When to colocate data centers with generation

Latitude Media, covering the new frontiers of the energy transition. I'm Shell Khan and this is Catalyst. I I don't think there's a credible argument for behind the meter nuclear at a data center i in the near future. And by near future I mean the next Couple of decades.

We're just saying not on site. I mean that's the distinction I want to make here. Is like w we are going to and I think we should build a lot of new nuclear in the US. I just don't know why it needs to be co-located open data center. I don't think it does. because it doesn't solve all those problems that you're talking about. Coming up, near, far, wherever you are, you'll be powering my data center.

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All right, so here's a thing that often happens, a cycle that plays out again and again and again. Here are the conditions precedent to this cycle. There has to be a hot market with lots of activity, lots of investment, and plenty of hype. And then a trend begins. A few players start to do something new, it catches on, it gains steam, and at some point it kind of jumps the shark. And then everyone starts talking about doing that thing.

Or just doing it, but the original rationale for it has kind of been lost, and people stop questioning exactly why it makes sense. I've been wondering whether that's starting to happen lately in a particular part of data center world, specifically the idea of pairing on-site power generation with data centers behind the

There are so many announcements about this right now, ranging from it actually happening. For example, the XAI data center that is actually running on generators, or there's a big meta project in Louisiana that's going to build a bunch of new natural gas. Two very speculative things, which is where I would put a bunch of the announcements around new nuclear getting co-located with data centers in various locations.

We have talked about this a little bit before in a different context with Sheldon Kimber, who's the the CEO of Intersect Power, which is adopting a strategy, at least in part, of co-locating wind, solar, storage, and some natural gas with data centers they're building, especially in Texas. But I was having this conversation about when it doesn't doesn't make sense to put generation on site a couple of weeks ago.

with my friend Brian Janice. You have heard Brian on the show before. He's the co-founder of Cloverleaf Infrastructure. He's the former head of energy at Microsoft and he thinks about this stuff day in and day out. Anyway, it was A good conversation. So I thought we would do it again in front of Mike's. So with no further ado, here's Brian. Brian, welcome back. Thank you. Appreciate you having me again.

Okay, first thing. Um when you're developing a new data center campus, land, whatever. When you're developing a new data center, what are the basic requirements from a power perspective? And there are a bunch of other requirements. What are the basic requirements that you have from a power perspective? What has to be

What has to be true is you still have to have a very high level of availability of power. I mean, outside of of crypto operations, any sort of modern whether it's an AI data center or a cloud data center still necessitates a significantly high availability of power, uh in part because, you know, the the capex costs associated with the infrastructure you're putting in there is so high.

uh you want to have high utilization, plus the services that you're serving out of that, whether it's AI inferencing or some sort of traditional cloud application, still requires a high level of availability. The one area that comes up a lot in this discussion is training.

and say just as training, can can that act a little bit more as a batch workload? And it's true by definition it can. And at the same time, Nobody wants to build a twenty billion dollar training model and just turn it on and off, you know, every time electricity starts to cut out. Well, isn't it true that my understanding from having now seen a few actual load profiles from these data centers is that

Actually, it is kind of operated in batch. Like independently it is. There's spiky load profiles, actually, right? But it's sort of a different question as to whether there can be peaks and valleys in the load profile versus whether there are force. peaks and valleys as a function of the electricity availability. Right. Exactly. Yes, exactly. And and I was talking to a big AI operator about this the other day, and their response to this was, we don't want any surprise.

Like if if we need to go down. And and it was more of like if we if we need to go down, we'd rather go down for a week than go down for a few hours every afternoon. Like we'd rather just know that it's coming and plan for it. But to be like completely dispatchable uh on an unplanned basis would likely be more problematic.

Okay, and so then the basic paradigm is connect a data center to the grid. The grid provides, generally speaking, high reliability, not quite high enough reliability to what you want. So you also put a UPS. on site, uh, which just bridges seconds to minutes of power outages, basically. And then you generally put backup generators on site as well, which are supposed to

you know, fill in the the blanks where you have longer outages. So that architecture, grid connection, UPS, backup gen set, that's the kind of basic, like dominant paradigm, right?

