The General Services Administration (GSA), which manages government buildings, has just revealed a significant nuclear energy contract. This announcement follows a series of nuclear energy agreements made by major tech companies last year.
The GSA has awarded a 10-year, $840 million contract for 10 million megawatt-hours of electricity, which they claim is equivalent to the annual energy needs of over 1 million homes. Constellation, the operator of the nation’s largest nuclear fleet, received the contract and recently formed an agreement with Microsoft to restart a nuclear reactor at Three Mile Island. A significant portion of the GSA deal, approximately 4 million megawatt-hours, will come from nuclear energy, according to Constellation spokesperson Paul Adams.
Silicon Valley is increasingly looking to nuclear energy to meet the growing electricity demands of AI data centers. As the largest energy consumer in the nation, the federal government’s support of nuclear energy in this contract is a major boost to the industry.
“This agreement is another powerful example of how things have changed.”
“Frustratingly … many corporate and government sustainable energy procurements excluded nuclear energy in the past. This agreement signifies a shift in that trend,” said Joe Dominguez, Constellation president and CEO, in a press release. “By partnering with Microsoft and other entities, the US government is showing support for continued investment in reliable nuclear energy, allowing Constellation to maintain and extend the lifespan of these critical assets.”
Constellation claims to produce 10 percent of the nation’s carbon pollution-free energy, with the majority coming from nuclear energy. They also generate power from hydro, wind, and solar sources, with a goal of achieving 100 percent carbon-free electricity by 2040, up from nearly 90 percent currently.
Constellation and the GSA have not disclosed the breakdown of electricity sources in the contract apart from nuclear power plants. Nonetheless, this is the largest energy procurement contract signed by the GSA to date.
“This historic procurement secures a cost-effective, reliable supply of nuclear energy,” stated GSA administrator Robin Carnahan in a press release. “By participating alongside major corporate clean energy purchasers, the federal government is supporting the growth of new nuclear energy capacity, ensuring a dependable, economical source of clean energy for all.”
The contract will enable Constellation to extend licenses for existing nuclear power plants and invest in new technology and equipment, resulting in an additional 135 megawatts of capacity. The GSA has agreed to purchase 2.4 million megawatt-hours from this added capacity over a decade. Aside from GSA facilities, the agreement extends to 13 other agencies, including the VA, DOT, FBI, NPS, SSA, and the US Mint.
The GSA emphasizes that the contract aims to lock in lower prices as data centers drive up electricity demand and increase competition for clean energy sources:
In light of uncertainties surrounding future electricity costs and the rising demand from data centers and AI facilities, this contract provides federal agencies with financial stability and safeguards against future price hikes by fixing their electricity costs for a decade, while also supporting the growth of the domestic nuclear industry.
In the past year, major companies like Google, Meta, Amazon, and Microsoft have all made notable nuclear energy agreements. In September, Microsoft and Constellation announced a plan to restart a decommissioned 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 crucial component of its strategy to shift the US away from fossil fuels towards cleaner energy sources. Last October, the DOE announced a $1.52 billion loan to help restart a retired nuclear power plant in Covert Township, Michigan. Despite President-elect Donald Trump’s plans to roll back clean energy efforts, his campaign agenda included initiatives to “support nuclear energy production.”
