Google's agreement to purchase energy from advanced nuclear reactors to be built by Kairos Power was, in almost every way, earth-shattering.  This deal puts advanced nuclear on the energy "leaderboard" for the first time and sends an exceptionally powerful message out into the world—that the tech hyperscalers, a group of extremely sophisticated companies committed to decarbonization—are ready to commit large sums to obtain clean and reliable power from advanced nuclear energy providers. This will inform a whole host of other actors and force them to re-assess their energy options.

To better understand Google's reasoning for this agreement, we turn to the blog post written by Michael Terrell, Googles' Senior Director for Energy and Climate. He confirms right away, that Google's decision to sign the "world's first corporate agreement to purchase nuclear energy from multiple small modular reactors" is intended to "accelerate the clean energy transition across the U.S."

Google is building upon a history of pioneering corporate efforts to accelerate clean energy solutions, which started with agreements to purchase renewable electricity over a decade ago. Those purchase agreements have enabled Google to make claims of powering their operations with "renewable" energy but the reality is that for the last decade, Google's power was pulled from the grid like everyone else's and they could not access carbon-free power on a 24/7 basis. This disturbed them, because they knew that their claims were premised on fancy accounting, not reality, and due to the fungibility of electrons, their actual energy streams remained as dirty as eveyone else's.

Google now takes its first true step into truly managing its carbon emissions with this agreement to support Kairos Power's introduction of its advanced nuclear power system.  This is a long-term agreement that enables Kairos to target building multiple initial units by 2030, followed by additional units by 2035.  The agreement will enable the construction of up to 500 MW of 24/7 carbon-free power to a number of communities, which indicates that Google is probably planning to site these new reactors in more than one location, possibly co-located with newly-built data centers being planned to meet growing power demands from AI.

Terrell believes that this agreement, to put Google's purchasing heft in accelerating deployments of the next generation of advanced clean technologies, is important for two reasons:

1. The grid needs new electricity sources to support AI technologies that are powering major scientific advances, improving services for businesses and customers, and driving national competitiveness and economic growth. This agreement helps accelerate a new technology to meet energy needs cleanly and reliably, and unlock the full potential of AI for everyone.
2. Nuclear solutions offer a clean, round-the-clock power source that can help us reliably meet electricity demands with carbon-free energy every hour of every day. Advancing these power sources in close partnership with supportive local communities will rapidly drive the decarbonization of electricity grids around the world.

In other words, there is growing 24/7 energy demand and growing urgency to eliminate emissions and renewables are not up to the job. Terrell doesn't say that directly but it seems fairly clear that they recognize that they cannot run a rapidly growing 24/7 data center business with intermittent energy sources, even with fancy accounting.

While we don't get a lot of the financial details of this new agreement, whether they will be investing in Kairos or just helping to finance Kairos' journey through their first of a kind (F.O.A.K) build and out into their "nth of a kind" (N.O.A.K) build, Google's alignment of it efforts to develop and commercialize advanced clean electricity technologies behind Kairos is a formidable combination that promises to help Kairos overcome the remaining barriers for commercialization of its technology.

(From the DOE's Advanced Nuclear LiftOff Report.)

Google's deal with Kairos provides what many experts and the DOE see as a necessary ingredient to break the chicken and egg conundrum:  an “orderbook” of reactors. This speeds up Kairos' ability to produce its novel reactors in the quantity necessary to lower costs and bring Kairos Power’s technology to market more quickly. Without out, FOAK pricing can be prohibitive to getting orders. Google, with virtually no other options, has bravely stepped to help scale what is likely to be the first of many advanced nuclear technologies coming to market.

This announcement further inflects the advanced nuclear sector and confirms what we have known all along: both traditional and next-generation nuclear technologies are necessary for us to reach 100% clean power and we'll need a very large and very diverse quantity of new reactors being produced and deployed at scale to fully meet all types of growing energy needs and to shift all demand from fossil fuels to clean energy sources.

Resources
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Goggle Blog: New nuclear clean energy agreement with Kairos Power, by Michael Terrell, Oct. 14, 2024

Google Sustainability Report: The Corporate Role in Accelerating Advanced Clean Electricity Technologies, Sept. 2023.

Department of Energy:  Pathways to Commercial Liftoff: Advanced Nuclear Commercial LiftOff