More ions in the fire appears to be the inevitable direction for seeking reliable clean energy. Over one hundred years ago Marie Curie began to study uranic rays emanating from uranium to help fill gaps in the periodic table, to explore their half life and other properties that led to the discovery of radium. During the last decade, federal and state incentives have largely supported green energy sources, wind and solar, that are not predictably available. Nuclear energy, fueled by isotopes of uranium, has not received large support in the U.S. due to its history of three meltdowns and its association with weaponry. However, France has continued to commission new nuclear facilities.
Private market demand for electricity is soaring and the reliable need for power to fill that demand has again brought nuclear on to the stage as a reliable source to fill that need. The huge investments in data centers and demand for AI are creating an enormous need for reliable electricity. Amazon Web Services just purchased a Pennsylvania based data center in order to obtain the power from its on-campus nuclear power plant. Microsoft has contracted to reopen a reactor at infamous Three Mile Island in Pennsylvania to provide power to its data centers. Google has contracted with Kairos Power to build a series of small modular nuclear reactors to power its data centers. A substantial period of time is required until this capacity will be fully available. However, in many states the power demand already exists. Regular blackouts or brownouts in CA occur as the state has closed many traditional power generation facilities as electric car and air conditioning demand has increased strain on the grid. Data Centers have resorted to generating their own power using natural gas powered generators placed on the data center campuses. In some ways the current situation recalls the day of Samuel Insull who, a century ago, created a large portion of the electric grid systems in the U.S.
Private equity has the potential for a large role in the new data center infrastructure expansion as enormous resources besides power generation are required to support this computing power. A broad array of equipment and sources are involved ranging from cooling systems, screening, wiring and electric connections to fire control. Two of our Fund VII companies, MEI and IWG, have large presences in the data center business as MEI provides rigging, storage and logistics for expensive specialized equipment and IWG builds specialty wire. We expect more opportunities are in the offing to grow new businesses as the data center footprint is rapidly expanding.
In 1984 the Grace Commission consisting of business leaders presented its report on government waste and its recommendations to save $42 Billion by reducing waste. The forming of this commission initiated the original “drain the swamp” cliché. Congress chose to ignore virtually all of its suggestions. The Grace Commission was preceded, in 1937, by the Brownlaw Committee to improve federal efficiency. Now DOGE (Dept. of Government Efficiency) is being proposed to reduce government waste. The expected game of DOGEBALL will put an unstoppable force, Musk, versus an immovable object, the federal bureaucracy. It will be interesting to see which prevails. I’m Rob Morris and I approved this blog