Correct. Yeah. Particularly for your traditional cloud data centers, you'll see that. Um, I think with some of the AI training sites, we've seen more of a move away from backup generators. Uh some of that is in part because of that batch. Like they could handle an outage. um if it if it ever happened. And keep in mind like the the outages we're talking about that the generators there to protect are pretty rare.

Because we're talking about these sites being connected at at very high voltages on the transmission system. So, you know, we're talking about like, you know, winter storm Uri sort of events that you're really concerned about. Um So in that case, both for that reason and I think out of necessity, because especially if you're talking about these gigawatt scale sites we're seeing, you're not getting diesel generators permitted at that sort of scale anyway. Though didn't XAI that that The Colossus.

Uh site. They just kinda did it, right? They just kinda did it. It it still wasn't at the scale of You know, even recently the sites that OpenAI has been talking about that was recently announced or with Oracle, like just today, really, or the last week, we've seen, you know, those were, you know, 1.3 gigawatts in Port Washington, Wisconsin that I'm quite familiar with.

uh another one point four gigawatts I believe in in Abilene. Uh I think for those kind of sites it would be very difficult to permit that scale of diesel generators in most markets. Right. Okay. But I guess the first point I wanted to make here is that'cause what we're gonna talk about here is this concept of of co locating generation with with data centers that seems to be

Fairly hypey at the moment. Um, but I wanted to first clarify by saying actually a lot of data centers, most data centers, certainly all cloud data centers, do have on-site generation already. It's just backup generation. And so th when we talk about the things like demand response and making data centers flexible and so on, you know, there is existing generation on site that could theoretically serve that in a lot of data centers. I think the limitation to that

tends to be an air permit one, right? You you have limits to how much you can operate those generators if they're diesel anyway. That that's right. Yeah. And we were always, you know, having to look at, you know, as we would build campuses larger and larger, we're sort of eating into those emissions allocations. And so you end up with less runtime, less ability to test those generators. you know, to keep them operational for emergency purposes.

So that's the first clarification. There is generation on site, but it's kind of limited. It's expensive. It's dirty, generally speaking. Um, but the thing that people are talking about a lot more now, and you see these announcements. coming, I think, from left, right, and center, is this concept of co-locating generation that's not intended to be backup generation. It's intended to either be it's intended to be prime power.

either to entirely serve the load of the data center, though I think that might be you tell me what you think. I think that's more of a mirage than anything else. More likely sitting there operating 247 or as close to 24 seven as it can alongside

a grid connection ultimately. So can you straw man for me the argument for like when you might actually want to do that? Yeah, I mean the argument is that if I go to utility and they tell me it's going to be five to seven years to get the connection at the scale I want, then maybe it's faster for me to just build my own generation.

So that that's the argument. And it's sort of further bolstered by the idea that which I actually think is A false idea, but an idea that because I'm putting a 24-7 load on the grid, I need to match it with a 24-7 generation source. And you hear that a lot out of the Carr administration about, well, wind and solar can't help us do what we need to do'cause they're intermittent. So we need to have lots of baseload generators'cause we need

To connect these data centers and we need to keep the lights on. So that's the other part of the argument that I need to match the output of this resource with what I need to input into my data. Okay, so two part argument there that you made. The first part is time to power, speed to power, which is the which is the term that has overtaken the industry. Um

That I think intuitively makes sense. And you you do hear about these extraordinarily long interconnection times. The interconnection queues are remarkably clogged. There are hundreds of gigawatts of theoretical data centers sitting in the inter the load interconnection queue of some utilities. And so of course it it makes intuitive sense that if you have the capacity to come online earlier via bringing your own generation.

some of these data center operators would certainly do that. Why do you think that that is at least to some degree a mirage?

