The General Services Administration (GSA), responsible for managing government buildings, has recently announced a significant nuclear energy contract. This announcement follows a series of notable nuclear energy deals made by big tech companies last year.
Contract Details
The 10-year, $840 million contract is for the procurement of 10 million megawatt-hours of electricity, which is equivalent to meeting the annual needs of more than 1 million homes. The GSA has awarded this contract to Constellation, the operator of the nation’s largest nuclear fleet, and a recent partner with Microsoft in restarting a nuclear reactor at Three Mile Island.
Nuclear Energy’s Significance
According to Constellation spokesperson Paul Adams, nuclear energy constitutes about 4 million megawatt-hours of the deal. Silicon Valley is increasingly turning towards nuclear energy to satiate electricity demands from AI data centers. The federal government, being the nation’s single largest energy consumer, makes this contract a significant boon to the nuclear industry.
Quotes and Statements
- "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. This agreement is another powerful example of how things have changed," said 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."
- "This historic procurement locks in a cost-competitive, reliable supply of nuclear energy," said GSA administrator Robin Carnahan. "We’re demonstrating 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."
Constellation’s Background
- Constellation generates 10 percent of the nation’s carbon pollution-free energy.
- The majority of its output is from nuclear energy, but it also produces hydro, wind, and solar power. It also generates electricity from gas-fired power plants.
- The company has set a goal of reaching 100 percent carbon-free electricity by 2040 compared to close to 90 percent today.
Contract Impact
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.
Other Agencies Involved
- Outside of GSA buildings, the deal also extends to 13 other agencies, including:
- Departments of Veterans Affairs and Transportation
- Federal Bureau of Prisons
- National Park Service
- Social Security Administration
- US Mint
Significance in Context
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:
- "In the face of uncertainty over future electricity prices and increasing electricity demand from data centers and AI facilities, for instance, this contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years, while also continuing to bolster the domestic nuclear industry."
Industry Trends
- Google, Meta, Amazon, and Microsoft have all inked notable 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 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.
- The Trump campaign agenda included efforts to ‘support nuclear energy production.’