Trump Administration To Finance 5 New Nuclear Plants as Data Centers Demand More Energy

The Department of Energy will help to finance large-scale nuclear reactors for five new power plants, as energy demand for data centers surges.

Department of Energy Secretary Chris Wright announced on June 23 the DOE would finance five eligible nuclear power plants with two Westinghouse reactors each. The $17.5 billion loans should mean the new nuclear power plants are under construction by 2030.

"These conditional loans will play an important role in reviving the supply chain needed for America to once again build large-scale commercial reactors," Wright said.

The government hasn't picked where the reactors will go. Westinghouse says it has letters of intent with seven "potential partners," each with project sites in mind. It did not name any partners or locations.

Each reactor would generate 1.1 gigawatts of power. The 10 combined reactors would generate enough power for 10 million homes. But they also come as the nation is seeing an explosion of construction of power-hungry data center projects.

Data centers have an outsized energy demand, and with hundreds under construction or planned, energy demands in the nation will increase. Goldman Sachs estimated that data-center power demand will more than double from 2025 to 2027. But only about 50% to 60% of data center capacity will come online due to delays and cancellations, it said.

Currently, there are more than 4,000 data centers throughout the country with Virginia and Texas leading the way with at least 570 and 408 data centers, respectively.

President Donald Trump earlier this year called on data center developers to provide their own power for projects. He was wary of homeowner complaints that the centers drive up electric bills.

Demand surge

Wright said in the statement that the loans will accelerate the timeline for new power production. Nuclear plants often take the better part of a decade to build. In recent decades, only a few have successfully been built.

A large upfront financial commitment will also make developing the plants cheaper, Wright said, because they will make it more efficient to source components on the supply chain.

"They will also help accelerate the timeline of building those large-scale reactors by up to three years, lowering construction costs and ensuring the United States is able to deliver on President Trump’s bold and ambitious energy addition agenda,” Wright said on June 23.

Westinghouse will build the reactors while the government selects utilities that will get grants. The government will them work with the local utility companies to select the sites. Both Westinghouse and the utilities will have to commit $500 million each for DOE loan funds upfront.

The pace of data center development has drawn a lot of concern from towns across the country. Some cities and states have enacted moratoriums on tax benefits to attract more developments. Other cities have banned their development altogether.