Well, I think there's a number of reasons why. One, it assumes that while there's congestion on the electricity grid, there's not on the gas grid. And that's just not true. Like everything, there are certainly places I can go to get abundance amount of gas to supply a data center, but it's not true universally. It's not true that I can just always stick a pipe in the ground and get unlimited amount of gas to build data center.

And we should clarify that these generators folks are building, at least today, it's all gas, basically. It's not all gas. We should talk about some of the all other things people are talking about too. But most of it is gas. Most of it's gas, yes. So we're assuming what they're talking about in any sort of off-grid consideration today, at least you want to do it in the twenty thirties or twenty twenties, it's gonna be gas. Um

So so there are congested lots of congested sparchanti gas grid. So that's problem number one. Obviously we have lead time issues with the generators themselves, which has been much discussed. Uh you also have to deal with the integration issues into the data center itself. So data centers. Really?

uh I mean anyone who's designing a data center has always designed for two sources of power, right? You have the grid source and then you had your backup generator source. You could island, you know, people talk about data centers becoming microgrids. Data centers have always been microgrids. They've always been designed to do that.

And so getting to the level of redundancy that you would want in that system would require a significant overbuild of that system to meet the standard specification of any typical data center engineer. Uh And then when you think about that overbuild, then you get into the cost element. Because actually one of the arguments is made for off-grid is that, well, I don't have to pay all this TND, so it's going to be cheaper for me to just have my own islanded system.

In almost no case would that ever be true because you would overbuild that system. to meet the level of reliability. And we're not even getting into the level of reliability related to the intermittency sometimes of gas and the idea that you could actually get a firm gas connection, but we'll put that aside. Um but let's say you have a You know, data center it's a hundred megawatts of IT.

You've got a PUE of let's say 1.2. So now I'm at 120 megawatts of generation. And now I'm also thinking about having some sort of N plus redundancy. So I'm going to put in another unit.

You know, depending on the size of the units, you know, maybe I'm putting in another 20 megawatts or 30 megawatts of generation on top of that. So now I'm at 150 megawatts. And now I start to operate the data center. Well, most data centers significantly underutilize their peak, theoretical peak capacity. So you might only be running that thing at You know, uh on average. Or less, right?

Twenty four seven basis, right? Like I just I just was talking to a a data center operator who said that their average actual utilization relative to nameplate capacity is like forty to fifty percent over the course of a year. And so, you know, you can quickly do the math on if I'm paying twenty, seven hundred dollars a KW just roughly for that generation, and I'm having to overbuild it by, you know, maybe even two X. Right. The the per kilowatt hour cost of that system is extraordinarily high.

Uh and if you look at it in a place like Texas, for instance, where the the average price for electricity on any given day is actually pretty low. Like the the real-time price may be sitting around twenty dollars a megawatt hour. So you go off grid in Texas. And you're paying somewhere between a hundred and fifty to two hundred dollars a megawatt hour twenty four seven.

And your neighboring data center connected to the grid is paying twenty dollars for that same power. Now I'm leaving out the T and D, you know, I mean, there's yeah stuff on top of that. But, you know, i the the average cost of electricity in the market in Texas is pretty cheap most of the time.

Um and the only argument you know you ever had for building something like a baseload generator Texas is is that sometimes the price would go to five thousand or nine thousand dollars a megawatt hour, but with the massive amounts of solar and storage coming on the grid, which you've probably talked about in another show. Yeah, we're not seeing those spikes anymore. We're not seeing the scarcity pricing.

Yeah, we haven't talked about it that much. Volatility in in ERCOT is down, which is interesting. It's way down. Yeah, it's way down. So you don't have the scarcity pricing anymore, which is which which is effectively sort of the proxy for a capacity market there is that, you know, you you don't have a capacity payment, but every once in a while, you know, if you're dispatchable or 24-7 running, you get these really high rent payments.

