A Major Milestone for the Nuclear Industry
The General Services Administration (GSA), responsible for managing government buildings, has announced a significant nuclear energy contract. This development comes on the heels of several major tech companies making substantial nuclear energy deals last year.
Contract Details
- 10-year agreement: The GSA has signed a 10-year contract worth $840 million.
- Electricity supply: The contract includes 10 million megawatt-hours (MWh) of electricity, which is equivalent to the needs of over 1 million homes annually.
- Breakdown by source: Nuclear energy constitutes approximately 4 million MWh of the total, according to Constellation spokesperson Paul Adams.
Why This Contract Matters
Silicon Valley’s increasing reliance on nuclear energy to meet electricity demands from AI data centers is driving growth in this sector. The federal government, as the nation’s largest energy consumer, plays a crucial role in promoting the nuclear industry.
Quotes from Industry Leaders
Joe Dominguez, Constellation president and CEO:
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.
GSA administrator Robin Carnahan:
This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. 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 Role
Constellation operates the nation’s largest nuclear fleet and has recently partnered with Microsoft to restart a nuclear reactor at Three Mile Island. The company generates 10% of the nation’s carbon pollution-free energy, primarily through nuclear power but also hydro, wind, and solar sources. It aims to reach 100% carbon-free electricity by 2040.
Impact on the Industry
The GSA contract is the largest energy procurement agreement in its history. By signing this deal, the federal government is supporting continued investment in reliable nuclear energy, allowing Constellation to relicense and extend the lives of existing assets.
Future Developments
Constellation will utilize the contract to extend licenses for existing nuclear power plants and invest in new equipment and technology, resulting in 135 megawatts (MW) of additional capacity. The GSA has agreed to purchase 2.4 million MWh of electricity from this added capacity over 10 years.
Partnerships with Other Agencies
The contract extends beyond the GSA’s buildings, affecting 13 other agencies:
- Departments: Veterans Affairs and Transportation
- Bureaus: Federal Bureau of Prisons
- Services: National Park Service, Social Security Administration, US Mint
Rationale Behind the Contract
The GSA frames this contract as a way to secure more affordable prices in light of increasing electricity demand from data centers and AI facilities. The agreement provides federal agencies with budgetary stability by locking in fixed electricity costs for 10 years.
Industry Trends
Several major tech companies, including Google, Meta, Amazon, and Microsoft, have made notable nuclear energy deals over the past year:
- Microsoft and Constellation: Partnered to restart a shuttered reactor at Three Mile Island
- Biden Administration: Prioritizes nuclear energy as part of its plan to transition the US away from fossil fuels
Additional Developments
- Department of Energy: Announced a $1.52 billion loan in October 2022 to help restart a retired nuclear generating station in Covert Township, Michigan
- Trump Campaign Agenda: Included efforts to support nuclear energy production
