8 ms·
If it wasn't profitable in 2019, why is profitable now? Because Microsoft is commiting to be a customer?
by comrh 10mo ago
If it wasn't profitable in 2019, why is profitable now? Because Microsoft is commiting to be a customer?
- pseudalopex 10mo agoMicrosoft committed to purchase the plant's capacity for 20 years. And US electricity demand grew very slowly from 2005 to 2020. It is growing rapidly now.
- dreamcompiler 10mo agoAt around $110/MWh, according to the article. This is about 50% higher than what utility-scale PV or wind would cost. Guess they're using OpenAI accounting.
- ip26 10mo agoI imagine data centers make the best economic sense when they can run full tilt 24/7. You’ll double your payoff time if you can only run work when the sun shines.
- epistasis 10mo agoIn most parts of the country, solar plus batteries to get through 24 hours will be cheaper than $110/MWh.
- bawolff 10mo agoDo you have a source for that, when i googled it came up closer to $200/MWh for new york, but that was from older sources. The only thing i saw approaching this price point was if you were somewhere like las vegas. I also think you would need more than 24 hours battery. You have to prepare for freak weather events that reduce system capacity. I also wonder what time horizon we are talking. solar and batteries presumably have to be replaced more often than nuclear.
- toast0 10mo ago> I also think you would need more than 24 hours battery. You have to prepare for freak weather events that reduce system capacity. In general, yes. Not really in the context of utility generation for a DC, though. A DC should have onsite backup generation, at least to supply critical loads. If your contracted utility PV + storage runs out, and there's no spare grid capacity available (or it's too expensive) you can switch to onsite power for the duration. The capex for backup power is already required, so you're just looking at additional spending for fuel, maybe maintenance if the situation requires enough hours on backup.
- pseudalopex 10mo agoThe article cited a report which said new build solar and storage could cost from $50 to $131. And new build wind and storage could cost $44 to $123.[1] Civilian nuclear reactors replace fuel gradually over 3 to 6 years typically. 20 year old solar panels work now. New solar panels are expected to work over 30 years. Utility scale lithium ion batteries are expected to last 10 to 15 years. [1] https://www.lazard.com/media/5tlbhyla/lazards-lcoeplus-june-2025-_vf.pdf https://www.lazard.com/media/5tlbhyla/lazards-lcoeplus-june-...
- AniseAbyss 10mo ago[dead]
- epistasis 10mo agoThe electricity cost is actually very low compared to the capital cost of the stuff the the electricity runs. But not having access to the electricity means that all that capital is going to waste. So Microsoft is less price sensitive than other electricity customers. Plus they get the PR and hype boost from saying they are using nuclear, which is huge right now. Which is big enough that the other hyperscalers thought they had to announce new nuclear projects, even though it will be a decade before those new nuclear projects could ever come on line.
- abtinf 10mo agoRunning a data center on unreliable energy would be shockingly stupid. And unreliable energy sources routinely exclude the wildly uneconomical costs and environmental impact it would take to make them reliable.
- epistasis 10mo agoNuclear power plants go down for an entire month at a time for refueling.
- lmm 10mo agoSure - at scheduled, predictable times. That matters.
- ViewTrick1002 10mo agoExcept when it’s unscheduled. For months on end. See for example Oskarshamn 3 in Sweden having a 7 month long unscheduled outage this year. Ringhals 4 had an 8 month unscheduled outage during the energy crisis.
- rkomorn 10mo agoTangent, but "outage" and "7 month" makes me feel like we need a new word. Maybe modern day and tech has given "outage" a much shorter connotation than what it meant in the past. 7 months? That's almost longer than the Christmas offseason.
- natmaka 10mo agoA machine that operates continuously is a perfect machine, and no machine is perfect. The greater the number and diversity of machines, as well as their geographical dispersion, the greater their availability. In this respect, a mix of renewables (solar, wind, geothermal, biomass, etc.) deployed on a continental scale, along with storage (batteries and V2(G|H), hydro, green hydrogen...) is unbeatable (total cost, availability, risk, etc.).
- 10mo ago
- UltraSane 10mo agoNuclear power is reliable 24/7 while wind and solar are not and handling this costs money. Microsoft has said that they have more GPUs than electricity to run them so even at $110/MWh it makes sense for them.
- triceratops 10mo agoIs new nuclear cheaper than new batteries for 24/7 power?
- UltraSane 10mo agoIf built by South Korea or China then yes. If built by the US then probably not. But three mile island is already built.
- triceratops 10mo agoChina's building a lot more solar than nuclear. You'd think if nuclear was cheaper it would be the other way around.
- UltraSane 10mo agoThey are still building lots of nuclear reactors including liquid salt thorium reactors. They aren't irrationally scared of nuclear energy.
- triceratops 10mo agoYes but they're building more solar. Which they wouldn't do if, as you claimed, nuclear was cheaper.
- stonogo 10mo agoI don't know where this '24/7' stuff comes from; they have maintenance outages like anything else. Refueling takes months every couple years, so you're going to have to "handle this" even with nuclear.
- jazzyjackson 10mo ago> utility-scale PV or wind would cost Are you comparing cost against what electricity currently costs or what it would cost to add capacity? I feel like Microsoft is not acting on hype here, they're going to pay a premium just because it's cool to refire a nuclear plant? Surely they've done the math to decide the feasibility of building out a few acres of solar panels.
- throwup238 10mo agoThere could also be incentives beyond the loan or political pressure we’re not privy to. Such pressure is part of the reason Boeing ended up acquiring McDonnell Douglass even though it wasn’t exactly the financial best move for Boeing. If the US government is serious about restarting its nuclear industry then this is a small first step to build up the skills for building new reactors or refurbishing old ones. It’s not really that farfetched, either. If the government expects a conflict in the next few decades, solar build out might become much more expensive or impossible since our domestic production might not be enough to support NATO’s growth.
- fodkodrasz 10mo agoYou ignore the fact that these datacenters also operate at night and in windless times. PV did get spectacularly cheaper, but is not a panacea. Nuclear is great fit for constant load, for example a cloud datacenter where relatively constant utilization is also a business goal and multiple incentives are in place to promote this. (eg. spot pricing to move part of the load off from peaks)
- _3u10 10mo agoThey probably want to operate their Datacenter at night or when the wind isn’t blowing.
- pseudalopex 10mo agoThe article said Jefferies analysts estimated Microsoft might pay $110 to $115. The article cited Lazard analysts' estimates to say this was more expensive than solar or wind. But Lazard's report said new build solar and storage could cost from $50 to $131. And new build wind and storage could cost $44 to $123. Costs will rise over 20 years almost certainly. And Microsoft had already large solar and wind power purchase agreements.[1] These could be affected by China's rare earth export controls scheduled to start next year. Hedging this position would be sensible. [1] https://www.microsoft.com/en-us/microsoft-cloud/blog/2024/09/20/accelerating-the-addition-of-carbon-free-energy-an-update-on-progress/ https://www.microsoft.com/en-us/microsoft-cloud/blog/2024/09...
- deleted 10mo ago[deleted]