But if those don't exist anymore, which not to say they couldn't come back, but they've certainly been decimated the last couple of years with solar and storage, it makes that economic argument even harder. Okay, so now I'm gonna bring your term back to you though, of course. You coined the term the bitwatt spread. And the the the core principle of the bitwatt spread is you have to understand that actually the cost of electricity is sort of not important.

in the context of the revenue and earnings you're gonna get off of operating a data center. So assuming that that remains true here, yes, maybe it is not actually cheaper to build your own Generation, but if it does get you faster time to power, that probably is a trade you would make, right? Just on a pure economic basis.

It it probably is. In a lot of cases you would. Yeah. So it's not a it's not a deal killer that you're paying that much for power. Um it's just something you have to take into consideration that you you're not getting necessarily an economic benefit for doing that. And you're still competing with others that might be able to get good access elsewhere. Uh, and they're gonna obviously end up with much better margins than you.

Still, it may not stop you from doing it because you'd rather have the revenue versus not have it. And that's generally the argument that's made in the off-grid scenario is well, I can't get the power anyway, so I might as well do it this way. Uh now I tend to and we can kind of get into sort of what are some of the strategies that would actually get you that power. And I I tend to be maybe more optimistic about the availability of grid power than others.

Uh it's like it's almost like a lot of the industries just throw out their hands and like, well, this is hard with the utilities, so I'm just gonna go, you know, kinda take my ball and go home.

I think that's the key difference between at least how I've heard you articulate the your thinking here and others, which is that I think the assumption Otherwise is that necessity is the mother of invention and there is necessity in the sense that like we're just we can't find sites where you can get connected.

with a large enough data center fast enough. And so even if it is suboptimal, even if you're gonna sacrifice a little bit of reliability or you need to overbuild and you need to pay more, you know, even if all those things are true. We're still gonna have to do it if we're gonna build out the data center capacity that everybody wants and maybe needs. Uh, I think your view is a little different in that you actually don't think you think there is more headroom.

in interconnection capacity on a reasonable timeframe on the grid. Is that right? Do I've have I characterized your view right?

Yes, that is my view. And why do you think people o are missing that? A couple of things. First of all, and it only took us what twenty minutes maybe into this to to mention Tyler Norris's name. So Tyler's paper about flexibility, which everyone's talking about and rightly so I was actually just with Tyler this week talking about this.

Um, Tyler's paper does a great job of articulating my perspective, which is the problem we're trying to solve here is not that I need a 24-7 generation to match a 24-7 load. It's that I need to solve for the summer peaks and the winter system peaks uh in order to connect a load. That's what a utility does. And I think it's a I I think there's a misunderstanding that when you go to utility and say, Okay

Where's the power gonna come from? The utility goes and solves for eight thousand seven hundred and sixty hours. Where's your power gonna come from? That's not what they do. They look at would the incremental addition of this load on the system cause me to exceed what I can supply on the hottest summer day and the coldest winter morning. So first of all, it's it's a capacity problem, not an energy problem.

Um, and so flexibility, being able to identify sources where we can, whether it's on the customer side of the meter or the utility side of the meter, unlock more flexibility and unlock more capacity on that system is really the goal. The second part is in addition to the time element, there's also this sort of space element. I mean, the way to think about the electric grid is it's about moving power through space and time, right? You generate it at a particular time.

You move it through space with transmission lines, you can move it through time with storage and with other types of flexibility. And so when you think about the the orchestration of that system. The argument that you're hearing somewhat from the current administration is that, well, we can't possibly do it without lots more base load generation.

all the while while they're canceling transmission lines, like the Grain Belt uh project. But the transmission line itself is a substitution for baseload power because if you can move more power over more space. you're reducing the need to have to generate that power on the other end of that congestion. So in that sense, transmission and gener and generation are sort of substitutionary.

And storage is the same way. Like if a company like Form Energy is really successful at scaling up 120 plus hour batteries. You actually need less transmission because you can put batteries on those sides of those congested lines and store it for time. So this whole notion that

We need X. Fill fill in the blank tack. You know, I need combined cycle plants running very high utilization to supply data centers just isn't true because it just it's not it you have to look at that in the context of what are all the other things that we have on the system that are able to meet that same need, but just in a some different combination of Space and time.

