The General Services Administration (GSA), which manages government buildings, just announced a major nuclear power contract. The announcement comes on the heels of several big tech companies making a series of nuclear energy deals last year.
The 10-year, $840 million contract is for 10 million megawatt-hours of electricity, which the GSA says is the equivalent of what is needed for more than 1 million homes a year. The agency awarded the contract to Constellation, which operates the country's largest nuclear fleet, and recently announced a deal with Microsoft to restart a nuclear reactor at Three Mile Island. Nuclear power makes up a significant portion of the GSA deal, about 4 million megawatt-hours, according to Constellation spokesman Paul Adams..
Silicon Valley is increasingly turning to nuclear power to meet the growing electricity demand of ai data centers. The federal government is the largest consumer of energy in the country, making this contract a boon for the nuclear industry.
“This deal is another powerful example of how things have changed.”
“It's frustrating…that nuclear power was excluded from many corporate and government sustainable energy purchases. Not anymore. “This deal is another powerful example of how things have changed,” said Joe Dominguez, president and CEO of Constellation, in a Press release. “The U.S. government joins Microsoft and others in supporting continued investment in reliable nuclear power that will enable Constellation to relicense and extend the life of these critical assets.”
Constellation says it generates 10 percent of the country's carbon pollution-free energy. TO Most of its production is nuclear energy.but it also produces hydraulic, wind and solar energy. It also generates electricity from gas-fired power plants, although the company has set a goal of reaching 100 percent carbon-free electricity by 2040, up from around 90 percent today.
Constellation and GSA declined to answer questions about how much electricity included in the contract will come from each source other than nuclear plants.. Altogether, this is the largest power procurement contract GSA has signed in its history.
“This historic acquisition ensures a reliable and cost-competitive supply of nuclear energy,” GSA Administrator Robin Carnahan said in a Press release. “We are demonstrating how the federal government can join with major corporate buyers of clean energy to stimulate new nuclear power capacity and ensure a reliable, affordable supply of clean energy for all.”
The contract will allow Constellation to expand 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 that additional capacity over 10 years. Outside of GSA buildings, the agreement also extends to 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 United States Mint.
He GSA is framing the contract as a way to set more affordable prices as data centers increase demand for electricity and increase competition for limited sources of clean energy:
With uncertainty about future electricity prices and growing demand for electricity from data centers and artificial intelligence facilities, for example, this contract provides federal agencies with budget stability and protection against future price increases by holding fixed its electricity costs for 10 years, while continuing to bolster the domestic nuclear industry.
Google, Meta, amazon and Microsoft have signed eye-catching 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 power accident in American history.
The Biden administration has also made nuclear energy a key part of its plan for the United States to abandon fossil fuels and adopt energy sources that do not cause climate change. Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear power plant in Covert Township, Michigan. And while President-elect Donald Trump plans to undo progress made toward clean energy, Trump's campaign agenda included efforts to “support nuclear energy production.”
