US Government Announces Historic Nuclear Energy Deal

The General Services Administration (GSA) has made a groundbreaking announcement regarding a major nuclear energy contract. This news comes on the heels of several big tech companies making significant strides in nuclear energy deals last year. The 10-year, $840 million contract is for 10 million megawatt-hours of electricity, which is equivalent to what’s needed for more than 1 million homes annually.

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Contract Details

The GSA awarded the contract to Constellation, which operates the nation’s largest nuclear fleet and has recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island. Nuclear energy makes up approximately 4 million megawatt-hours of the deal, according to Constellation spokesperson Paul Adams.

Nuclear Energy on the Rise

Silicon Valley is increasingly turning to nuclear energy to satisfy electricity demand from AI data centers. The federal government is the nation’s single largest energy consumer, making this contract a significant boon to the nuclear industry.

"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO, in a press release. "Frustratingly… nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore. This agreement is another powerful example of how things have changed."

Constellation’s Commitment to Nuclear Energy

Constellation generates 10 percent of the nation’s carbon pollution-free energy. A majority of its output is nuclear energy, but it also produces hydro, wind, and solar power. Additionally, the company generates electricity from gas-fired power plants; however, Constellation has set a goal of reaching 100 percent carbon-free electricity by 2040, compared to close to 90 percent today.

Contract Benefits

The contract will allow Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology that should result in 135 megawatts of additional capacity. The GSA agreed to purchase 2.4 million megawatt-hours of electricity from the added capacity over 10 years.

Government Support for Nuclear Energy

The contract will benefit not only the GSA but also 13 other agencies, including the departments of Veterans Affairs and Transportation as well as the Federal Bureau of Prisons, the National Park Service, the Social Security Administration, and the US Mint. The GSA is framing the contract as a way to lock in more affordable prices as data centers drive up electricity demand and increase competition for limited clean energy sources.

Benefits of the Contract

In the face of uncertainty over future electricity prices and increasing electricity demand from data centers and AI facilities, this contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years. The contract also bolsters the domestic nuclear industry.

Big Tech’s Interest in Nuclear Energy

Google, Meta, Amazon, and Microsoft have all inked splashy nuclear energy deals over the past year. In September of last year, Microsoft and Constellation announced a plan to restart a shuttered reactor at Three Mile Island in Pennsylvania, the site of the worst nuclear energy accident in US history.

Government Support for Clean Energy

The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels to energy sources that don’t cause climate change. Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan.

Conclusion

The GSA’s announcement marks a significant milestone for the nuclear industry and demonstrates the government’s commitment to clean energy. As the demand for electricity continues to rise, the need for reliable and affordable sources of energy becomes increasingly important. This contract will provide federal agencies with budgetary stability and support the domestic nuclear industry.

References

GSA Press Release: "GSA Announces Historic Nuclear Energy Contract"
Constellation Press Release: "Constellation Secures Largest Ever Federal Government Energy Procurement Contract"
Department of Energy Press Release: "$1.52 Billion Loan to Help Restart Retired Nuclear Generating Station"

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