Right. And so for that reason, I I just I think there are ways that we can solve this problem in terms of getting more out of the existing grid. And that includes things like grid enhancing technologies. It includes using varying durations of storage. uh to help alleviate transmission connection. It includes advanced conductors.

There's a lot of tools that we have. I virtual power plants, you know, I mean I can keep going on and on about there's all these different things we have. The problem is I think for most people they boil it down to this simplistic, you know, 24-7 needs 24-7 versus I can orchestrate all these things and and in in essence replicate that 24-7 output. I just did it with a dozen different things rather than one thing.

My view is not only is that going to be faster because a lot of these things already exist or are relatively easy to deploy, it's also going to be cheaper because there's less overall infrastructure I have to build, and it's gonna end up being more sustainable. Are you tired of overpaying for big name PR firms but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks?

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We've talked about this a little bit before, but I'm curious because it's evolving fast. What's your view of how the How the model for that evolves. appealing about the I'm just gonna put a generator on site at the at the data center is that you have a single agent, right? Whoever's developing the data center says, okay, I'm gonna I'm gonna go buy a bunch of

uh gas turbines and I'm gonna put them on site and that's gonna reduce my load to the grid and it's all in my control. Whereas some of the things that you're talking about, it's a multi party problem, right? Like grid enhancing technologies have to be deployed by the utility. There's nobody else to do it. So it involves more coordination.

We're starting to see some of these sort of interesting novel programs emerge where utilities say, if you're a large load and you want to get interconnected, you can bring your own generation, bring your own capacity, I guess.

And they can include batteries in that or things like that. But what are you seeing happen? Is is there like Is there a programmatic, scalable way to use the mixture of resources that you're talking about, as opposed to it all being these like unique snowflaky bilateral type of deals? Yeah, and look uh to be honest, this is where my argument maybe falls apart, right? Because the the orchestration of this is the real challenge.

Like in theory, like what I'm describing is faster, cheaper, and more sustainable. Uh and I do believe we can add a lot of capacity to the existing grid. And yeah.

I have to orchestrate this behind three thousand different utilities in the United States and, you know, multiple different RTOs with different rules about how they accredit capacity. And so this this orchestration opportunity really is I think the huge opportunity to end up in a world where we actually do connect a lot more of the stuff to the grid rather than end up in a world where everything is bifurcated behind the meter, which I think is a is a worse outcome.

And so it does require a lot of innovation. And some of that is just sort of boots on the ground work. And that's sort of what Cloverleaf does. We go work with utilities to try to figure out, you know, on a case by case basis, how do we implement these things and how do we get these load connected faster. But then there's other pieces like, you know, doing the actual grid analytics.

uh which there's numerous companies we could talk about that are doing that sort of thing, uh like Arenia or folks that are trying to come up with new business models like Greg Care around how you you know implement these things um and and many others. So

I'm I'm encouraged by a lot of folks are sort of honing in on this problem and trying to figure out, you know, how do we reduce the friction here? Um, how do we help utilities to understand you know, hey, here here's a f a better way to do this that would enable you know more rapid load growth on your system where you're not losing out to these sort of off-grid competitors, if you will.

The other version of an on-site generation thesis that I've seen that I don't know on its face. seems somewhat logical to me is it's not about off grid. It's not about like, okay, my my grid connection's coming in five years. I'm gonna put generation on site and go off grid until the grid connection arrives necessarily. It's about reducing the

uh what you look like to the grid from an interconnect capacity. So like if you want to site a 500 megawatt data center and the utility says, I've got 300 megawatts for you at this site. Throw probably more than 200 megawatts on site, again for redundancy purposes, but throw some amount of generation on site and operate it such that you never pull more than your maximum interconnect capacity on the grid. And then you unlock a site

that is at a scale smaller than what you otherwise would have been able to do. Does that have legs to you? Th that does, yes.'Cause'cause what you're there doing in that case is you're you're already do starting to work on that orchestration with the utility.

