The global demand for electricity is skyrocketing, driven in large part by the insatiable energy needs of artificial intelligence and data centers. This has sparked a scramble among tech companies and energy producers to secure reliable, scalable power sources for 2035 and beyond. The current frontrunners? Natural gas, advanced nuclear fission (small modular reactors or SMRs), experimental nuclear fusion, and increasingly cost-effective renewable energy paired with large-scale battery storage.
The Fragility of Natural Gas
For decades, natural gas has been the default choice for baseload power – the constant, dependable energy supply needed to keep grids running 24/7. It’s relatively cheap, abundant, and well-established. However, recent geopolitical events, such as drone strikes disrupting Qatari gas infrastructure, have exposed the vulnerability of relying on a single, centralized fuel source.
Moreover, soaring demand has created unprecedented bottlenecks in the supply chain. Turbine manufacturers are backlogged for years, meaning orders placed today won’t be fulfilled until the early 2030s. This delay poses a critical risk not only to tech firms desperate for power but also to the natural gas industry itself, as alternatives mature.
The Nuclear Resurgence: Fission and Fusion
While gas faces hurdles, both fission and fusion are poised to challenge its dominance. Small Modular Reactors (SMRs) offer a faster path to deployment, leveraging decades of existing nuclear fission technology. Companies like Kairos Power and Oklo are already building demonstration plants, with some targeting commercial operations by the late 2020s. Google, Amazon, and Meta have either invested in or signed deals for power from these emerging reactors.
The more ambitious option is nuclear fusion, which promises nearly limitless, clean energy using seawater as fuel. Commonwealth Fusion Systems plans to activate its demonstration reactor next year, while Helion, backed by Sam Altman, aims to supply Microsoft with commercial fusion power as early as 2028. If successful, Helion’s aggressive expansion plans – building thousands of reactors by 2035 – could dramatically reshape the energy market.
The Price Problem and the Rise of Renewables
The biggest obstacle for all these technologies is cost. Nuclear power remains expensive, with SMRs currently around $170 per megawatt-hour and fusion potentially starting at $150. Natural gas, while cheaper at $107/MWh, is also facing rising prices.
This is where renewables – wind, solar, and long-duration batteries – are gaining traction. The cost of wind and solar has plummeted over the past decade, and battery storage has followed suit. Paired together, they now offer a competitive price range of $50 to $130/MWh, overlapping with nuclear and gas.
Innovations in battery technology, such as iron-air batteries from Form Energy and organic fluid storage from XL Batteries, promise to further reduce costs and eliminate reliance on critical minerals. These developments may soon make renewables the most economically viable option for baseload power.
The energy landscape is shifting rapidly. The race to power the future grid is wide open, and the winner will depend on innovation, scalability, and the ability to deliver reliable, affordable energy in a volatile world.
