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Southern Company CEO Emphasizes US Nuclear Power Expansion For Electricity Demand

Southern Company CEO Emphasizes US Nuclear Power Expansion For Electricity Demand

During the Reuters Global Energy Transition conference in New York City, Southern Company CEO Chris Womack emphasized the urgent need for the United States to construct a significant number of nuclear power plants to meet escalating energy demands and fulfill climate objectives.

Womack stated that the country will require more nuclear plants in the future, estimating the need for around 10 gigawatts of additional nuclear power capacity. This equates to approximately 10 new nuclear plants, each with a single reactor capable of generating about one gigawatt of electricity, according to the Department of Energy’s standards.

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Southern Company, among the largest electricity providers in the nation and ranked second by market capitalization in the Utilities Select Sector SPDR Fund (XLU), serves millions of customers in Georgia, Alabama, and Mississippi.

Last year, the Atlanta-based utility achieved a significant milestone by completing the first U.S. nuclear plant in over 30 years, with the second of two new reactors commencing commercial operations in April.

Womack highlighted a notable surge in electricity demand, comparable to levels not seen since the introduction of air conditioning and heat pumps in the southern United States during the 1970s and 1980s. He attributed this growth to factors such as population expansion, manufacturing onshoring, and increasing demands from data centers and artificial intelligence applications.

Atlanta has seen a significant rise in data center construction, increasing by 211% to 732 megawatts in 2023, making it one of the fastest-growing markets in the country. Southern Company’s stock has rebounded in 2024, rising by 11% year-to-date, driven by the demand for power.

Chris Womack highlighted that 80% of Southern Company’s upcoming demand through the end of the decade will be met by renewable energy sources, alongside contributions from natural gas and nuclear power to ensure reliable electricity supply.

Womack emphasized the critical role of nuclear power in the decarbonization strategy, noting its ability to provide dependable electricity without carbon emissions. He also pointed out that while renewables are crucial, they require more cost-effective and longer-lasting battery solutions to power facilities like data centers continuously at a commercial scale.

Constructing new nuclear plants is costly and entails a lengthy permitting and construction process. Southern Company’s experience with the new reactors at Plant Vogtle in Georgia exemplifies this challenge, as they opened approximately seven years behind schedule and exceeded initial cost estimates by over $30 billion, according to the Energy Information Administration.

Not everyone in the power industry shares the enthusiasm for nuclear power’s future. AES Corp CEO Andres Gluski recently expressed skepticism, describing the current excitement over nuclear as somewhat exaggerated. AES, a significant provider of power for tech companies expanding data centers, sees limitations in recontracting existing nuclear energy to such sites.

Gluski highlighted uncertainties surrounding the future cost of new nuclear projects. Chris Womack emphasized the need for government incentives and effective cost management strategies to mitigate these challenges. He also emphasized the potential of small modular nuclear reactors, which are less capital-intensive and easier to site compared to traditional plants, as a crucial development in the industry.

Scott Strazik, CEO of GE Vernova, echoed this sentiment, predicting that small modular reactors will increasingly contribute to the energy mix. GE Vernova plans to commission a small modular reactor in Ontario, Canada, by 2029, underscoring the growing importance of these compact nuclear facilities in meeting energy demands.