New Jersey Lifts Decades-Old Nuclear Ban to Solve Data Center Energy Crunch

Governor Mikie Sherrill signs legislation ending New Jersey’s de facto nuclear ban to meet skyrocketing energy demands from data center and AI developers.

By: AXL Media

Published: Apr 14, 2026, 9:09 AM EDT

Source: Bisnow

The Data Center Energy Mandate

The policy shift is primarily driven by the skyrocketing electricity demands of data centers and artificial intelligence programs. Tech giants including Microsoft, Meta, and Amazon have increasingly turned to nuclear energy as a reliable, carbon-free "baseload" power source. Recent industry precedents, such as Microsoft’s 2024 deal to reactivate Three Mile Island and Meta’s 2025 agreement with Constellation in Illinois, have highlighted nuclear power as the primary solution for the tech sector’s energy woes. New Jersey’s legislative change aims to capture this demand by allowing for the construction of on-site or dedicated power facilities for large-scale digital hubs.

Existing Infrastructure and Clean Energy Goals

Nuclear power is already the backbone of New Jersey’s carbon-free energy grid. The state's two active sites—the Salem Nuclear Power Plant and the Hope Creek Generating Station—currently generate approximately 40% of the state's total electricity and a staggering 80% of its pollution-free power. Proponents of the new bill argue that expanding this footprint is essential not only for meeting industrial demand but also for lowering consumer electricity rates, which have faced upward pressure due to the national energy supply crunch.

Emergence of Small Modular Reactors (SMRs)

The lifting of the ban specifically clears the way for "next-generation" nuclear technology, most notably Small Modular Reactors (SMRs). Unlike traditional massive plants, SMRs are more compact and can be deployed closer to high-demand areas like data center campuses. Amazon recently backed SMR developer X-energy, which filed for an initial public offering last month. Data center operators are increasingly viewing these smaller, factory-built reactors as a way to bypass grid congestion and ensure a dedicated, 24/7 power supply for AI training and inference.