Nuclear Energy Contract Worth $840 Million Signed by GSA
The General Services Administration (GSA), which manages government buildings, has announced a major nuclear energy contract worth $840 million. This announcement comes on the heels of several big tech companies making significant nuclear energy deals last year.
Key Points of the Contract
- The 10-year contract is for 10 million megawatt-hours of electricity, equivalent to what’s needed for more than 1 million homes annually.
- The GSA has awarded the contract to 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.
- Nuclear energy makes up about 4 million megawatt-hours of the deal, according to Constellation spokesperson Paul Adams.
Impact on the Industry
Silicon Valley is increasingly turning to nuclear energy to satiate electricity demand from AI data centers. The federal government is the nation’s single largest energy consumer, making this contract a big boon to 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."
The United States government joins Microsoft and other entities in supporting continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets.
Details About the Contract
Constellation says it 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. 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 compared to close to 90 percent today.
Constellation and the GSA declined to answer questions about how much of the electricity included in the contract will come from each source aside from nuclear power plants.
Government Response
Altogether, it’s the biggest energy procurement contract the GSA has signed in its history. "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."
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.
Impact Beyond Government Buildings
The deal 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 US Mint. 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."
Recent Developments in Nuclear Energy
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 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.
And while President-elect Donald Trump plans to undo progress made toward clean energy, the Trump campaign agenda included efforts to ‘support nuclear energy production.’