Uh now the question in that scenario is putting that generation behind your meter the the fastest, most efficient way to do that orchestration? You know, or does is putting uh uh A long duration battery on the utility side of the meter saw the same thing. Again, yeah. It's a question of like what is optimal to which I'm pretty sure I know the answer, versus like what is Because expedient.

And in some ways, you know, the less infrastructure you have to build, the faster it's gonna be, right? So you you know, what the argument you would make is, well, the fastest way to do it is through like a virtual demand response sort of program. Like take a bunch of loads that would agree to get off during certain hours in exchange for some price, like you're not building anything there. You're just orchestrating, you know, a VPP.

Which w we should just pause on that for one second'cause it's an interesting concept and I've I've started to hear people talking about it a little bit. As far as I know, nobody has actually implemented this wherein you say that the concept here is We'll just keep with my example. I want to put a five hundred megawatt data center in a given location. The utility says I've got three hundred megawatts of capacity that is deliverable to that location.

But if you can get 200 megawatts of demand response or whatever the number is, you can get you can aggregate enough load that can shed itself within that deliverable zone. So there's like a geographic constraint to it.

then we'll count that as capacity. It'll be counted the same as if you had put a generator that's gonna just shave your peak on site at the data center, which I think is a I think is a good idea. There's a lot of nuance to it. Like getting capacity accreditation for demand response at that level is Nuanced and it's geographically constrained and all that. But

You have to understand the rules. And we are pretty close to doing that on a couple of projects. So we've been working, you know, really closely with Fultis and some others on this concept and working to convince utilities and grid operators of this approach. Um the first push pushback you get from especially vertically integrated utilities is well you know if I do a VPP then I'm not building anything, right? Like I want I want raping.

Um our counter argument to that is that if you can utilize that VPP as the bridging solution. you end up getting to connect that load sooner. You get that load for life. And you do get to ultimately build against that load long term. And if you you really help the utility see, this isn't about like, you know, not getting to build your integrating rate base. It's about meeting the customer need as quickly

as possible with the least amount of friction. So that's what I like about that approach. So it does take some work to get it, and you're right, no one's done it at a at any real scale yet. Um but I think we're gonna see it pretty soon. Okay, so I took us on a little bit of a tangent there, but you were talking about this sort of

various ways in which you can do the something reduces the interconnect limit that you require for the data center. A virtual power plant being one instantiation of that. Long duration battery and the transmission system being another instantiation of that, on site generation being a third, or on site storage, I suppose, for that matter. Right. Yeah, any of those could work. And so really that goes back to that orchestration question of like what is the right. Like type of resource.

w that could be orchestrated together to meet the resource adequate adequacy requirements for the interconnection. Um, and that could be any number of different things. And so the ideally you would want to have a tool where you could take any point of interconnection on the grid and any amount of load you wanted to pull off that grid and it would spit out.

Here's here's a stack of capacity, least cost to most cost, uh, that would meet that time duration that you're you're aiming for. Right. Like that's what the answer you want every time you you go to do a point of interview. Yeah, and in the ideal world that piece of magic software that does that thing is Used and trusted by both the utility and

That's right. Cause it's gotta be used to actually say yes b by the utility, by the grid operator. That stack is all accredited capacity. Check the box, you can connect at that load level. Right. I look forward to that day when that is possible. Me too. Me too. When you find that company that has nailed that perfectly, please let me know because we will be their first customer. Ja.

I think before we go, I mean, we talked about most of the different types of resources people are talking about putting behind the meter. We obviously talked a lot about natural gas. We talked about batteries to some extent. Um, what do you think about the sort of like on site wind solar combo stuff? You see some of this happening in like West Texas because there's space and good wind and solar resources. Yeah.

