Data centers may hold key to future nuclear energy in Illinois

Power-thirsty data centers and other emerging industrial facilities could be a lifeline for Illinois nuclear power plants facing state and federal policy uncertainties.

Illinois is the most nuclear-heavy state in the country, with 11 reactors across six plants, providing about 54% of the state's power. Illinois supports its nuclear fleet through two separate statutory provisions: the state's Zero Emissions Standard and the Carbon Mitigation Credit process, which support five of the six nuclear plants in Illinois. Those policies are scheduled to sunset in mid-2027.

The Illinois legislature could potentially extend both programs past 2027, but it is too early to say when and if lawmakers will take action, Brian Granahan, director of the Illinois Power Agency, told Platts in a Feb. 24 email.

The state's policies are supplemented by the federal production tax credit, which in its current form will sunset in 2032. Congress is considering potentially sweeping changes to federal energy tax credits under the 2022 Inflation Reduction Act, adding to the uncertainty.

Such policy risks are putting pressure on nuclear power plant owners to seek new sources of financial support, with data centers emerging as leading candidates, industry representatives said at a recent Illinois Commerce Commission meeting that considered the state's grid reliability needs and prospects for colocating data centers at nuclear facilities.

"There is an environmental benefit in continuing to operate these plants, which is what led to the conversations around preserving the plants when market revenues were insufficient to do that," Mason Emnett, senior vice president of public policy at Constellation Energy Corp., said during the Feb. 20 meeting.

Constellation owns the state's six nuclear plants.

Illinois has long lacked load growth, Emnett said, noting that the state is a net exporter of power into the nation's largest organized wholesale power market, operated by the PJM Interconnection LLC. But that tide is turning with growing demand from data centers, which could provide the necessary financial stability Constellation needs to keep its nuclear fleet running in Illinois, Emnett added.

Eyeing colocation deals

Constellation has had success finding new interest in its nuclear assets. In September 2024, it unveiled a landmark offtake deal with Microsoft Corp., allowing the utility to restart its Three Mile Island in Pennsylvania, Emnett noted.

The Three Mile Island agreement is not a colocation deal, but Constellation is pursuing such opportunities despite the Federal Energy Regulatory Commission's rejection of an amended interconnection service agreement between PPL Corp. and Talen Energy Corp. to provide power from Talen's Susquehanna Nuclear plant, also in Pennsylvania, to an adjacent data center campus of Amazon.com Inc. subsidiary Amazon Web Services Inc.

FERC on Feb. 20 opened a proceeding on colocation for data centers and other large loads in PJM, which came after Constellation filed a complaint over the federal regulator's rejection of the PPL and Talen deal.

Unlike Pennsylvania, Illinois does not have a nuclear reactor to restart, although there are other ways Constellation can expand its existing fleet, Emnett said, including through the construction of new nuclear plants or, in the near term, with upgrades and life extensions.

"We can upgrade those facilities," Emnett said, pointing to 400 MW of total upgrade potential across the company's Illinois fleet. "We can get more output from the existing footprint."

Three of Constellation's six plants are already in the relicensing process, enabling the plants to continue to operate for another 20 years.

"Very large data centers, they are the ones coming to us and other nuclear operators to talk about how we can support their operations," Emnett said.

Exelon Corp.'s operating companies, such as Commonwealth Edison Co.. in Chicago, are also seeing an explosion of data center growth, David Weaver, Exelon's vice president of transmission strategy, told regulators.

"We're looking and working and developing new tools to try to facilitate interconnecting these large loads and also as an industry trying to understand the reliability impacts of these loads," Weaver said.

Data centers drive demand surge

Colocation may give large loads a faster path to power than traditional grid interconnections, added Jason Connell, vice president of planning at PJM Interconnection. With colocation, the generation owner constructs interconnection facilities sufficient to accommodate load without the need to build new facilities, reducing the scope of engineering and construction.

PJM load forecasts for 2025 increased by 16,000 MW from the 2024 load forecast, driven largely by new datacenters, Connell said. The grid operator has a large backlog of 50,000 MW of generation that has cleared the interconnection study process, but it is progressing slowly in getting that generation online, Connell said.

About 5,000 MW of the 50,000 MW is in Illinois, which could help to serve new load coming online, Connell said. However, Connell flagged concerns about the slow pace of new additions.

"We continue to put less than 10% of that number in service over the past several years," Connell said. "Last year, for the first time, we had no natural gas or traditional generation come in service in the PJM territory. It was all renewable generation."

New resources in the Midcontinent ISO service territory are also not coming online fast enough, added Aubrey Johnson, MISO's vice president of system planning.

"Fundamentally, I think our efforts really have to be on how we accelerate and building the transmission necessary to serve those loads and the generation as well," Johnson said.

There are over 57 GW of signed generation interconnection agreements within MISO, 32 GW of which are delayed beyond the planned commercial operation date, Johnson said.