Naval reactors proposed as power source for AI data centers

Commerce Secretary Howard Lutnick appeared on Fox News to discuss new energy sources for data centers. He said data centers would add power generation and capacity to the grid alongside new construction.

Energy prices have risen near data center sites across the United States. Lutnick said additional generation tied to new facilities would lower prices, but that outcome has not occurred to date.

Higher demand has led to added infrastructure costs for the wider grid. These costs are not fully covered by higher rates paid by hyperscale data center operators.

Some costs occur beyond the immediate area of new facilities. These include upgrades and maintenance to upstream transformers and power lines.

Developers are pursuing on-site, behind-the-meter power solutions for artificial intelligence data centers. These efforts have had limited practical success so far.

HGP Intelligent Energy, a Texas-based power developer, has proposed a different approach. The company wants to use reactors from retired U.S. Navy submarines and aircraft carriers.

HGP proposes using two naval reactors to power a data center project in Oak Ridge, Tennessee. The company estimates the reactors could generate about 450 to 520 megawatts of electricity.

The proposal describes the approach as a fast way to add new baseload power. It comes as the commercial nuclear industry faces delays in building new reactors.

The proposal is considered unlikely to receive approval without government control. HGP recommends that custody of the reactors remain with the Department of Energy.

Naval reactors differ from commercial nuclear reactors. They use uranium enriched to more than 90 percent, compared with less than 5 percent for commercial reactors.

High enrichment levels raise concerns about nuclear weapons proliferation. There are also questions about operating reactors removed from ships late in their service lives.

Some reactors are decommissioned because they can no longer operate as designed. Others are retired when their host vessels are decommissioned.

Technical challenges include reactor physics and material integrity. Modifying reactors to use lower enriched fuel could be difficult due to core design.

Supporters note the Naval Nuclear Propulsion Program’s operational record. The program has logged more than 7,500 reactor years of safe operation.