A Major Milestone for the Nuclear Industry
The General Services Administration (GSA), which is responsible for managing government buildings, has announced a significant nuclear energy contract. This announcement comes on the heels of several major tech companies making notable nuclear energy deals last year.
The Details of the Contract
- Duration: 10 years
- Value: $840 million
- Electricity supply: 10 million megawatt-hours, equivalent to powering more than 1 million homes annually
- Recipient: Constellation, which operates the nation’s largest nuclear fleet and recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island
The Importance of Nuclear Energy in the Contract
According to Constellation spokesperson Paul Adams, nuclear energy makes up approximately 4 million megawatt-hours of the contract.
Silicon Valley’s Increasing Interest in Nuclear Energy
Silicon Valley is increasingly turning to nuclear energy to meet growing electricity demand from AI data centers. As the nation’s single largest energy consumer, the federal government has joined major corporate clean energy buyers in supporting new nuclear energy capacity and ensuring a reliable supply of clean energy for everyone.
Quotes from Key Figures
- "This agreement is another powerful example of how things have changed. Frustratingly…nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore." – Joe Dominguez, Constellation president and CEO
- "The United States government joins Microsoft and other entities to support continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets." – Joe Dominguez, Constellation president and CEO
Constellation’s Commitment to Carbon-Free 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. The company has set a goal of reaching 100 percent carbon-free electricity by 2040, compared to close to 90 percent today.
Questions and Answers
- How much of the electricity included in the contract will come from each source aside from nuclear power plants? Constellation and the GSA declined to answer questions about this.
- What are the implications of this contract for the federal government’s energy needs? The contract will allow Constellation to extend licenses for existing nuclear power plants, invest in new equipment and technology that should result in 135 megawatts of additional capacity.
Why This Contract Matters
This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. It demonstrates how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone.
The Scope of the Contract
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 that added capacity over 10 years.
The Impact on Other Agencies
The contract 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 US Mint.
The Role of Data Centers in Driving Up Electricity Demand
Data centers drive up electricity demand and increase competition for limited clean energy sources. This contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years.
Previous Nuclear Energy Deals
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.
The Biden Administration’s Plan for Nuclear 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
This historic procurement contract is a major boon to the nuclear industry and demonstrates how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable supply of clean energy for everyone.
