Data centers push costs higher as AI drives surge in power demand
The surge in AI demand is increasing data center construction costs and power consumption. In response, Constellation is investing $800 million to upgrade its Braidwood and Byron nuclear plants in Illinois, adding 158 megawatts to the grid by 2029. This initiative is part of a broader discussion among utilities and environmental groups on how best to meet the state's growing energy needs.
The artificial intelligence boom is significantly increasing demand for computing power, leading to larger and more expensive data centers. According to the Chicago Business Journal, construction costs per watt are projected to rise by 9% in 2024 and 5.5% in 2025, straining supplies of electricity, equipment, and labor. Jeff Casey of Burns & McDonnell described this as the "largest coordinated capital deployment since the industrial revolution," impacting every aspect of data center development.
In Illinois, this surging power demand has revitalized interest in nuclear energy. Constellation has invested $800 million to upgrade its Braidwood and Byron nuclear plants, aiming to add 158 megawatts to the grid. Work on the Byron plant commenced in March and is anticipated to conclude by 2028, while upgrades at Braidwood are slated to begin next spring and finish in 2029. Dwayne Pickett, Vice President of Government Affairs and Regulatory Advocacy for Constellation, emphasized the "need for power" and the opportunity to meet it with reliable nuclear generation.
Utilities and policy groups in Illinois are debating the optimal strategy to meet future energy needs. Matt Tomc of Ameren acknowledged the value of intermittent wind and solar power but highlighted nuclear energy's importance for grid reliability. Conversely, Jen Walling of the Illinois Environmental Council advocated for renewables, citing their faster construction and lower costs. Both Tomc and a ComEd spokesperson cautioned that nuclear power alone cannot resolve Illinois' energy challenges, noting that rising PJM prices underscore an urgent need for more generation capacity.