The General Services Administration (GSA), which oversees government buildings and facilities, has recently announced a significant nuclear energy contract. This development comes on the heels of several major tech companies making substantial investments in nuclear energy over the past year.
Contract Details
The 10-year, $840 million contract is for 10 million megawatt-hours of electricity, which translates to approximately what’s needed for more than 1 million homes annually. The GSA has awarded this contract to Constellation, which operates the largest nuclear fleet in the nation and has recently partnered with Microsoft to restart a nuclear reactor at Three Mile Island.
According to Constellation spokesperson Paul Adams, about 4 million megawatt-hours of the electricity will be generated through nuclear energy. This is a significant portion of the total amount contracted by the GSA.
Growing Demand for Nuclear Energy
Silicon Valley is increasingly turning to nuclear energy to meet the growing demand for electricity from AI data centers. The federal government, being the nation’s single largest energy consumer, has made this contract a crucial milestone for the nuclear industry.
"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO. "Frustratingly… nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore."
Constellation’s Role in Nuclear Energy
Constellation generates approximately 10 percent of the nation’s carbon pollution-free energy. A majority of its output comes from nuclear energy, but it also produces hydro, wind, and solar power. Additionally, the company generates electricity from gas-fired power plants, although it has set a goal of reaching 100 percent carbon-free electricity by 2040.
Constellation declined to provide further information on how much of the electricity included in the contract will come from each source aside from nuclear power plants.
Impact of the Contract
This contract marks the largest energy procurement agreement signed by the GSA in its history. The agency believes that this deal will lock in a cost-competitive, reliable supply of nuclear energy for federal agencies and contribute to the development of new nuclear capacity.
"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."
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 has agreed to purchase 2.4 million megawatt-hours of electricity from this added capacity over the course of 10 years.
Government Agencies Involved
The contract extends beyond the GSA, also involving 13 other federal agencies, including:
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Departments:
- Department of Veterans Affairs
- Department of Transportation
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Federal Agencies:
- Federal Bureau of Prisons
- National Park Service
- Social Security Administration
- US Mint
Government’s Support for Nuclear Energy
The GSA is framing this contract as a way to lock in more affordable prices, ensuring budgetary stability and protection from future price increases. This is particularly relevant given the increasing demand for electricity from data centers and AI facilities.
In response to growing concerns over future electricity prices and increasing 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, while also continuing to bolster the domestic nuclear industry.
Nuclear Energy Deals in Silicon Valley
Google, Meta, Amazon, and Microsoft have all made significant investments in nuclear energy 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 accident in US history.
The Biden administration has also 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.
Nuclear Energy’s Role in the Future
While President-elect Donald Trump plans to undo progress made toward clean energy, his campaign agenda included efforts to support nuclear energy production.
