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Power is acknowledged as the limiting factor for the rollout of AI data centres around the world. The megawatt power demands mean the rollout is being slowed by connections to local electricity grids, often with years of delays. As a result, alternative technologies, from fuel cells to a new generation of small nuclear reactors, are now being used to provide local power. This can eliminate the need for a grid connection or provide additional power once the data centre is connected to the grid.

One of the biggest challenges for data centre power is that AI workloads have extreme variability in their power demands. A single server’s power load might fluctuate from 15kW to 30kW within seconds, scaling up to 50–100MW swings at the data centre level. That could mean going from 20% of provisioned power to 150%, and traditional grid infrastructure cannot handle that kind of swing. With the next generation of AI racks consuming up to 120kW of power, that is a major issue.

More than 11,728 data centres are mapped around the world, with 33 higher performance AI data centres operational in the US, 67 under construction and 33 more planned.

Solid oxide fuel cells

All of this is putting energy supply under scrutiny. One of the key technologies for immediate use is solid oxide fuel cells. Bloom Energy in the US has seen its share price almost double in the last year on the opportunity, while Ceres Power has been signing key deals with Delta Electronics and Doosan Fuel Cell to support data centres.

• UK solid oxide fuel cell power technology for AI data centres
• Hydrogen power and cooling for off grid data centres

“Fuel cells and supercapacitors can easily handle this kind of load profile,” said Kaushal Biligiri in the energy transition team at solid oxide fuel cell developer Bloom Energy, noting that this combination can provide instantaneous responses to load changes, achieving 200,000+ charge cycles while maintaining 99.9% availability.

The delays connecting data centres to the grid are pushing the development of islanded microgrids with their own control systems.

“Every utility requires an interconnection agreement before it can accept a distributed energy resource onto its network. And that takes time,” said Biligiri. In the meantime, onsite fuel cells from Bloom Energy can operate as islanded microgrids. This means power generation is completely off-grid, with fuel cells sitting next to the data centre generating power 24/7 and load-following the data centre’s needs.

After the data centre operator reaches an interconnection agreement with the utility, this microgrid can be connected to the utility’s grid. The fuel cells can then provide supplemental power to the grid, increasing reliability and capacity for the entire region.

Because solid oxide fuel cells (SOFCs) generate heat, it’s possible to capture that heat and use it. By combining heat and power applications, fuel cell efficiency rises from 54% to over 90%.

Ceres Power in the UK is supplying SOFC technology to Delta Electronics in Taiwan and Doosan in Korea to support data centres. “Fuel cells are gaining attention as an optimal alternative to various power demands triggered by AI, including data centres,” said Phil Caldwell, Chief Executive Officer of Ceres, which has seen its share price rise by a factor of five this year.

A deal between power operator Centrica and Delta will supply data centres and other energy-intensive industries as demand outstrips grid capacity. Production is planned for the end of 2026.

The plan is to establish a demonstration site in the UK within the next year, with a medium-term goal of delivering MW-scale systems within the next three to five years.

“Businesses across the UK and Europe need more power, and they need it faster than the electricity grids can deliver. This partnership brings together Centrica’s energy expertise, Delta’s manufacturing and cutting‑edge fuel cell technology to meet this growing energy demand with fast, reliable off‑grid power at scale,” said Chris O’Shea, CEO of Centrica.

Delta is showing its Data Centre Microgrid Solution at the Smarter E Europe exhibition in Munich this week. Delta has combined renewables, batteries, fuel cells, generators (gensets), and other energy sources to ensure reliable and stable power delivery during grid connection delays or off-grid scenarios, while also mitigating AI workload fluctuations. The integration is designed to meet the stringent reliability demands of critical infrastructure with substation-grade modelling, a real-time microgrid controller, and a resilient multi-bay architecture.

The SOFC directly converts natural gas, ammonia or hydrogen into electricity and thermal energy through a high-temperature electrochemical process. With heat recovery, it can offer up to 85% energy efficiency to fully support data centres with AC or DC output, a modular design, high reliability and an easy-to-design decentralised microgrid.

This is combined with Delta’s C-Series, a highly scalable energy storage system ranging from 125kW / 261kWh to 1.25MW / 2.61MWh. A Power Conversion System (PCS) is integrated with liquid-cooling technology and high-performance battery packs.

Doosan is also using technology from Ceres and started mass production of fuel cell stacks last year at a dedicated factory in South Korea with the ability to produce a combined generation capacity of 50MW of electrical power each year for local customers.

