Amazon announced an agreement with Energy Northwest, a consortium of 29 utilities in Washington, to build four small nuclear reactors (SMRs) at the Columbia Generating Station in Richland, Washington.
The four reactors will be built by Maryland-based X-Energy and generate 320 MW of energy by the early 2030s.
Amazon will be the primary customer of that power, and likely use it to power its data centers located in eastern Oregon, according to OPB.
Oregon state law prevents building new nuclear energy generation in the state without voter approval. The new SMR project would be located next to Energy Northwest’s existing nuclear generation plant near the Columbia River.
SMRs are touted by the nuclear industry as a better way to deploy “clean” energy across the United States to help transition the nation’s grids off fossil fuels. SMRs have much lower associated greenhouse gas emissions.
Still, the reactor design has struggled to gain a foothold in the United States.
Amazon recently led a $500 million investment round in X-Energy, which CEO J. Clay Sell told CNBC proved to be a boon for the burgeoning SMR industry.
“The biggest gaping hole we had to fill was the capital to build new projects,” said Sell. “Amazon stepping up and saying we will provide the capital, hundreds of millions of dollars to construct these projects and get them online, that’s one of the most transformative announcements our sector has seen.”
Energy Northwest said it’s been interested in X-Energy’s reactors since 2020, though the company will need to win approval for its designs from the U.S. Nuclear Regulatory Commission and will need to acquire approval from Washington State’s Energy Facility Site Evaluation Council before construction can begin.
Amazon will fund the initial two-year feasibility phase of the SMR project. That’ll include environmental, safety, permitting, licensing and risk analyses, according to Energy Northwest.
If Amazon and Energy Northwest decide to go ahead with the project, Amazon will provide an offtake agreement that would allow the project to be financed. But that decision is years away.
Up to eight more SMRs could be added to the site in future phases of the agreement, generating an additional 640 MW.
Some of that energy could eventually power homes and businesses—if any of Energy Northwest’s 29 members want to participate in the project.
Ballooning costs
There are only three existing SMR plants in use today, two in Russia and one in China. A fourth plant is being built in Argentina.
There are no SMR plants in operation in the United States.
SMR projects have a track record of ballooning budgets and protracted timelines, which has made seeing its projects to completion a challenge in the United States.
Spiraling costs have made it tough to complete SMR projects. Source: IEEFA
To date, only one reactor design has been approved by the U.S. Nuclear Regulatory Commission. That design, owned by Oregon-based company NuScale, was part of a pioneering SMR project in Idaho that collapsed in late 2023, after costs rose so high that customers began pulling out of the project, as reported by Columbia Insight.
Energy Northwest told Columbia Insight funding for the actual reactors hasn’t been secured yet, but Amazon intends to provide an “offtake agreement” that would allow the project to be financed.
‘There is no plan to ask the public to provide any sort of project funding or loan guarantee for the project,” Energy Northwest spokesperson Kelly Rae wrote in an email.
She added that member utilities that want to participate “would be expected to sign an offtake agreement that would back financing as well.”
None of the utilities have yet committed to joining.
What about waste?
As with all nuclear power, there’s the thorny issue of what to do with the toxic waste nuclear reactors generate.
Rae told Columbia Insight that the waste generated by the small nuclear reactors will be stored on-site “until a permanent repository is provided by the federal government.”
David Schlissel, director of resource planning at the Ohio-based Institute for Energy Economics and Financial Analysis (IEEFA), isn’t sold on SMRs, given the technology’s shaky track record.
“We’re now in the hype stage,” Schlissel told Columbia Insight. “Until there’s an actual order, and a contract, who knows what they’re going to do.”
The risks remain the same, he added, pointing to the massive project cost increases and extended timelines associated with the existing SMR projects.
“How much is it going to cost, how long is it going to take?” he said. “Who bears the risk of costs is a big unanswered question.”
