US federal government converts decommissioned uranium enrichment plant in Kentucky to AI data center with dedicated gas power
The U.S. Department of Energy is leveraging the artificial intelligence boom to convert another Cold War-era uranium enrichment site, tapping private equity to fund a $100 billion data center complex that will include a new natural gas and battery storage power plant in Kentucky.
The department selected investment firm Brookfield Asset Management to develop and operate the data center at the government-owned Paducah Gaseous Diffusion Plant. In March, the department announced a similar project at its Portsmouth Gaseous Diffusion Plant in Ohio. Both sites are undergoing extensive cleanup, decontamination and decommissioning after decades of fueling the nation's nuclear weapons and power plants. The project aligns with the Trump administration's efforts to make artificial intelligence superiority over China a top national security and economic priority.
The federal government is transforming former DOE sites into "engines of innovation and economic growth" to "ensure the United States wins the A.I. race," Energy Secretary Chris Wright said in a statement. "There will be a lot of new natural gas power plants, a large data center, thousands of jobs and tens of billions of dollars of investment in rural western Kentucky," Wright added on Fox & Friends.
Earlier in July, the Department of Energy selected engineering contractor Amentum to negotiate a lease for an AI data center and on-site power plant at South Carolina's Savannah River Site, a massive complex where the federal government once produced materials for nuclear weapons, primarily tritium and plutonium-239.
Brookfield, a New York-headquartered investment firm with more than $1 trillion in assets under management, estimates that 30 percent of the $100 billion in spending would go toward constructing the data center and power components, with the remainder allocated to equipment including servers, routers and semiconductor chips. Discussions with commercial partners to use the data center space are ongoing.
Florida-based NextEra Energy, along with local utilities, are partners in the Paducah project. NextEra will build and own the power generation components, which include 2 gigawatts of natural gas-fired generation, transmission network upgrades and 2.6 gigawatts of battery energy storage to support a new 1.8 gigawatt AI data center campus. The plant would be Kentucky's largest gas-fired power plant; a single gigawatt can power approximately 750,000 homes according to industry standards. A power service agreement requires approval by state utility regulators, and excess electricity will be delivered to the regional grid. Construction is expected to be complete in 2031.
The roughly 3,550-acre Paducah site, which shut down in 2013, was among 16 federal sites released last year as potential locations for technology companies to build data management and storage capacity. The gaseous diffusion process used to enrich uranium is now considered obsolete. The department has projected cleanup costs of approximately $17 billion, with completion targeted for 2065. Work will include demolishing buildings, disassembling uranium converters, removing refrigerant and treating a large plume of groundwater contamination. Meanwhile, the department is developing plans to provide uranium waste stored at Paducah to companies seeking to re-enrich it for use in power plants using newer technologies.
The newly formed advocacy group Protect McCracken County has raised concerns about the uranium enrichment and data center projects, noting that work is occurring adjacent to a river from which 5 million people downstream draw drinking water without an independent impact study.
Byron Gary, a senior attorney for the Kentucky Resources Council, an environmental and public health advocacy organization, stated that any development of the contaminated Paducah site or water table withdrawal must be carefully executed. He noted that constructing such a large gas-fired power plant—which emits greenhouse gases—has climate change implications and that his organization must ensure regular ratepayers are not forced to subsidize the power plants and transmission upgrades. Gary also said his organization will verify that the Department of Energy does not circumvent permitting processes to avoid environmental protection laws. "There shouldn't be a justification to get around that and end up potentially dumping a lot more burden on a rural community that can't afford it," Gary said.