Doosan is the first of Ceres’ strategic licensing partners to enter mass production using its technology. The fuel cells, stacks and power systems that Doosan Fuel Cell produces will initially be marketed to customers in South Korea, particularly for AI data centres.

“In South Korea, the world’s leading fuel cell market, we aim to lead the adoption of advanced SOFCs by leveraging our collaboration with Ceres,” said Doosoon Lee, CEO of Doosan Fuel Cell. “By commercialising these technologies and promoting their domestic production, we intend to spearhead the acceleration of the global transition to a decarbonised society through eco-friendly energy solutions in the commercial power market and maritime mobility.”

As data centres grow, land use also becomes a significant factor. This is especially important in urban or suburban locations. Fuel cells offer high power density, can be stacked in layers and are extremely quiet, operating at 65 decibels from 10 feet away. “You can stand next to a fuel cell while it’s generating power and have a conversation without any noise issues,” said Biligiri.

Bloom Energy is already supplying over 400MW of power generation to data centres worldwide, including Equinix, Oracle and American Electric Power.

But the technology has previously had several false starts. Bosch signed a deal with Ceres in 2019 and demonstrated the technology for data centres, but in 2025 pulled out of the market.

Microsoft also tested hydrogen fuel cell technology at its datacentre in Ireland in 2024 in a deal with ESB. This was the first time fuel cells were used to provide electricity to a Microsoft data centre in Europe, supplying up to 250kW of clean energy to the Dublin campus over an eight-week period.

“The green hydrogen project we’re launching with ESB is a pioneering first for Microsoft in Europe, demonstrating how zero-emissions hydrogen can be harnessed to power our digital lives. If scaled successfully, it could provide new ways of advancing sustainability in our sector and beyond,” said Eoin Doherty, Vice President, EMEA Regional Leader, Microsoft Cloud Operations + Innovation.

Small nuclear reactors

Another power source is the revival of nuclear fission reactors, some connected to the grid and others directly supplying AI data centres.

Rolls-Royce in the UK already makes reactors for nuclear submarines and so has the engineering expertise, control electronics expertise and supply chain in place. It is installing a Small Modular Reactor (SMR) in an old power station at Wylfa in Wales to deliver power to the grid.

The scaled-down High Temperature Gas Reactor will deliver a modular system with a control system from Yokogawa. The factory-built reactor is easily transportable and will provide continuous electrical or thermal energy. Each generator has a power output of up to 25MW and can be combined in multi-unit microgrids.

Yokogawa will supply design engineering, validation and qualification, product hardware, building and testing the system, installation and commissioning and support work in the Czech Republic and Netherlands. As well as working with Great British Energy – Nuclear (GBE‑N), Rolls Royce is working with European utility ČEZ to build up to three gigawatts of SMR power plants in the Czech Republic and is one of only two companies to reach the final stage in Vattenfall’s process to identify Sweden’s nuclear technology partner.

• Exploring the Rolls Royce SMR reactor

“This is a critical milestone for Rolls-Royce SMR, for Rolls-Royce and for the UK as the Government looks to realise its ambition of a ‘golden age’ of new nuclear. It is a vote of confidence in our unique nuclear capabilities and further evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering. It also provides crucial contractual certainty in our domestic market that will unlock the opportunity to deploy a global fleet of Rolls-Royce SMRs,” said Tufan Erginbilgic, CEO of Rolls-Royce.

“Rolls-Royce SMR now has multiple commitments in Europe and is well placed to become a market leader globally. As activity ramps up in the UK and in the Czech Republic, these projects are already generating returns,” he added.

Elsewhere in the UK, energy company EDF is working with Holtec International to install an SMR at the derelict site of the former Cottam power station as part of an £11 billion redevelopment.

The Cottam project aims to provide 24/7 clean power for data centres at the site with a reactor built in the US.

“Together with EDF and Tritax, we will help the UK seize a leadership position in both advanced nuclear deployment and the global AI race,” said Dr Rick Springman, president of Global Clean Energy Opportunities, Holtec.

“The SMR-300s at Cottam represent a potential $15bn project, creating thousands of local jobs while drawing on the lessons from our Palisades project in Michigan. With this second-of-a-kind deployment, the UK is well positioned to join a global coalition of countries adopting the SMR-300 to drive long-term economic growth.”

Even smaller reactors

But even smaller reactors are being developed by startups to sit directly alongside AI data centres. The World Nuclear Association is tracking the rollout of SMRs globally, with just two in operation, in China and Russia, and four under construction. Many more are in the planning process and seeking investment.

