Peter Dutton is losing the debate over nuclear power. Even the pro-nuclearFinancial Reviewagrees, which ran aneditorial last weekwondering where the Coalition’s details were. And the Coalition’s proposal for the government to own the nuclear industry has made it look more like election boondoggle than visionary economic reform.It is starting to look like a big missed opportunity.Because in 2024, the question facing Australian governments is not only how to transition from polluting energy sources to non-polluting sources. It is also how to set up an economic and regulatory framework to service what is likely to be massive growth in electricity demand over the next decade.Related Article Block PlaceholderArticle ID: 1176677‘Wrong on every point’: Crikey readers dissect Dutton’s nuclear proposalCrikey ReadersThe electrification revolution is part of that demand, with, for instance, the growing adoption of electric vehicles. But the real shadow on the horizon is artificial intelligence. The entire global economy is embedding powerful, power-hungry AI systems into every platform and every device. To the best of our knowledge, the current generation of AI follows a simple scaling law: the more data and the more powerful the computers processing that data, the better the AI.We should be excited for AI. It is the first significant and positive productivity shock we’ve had in decades. But the industry needs more compute, and more compute needs more energy.That’s whyMicrosoft is working to reopen Three Mile Island— yes, thatThree Mile Island— and has committed to purchasing all the electricity from the revived reactor to supply its AI and data infrastructure needs. Oracle plans to use three small nuclear reactors to power amassive new data centre. Amazon Web Services is buying and plans to significantly grow a data centrenext to a nuclear plant in Pennsylvania.Then there’s OpenAI.The New York Timesreports that one of thebig hurdles for OpenAI in opening US data centresis a lack of adequate electricity supply. The company is reportedly planning to buildhalf a dozen data centresthat wouldeachconsume as much electricity as the entire city of Miami. It is no coincidence that OpenAI chief Sam Altman has alsoinvestedin nuclear startups.One estimate suggests that data centres could consume9% of US electricity by 2030.Dutton, to his credit, appears to understand this. His speech to the Committee for Economic Development of Australia (CEDA)last weeknoted that nuclear would help “accommodate energy intensive data centres and greater use of AI”.But the Coalition’s mistake has been to present nuclear (alongside a mixture of renewables) as the one big hairy audacious plan to solve our energy challenge. They’ve even selected the sites! Weird to do that before you’ve even figured out how to pay for the whole thing.Nuclear is not a panacea. It is only appealing if it makes economic sense. Our productivity ambitions demand that energy is abundant, available and cheap. There has been fantastic progress in solar technology, for instance. But it makes no sense to eliminate nuclear as an option for the future. When the Howard government banned nuclear power generation in 1998, it accidentally excluded us from competing in the global AI data centre gold rush 26 years later.Related Article Block PlaceholderArticle ID: 1177013Who gives a stuff about the surplus?Rachel WithersLegalising nuclear power in a way that makes it cost effective is the sort of generational economic reform Australian politicians have been seeking for decades. I sayin a way that makes it cost effectivebecause it is theregulatorysuperstructurelaid on top of nuclear energy globally that accounts for many of the claims that nuclear is uneconomic relative to other renewable energy sources.A Dutton government would have to not only amend the two pieces of legislation that specifically exclude nuclear power plants from being approved, but also establish dedicated regulatory commissions and frameworks and licencing schemes to govern the new industry — and in a way that encouraged nuclear power to be developed, not blocked. And all of this would have to be pushed through a presumably sceptical Parliament.That would be a lot of work, and it would take time. But I’ve been hearing that nuclear power is “at least 10 to 20 years away” for the past two decades. Allowing (not imposing) nuclear as an option in Australia’s energy mix would be our first reckoning with the demands of the digital economy.Should we be utilising nuclear energy to better harness AI?Let us know your thoughts by writing toletters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.