A Major Milestone for Nuclear Energy in the United States

The General Services Administration (GSA), which manages government buildings, has announced a significant nuclear energy contract that marks a major milestone for the industry. The 10-year, $840 million contract is for 10 million megawatt-hours of electricity, equivalent to what’s needed for more than 1 million homes annually.

A Growing Trend in Nuclear Energy Deals

The announcement comes on the heels of several big tech companies making nuclear energy deals last year. Google, Meta, Amazon, and Microsoft have all inked splashy nuclear energy deals over the past year. The trend is clear: Silicon Valley is increasingly turning to nuclear energy to satisfy electricity demand from AI data centers.

A Boon for the Nuclear Industry

The federal government is the nation’s single largest energy consumer, making this contract a big boon to the nuclear industry. According to Constellation spokesperson Paul Adams, nuclear energy makes up about 4 million megawatt-hours of the GSA deal.

A New Era for Sustainable Energy Procurement

Joe Dominguez, Constellation president and CEO, said in a press release: "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."

Constellation’s Commitment to Sustainable Energy

Constellation 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. The company has set a goal of reaching 100 percent carbon-free electricity by 2040 compared to close to 90 percent today.

The Details of the Contract

Constellation says it will 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.

Outside of GSA Buildings

The contract 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. This is a significant expansion of nuclear energy’s reach in the federal government.

A Key Part of the Biden Administration’s Plan

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.

A New Era for Sustainable Energy Procurement

The GSA is framing this 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."

A Bright Future for Nuclear Energy

This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. GSA administrator Robin Carnahan said in a press release: "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 Impact on the Industry

This contract will have a significant impact on the industry. It 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.

A New Era for Sustainable Energy Procurement

The GSA is framing this 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."

Conclusion

The General Services Administration’s announcement of a significant nuclear energy contract is a major milestone for the industry. With the trend of big tech companies making nuclear energy deals last year, it’s clear that Silicon Valley is increasingly turning to nuclear energy to satisfy 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. Constellation says it generates 10 percent of the nation’s carbon pollution-free energy and has set a goal of reaching 100 percent carbon-free electricity by 2040 compared to close to 90 percent today.

The details of the contract are impressive: Constellation will 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.

This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. GSA administrator Robin Carnahan said in a press release: "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 impact on the industry will be significant. This contract will have a direct impact on the development of new nuclear power plants and the expansion of existing ones.

Recommendations

  1. The federal government should continue to support the development of new nuclear power plants.
  2. Companies like Constellation should be encouraged to invest in new equipment and technology that can increase capacity.
  3. The GSA’s procurement process should be examined to see how it can be replicated by other government agencies.

Conclusion

The General Services Administration’s announcement of a significant nuclear energy contract is a major milestone for the industry. With the trend of big tech companies making nuclear energy deals last year, it’s clear that Silicon Valley is increasingly turning to nuclear energy to satisfy electricity demand from AI data centers.

This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. GSA administrator Robin Carnahan said in a press release: "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."