SMR designs can be categorised by their different reactor technologies, with three of the most promising concepts being High-Temperature Gas-Cooled Reactors (HTGRs), Liquid Metal Fast Reactors (LMFRs), and Molten Salt Reactors (MSRs). Google, Amazon and Meta have each made major commitments with SMR startups, each developing a different type of reactor technology: Google with MSR startup Kairos Power, Amazon with HTGR developer X-Energy, and Meta with two different LMFR startups, Oklo and TerraPower, says Noah El Alami, analyst at IDTechEx.

There are other opportunities. For example, the University of Utah’s TRIGA nuclear reactor will produce electricity for the first time in its 50-year history to power a mini AI data centre. This is an important proof of concept for full-scale data centres, according to TRIGA.

“This project is intended to demonstrate a powerful principle,” said Mike Luther, Founder of Elemental Nuclear. “The energy produced through nuclear fission can ultimately power the computational systems driving artificial intelligence.”

“This will be, to our knowledge, the first time any university reactor has produced electricity, not just our own,” said reactor manager Dr Ted Goodell. “It’s a milestone for our students, but it also shows that small, safe reactors could live at data centres, rather than in labs.”

“This experiment represents an important step in demonstrating how compact nuclear systems can be paired with advanced power conversion technologies to support emerging energy demands,” said David Blythe, Co-Founder and CEO of Elemental Nuclear.

Elemental Nuclear is developing a new class of nuclear microreactors for computing infrastructure. “Our objective is to deliver a commercially viable nuclear microreactor by 2030–2031,” said Luther. “Experiments like this enable us to move quickly, validate real-world systems, and build toward scalable solutions.”

Five SMR startups are actively signing deals to scale technologies for AI data centres.

Oklo, which is chaired by Sam Altman, CEO of OpenAI, signed a letter of intent with Wyoming Hyperscale back in 2024 to supply 100 megawatts (MW) of power to its data centres. The Aurora Powerhouse is a fast-neutron reactor that uses liquid sodium metal and uranium that can be sourced from recycled nuclear waste. It operates without moving parts inside the reactor core, relying on natural physics for cooling and safety, and is designed to produce 15MW to 50MW of both electricity and useful industrial heat.

X-energy signed a deal with Amazon to deploy its SMRs in Washington State to provide 500MW of power. The Xe-100 High-Temperature Gas-Cooled Reactor (HTGR) is cooled by helium gas rather than water and produces high-temperature steam at 565°C, so it can be used for both electricity and high-density data centre cooling systems.

Kairos Power is working with Google to bring a commercial reactor online by 2030 and scale up to 500MW for data centres. This uses a Fluoride Salt-Cooled High-Temperature Reactor (KP-FHR). Because the liquid salt absorbs massive amounts of heat at low pressure without boiling, the system eliminates the need for massive, high-pressure containment structures. This allows for a much smaller, cheaper and inherently safer factory-built footprint.

Last Energy is aiming to put four 20MW reactors in an old power station in South Wales, UK, as well as ten 20MW reactors for Legnicka Specjalna Strefa Ekonomiczna in southern Poland. The Pressurised Water Reactors (PWRs) are built entirely out of prefabricated, modular cubes that can be assembled on site in a matter of months rather than years. It is also building a research reactor at Texas A&M University.

“As the first micronuclear developer to complete a Preliminary Design Review, we applaud the UK’s nuclear regulators for establishing a clear, flexible and direct regulatory pathway for micro-nuclear technologies to engage in nuclear licensing and environmental permitting,” said Michael Jenner, CEO of Last Energy UK. “Unlocking nuclear power at scale is essential to decarbonising the industrial economy and driving economic growth across the UK. Completing our PDR has provided essential guidance to efficiently undertake and complete licensing processes, positioning Last Energy to deliver the UK’s first commercial microreactor.”

TerraPower has broken ground on a commercial demonstration plant in Wyoming and is actively discussing co-location frameworks with data centre developers. The Natrium Sodium-Cooled Fast Reactor (SFR) was developed in partnership with GE Hitachi. Because liquid sodium can operate at incredibly high temperatures under atmospheric pressure, it extracts heat far more efficiently than water. Crucially for data centres with fluctuating AI training workloads, the Natrium system integrates a molten salt energy storage system, allowing the reactor to boost its nominal 345MW output up to 500MW for several hours to handle peak computing demands.

However, this will take several years, says El Alami at IDTechEx.

“Even the most prolific SMR startups anticipate that it will take until around 2030 for their first fully functional SMR to start supplying electricity. Even if delays are avoided, note that these goals represent the first-of-a-kind deployment. A larger rollout to get to gigawatts of power will take at least a few more years,” he said.

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