I I think you can do it to a certain degree and you definitely need a lot of space. So you take it like what uh what Intersect is doing, I suppose maybe the the best example. I've talked to Sheldon about this and Um I think it does require certain parameters of of space. Um and that's th you're not gonna be able to do that everywhere. So I do think that is going to meet

part of the demand in the market and and you're seeing some of these plans through these massive campuses. There's the one in Amarillo now that's being talked about as like 11 gigawatts and all these things. Yeah, I think that's the familiar one. So that one's interesting'cause it also includes the next technology I was gonna talk about, which is in theory it includes a bunch of st uh

Yeah, exactly. So I I mean that's that's great. And I I mean clearly there's demand for that. Um, but just like everything we're talking about, there's no like silver bullet. There's no like that's that's still going to be a relatively small percentage of the overall market. Um because we can't put everything in West Texas.

Right. We still are gonna have the the tendency to want to be closer to major metros where that sort of land availability is gonna be really challenging, especially when we start talking about, you know, gigawatt and multi-gigawatt scale. There just aren't that many sites that can do that.

Yeah. Well, okay. So just talking about nuclear for a second, because there have been Fermi is a good example. That's the company that was founded by Rick Perry, former Secretary of State, or sorry, Secretary of Energy and Governor of Texas. They went public in a or they're going public in a weird transaction right now. But yeah, they're trying to build this like mega, mega data center campus that.

that includes natural gas, but in the future will include nuclear. But it's they're not the only one. There have been a a few other announcements. Like, you know, I saw one of the nuclear micro reactor companies announced like a framework deal with a with a data center operator with a colo company. I know Oaklo's got some kind of partnership with Switch. Here's the thing. Let me I'll just jump ahead of this. As we've explained the logic of putting on site generation.

I don't know that any of it holds for new nuclear because you don't get the faster time to power. You're obviously not building that generation before you can get the interconnect, right? Like unless your interconnect is, I mean, you've talked about like a What was it, London or somewhere where 2038 exact time? Yes, exactly.

All right. So maybe in London, but most places you can get interconnected faster than you can build the new nuclear reactor. I I should say I'm bullish on nuclear in the US. I just I'm realistic about the timeline. Um so it's not a time to power thing. It's probably it's almost definitely not cheaper power, especially in the early days. And

You presumably are already gonna have your full grid interconnection for the full capacity of the data center by the time you get there. So I kind of don't understand the logic. It it is power dense. Like you can do it in theory where you don't have land, but I just kind of don't understand how it makes sense.

I I don't think there's a credible argument for behind the meter nuclear at a data center i in the near future. And by near future I mean the next Part part of the problem you're gonna have too is if you're talking about a brand new unit.

like a new type of generator unit. Like the availability questions are gonna be enormous, right? So you're gonna wanna see that thing operate for ten years before you say, I've got enough data to say I'm gonna plug in my twenty billion dollar, fifty billion dollar data center into that machine.

So it it's just hard to imagine that that is gonna have any type of uptake, even in the twenty thirties. Like I just don't see like and and I'm with you, like I I am bullish some form of new nuclear, you know, coming to market. We're just saying not on site. I mean that's the distinction I want to make here. Is like w we are going to and I think we should build a lot of new nuclear in the US. I just don't know why it needs to be co-located with data center.

I I I don't think it does. Because it doesn't solve all those problems that you're talking about. Like it's not meeting that sort of felt need of data centers today. Um and and maybe we're still in the same predicament in the mid twenty thirties. I don't think we will be. Um, but I agree. I I don't see that you're gonna have a huge uptake of that.

All right, Brian. Fun as always to talk to you about this stuff. I appreciate you doing it in front of a mic, and I'm sure we will have an excuse to do it again pretty soon. I hope so. It's always fun, Shell. Thanks a lot. Brian Janice is the co-founder of Cloverleaf Infrastructure. This show is a production of Latitude Media. You can head over to latitudmedia.com for links to today's topics. Latitude is supported by Prelude Ventures.

This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquon. Stephen Lacey is our executive editor. I'm Shail Khan, and this is Catalyst.