DOE says data centers ‘crucial’ for country’s future

Cedar Rapids —U.S. Department of Energy Deputy Secretary James Danly was in Iowa Tuesday, speaking on the virtues of data centers while calling for a “nuclear renaissance” in relation to the nation’s growing electricity demands.

Danly spoke at a Cedar Rapids energy symposium hosted by Corridor Business Journal and focused on the Duane Arnold Energy Center restart. 

Duane Arnold Energy Center, Iowa’s only nuclear energy facility, began decommissioning in 2020, but is slated to become operational again by the end of 2028. The 615-megawatt plant will provide power to a Google data center developing in the Cedar Rapids area. 

Danly said data centers are “absolutely crucial for America’s future.” 

Danly said this because of the investments currently going toward data centers, but also because of the “exponential increase in technological advancement” that artificial intelligence models, which are powered by data centers, provide. He referenced the DOE’s Genesis Mission, an AI initiative scale up research and development efforts across the department. 

“If there are unnecessary regulatory obstacles to the development of data centers, the United States is going to be put back on the scales in competition with other countries,” Danly said. 

Projections from the U.S. Energy Information Administration show that U.S. electricity demands have increased by more than 2% annually, on average, over the past 5 years after nearly 15 years of mostly consistent energy consumption. The administration anticipates demand will continue to increase at a rate of 0.9% to 1.6%, annually through 2050. DOE estimates data centers will consume between 6% and 12% of total U.S. electricity by 2028. 

Danly said while it seems “counterintuitive,” increased demand on a system is the “best thing that can happen” for ratepayers who want lower utility rates. 

He said a large industrial user will shoulder a greater percentage of the total fixed cost of the system, which can help keep rates low. From a policy perspective, he said it’s important that regulatory oversight does not “inhibit the development of generation.” 

Garrett Goldfinger, the senior director of nuclear development at NextEra Energy, spoke at the symposium and said the 25-year commitment from Google and Central Iowa Power Cooperative, or CIPCO, to purchase power from the plant, provided the “economic certainty” that allowed NextEra to move forward with the project. 

Danly said commercial agreements like the one between Google and Duane Arnold Energy Center, will be the “bedrock” of energy generation projects. 

“What you want is to set the conditions where people can pursue those commercial arrangements … with surety that they’re going to be able to arrange things to their own benefit on both sides,” Danly said. 

The deputy secretary said that as demand signals increase, the federal government is working to develop the nuclear energy industry “as quickly as possible.” 

Duane Arnold Energy Center is one of several nuclear energy restart projects in the works as part of  President Donald Trump’s order to “reinvigorate” nuclear energy. 

Iowa Attorney General Brenna Bird, who toured the Duane Arnold Energy Center Tuesday and introduced Danly at the symposium, said it was a “blessing” to have the restart occurring in Iowa. 

“What an amazing thing to have here in this community, and to have the recommissioning happening,” Bird said. 

Once fully operational, the plant is expected to have approximately 400 full-time employees and generate more than $9 billion in economic impact for Iowa, according to an economic impact analysis. 

Danly said after the country has recommissioned its existing nuclear plants, the next step is to upgrade, or increase the total output, of existing facilities. Then, the focus will move toward building new plants. 

On Tuesday, the DOE announced a $17.5 billion loan program to help finance large-scale, commercial nuclear reactors and “rebuild America’s commercial nuclear supply chain.” 

Danly said the completion of each nuclear energy project builds “greater confidence” in the role that nuclear energy has in the economy, and helps other projects get underway.

“When Duane Arnold comes online, it is going to be another sign that the nuclear renaissance is underway,” Danly said.