A New Era for Nuclear Energy in the US?
The General Services Administration (GSA), which oversees the management of government buildings, has recently announced a significant 10-year nuclear energy contract. This major development comes on the heels of several prominent tech companies making substantial nuclear energy deals last year.
A $840 Million Contract for 10 Million Megawatt-Hours of Electricity
The 10-year contract is worth a staggering $840 million and includes the procurement of 10 million megawatt-hours (MWh) of electricity. According to the GSA, this amount is equivalent to the energy needs of over 1 million homes annually. The agency has awarded the contract to Constellation, which operates the largest nuclear fleet in the nation.
Nuclear Energy Takes Center Stage
Constellation spokesperson Paul Adams revealed that nuclear energy will account for approximately 4 million MWh of the contracted electricity. This is a significant milestone, as it highlights the growing importance of nuclear energy in meeting the increasing demand for clean and reliable power.
A Shift Towards Nuclear Energy
Silicon Valley has been increasingly turning to nuclear energy to satiate the soaring electricity demands from AI data centers. The federal government, being the nation’s largest energy consumer, is now also embracing nuclear energy as a key component of its sustainable energy strategies.
A Boon for the Nuclear Industry
"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO, in a press release. "Nuclear energy was previously excluded from many corporate and government sustainable energy procurements. Not anymore."
A Partnership for Reliable Energy
Constellation has generated 10% of the nation’s carbon pollution-free energy, with nuclear power accounting for the majority of its output. The company also produces hydro, wind, and solar power, as well as electricity from gas-fired power plants.
Constellation aims to reach 100% carbon-free electricity by 2040, compared to approximately 90% today. However, details on how much of the contracted electricity will come from each source aside from nuclear power plants remain unclear.
A Historic Procurement Contract
The GSA’s contract with Constellation is the largest energy procurement contract in its history. "This historic procurement locks in a cost-competitive, reliable supply of nuclear energy," said GSA Administrator Robin Carnahan 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."
Unlocking New Capacity
The contract will enable Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology. This is expected to result in an additional 135 megawatts (MW) of capacity.
Purchasing Electricity from Additional Capacity
Under the contract, the GSA has agreed to purchase 2.4 million MWh of electricity from the added capacity over a period of 10 years. The deal also extends to 13 other agencies, including:
- Departments:
- Veterans Affairs
- Transportation
- Federal Agencies:
- Federal Bureau of Prisons
- National Park Service
- Social Security Administration
- US Mint
Fostering Budgetary Stability and Reliability
The GSA is framing the contract as a means to lock in more affordable prices, given the increasing electricity demand from data centers and AI facilities. By doing so, federal agencies will benefit from budgetary stability and protection against future price increases.
A New Era for Nuclear Energy in Silicon Valley?
Google, Meta, Amazon, and Microsoft have all made significant 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’s Support for Nuclear Energy
The Biden administration has made nuclear energy a key component of its plan to transition the nation away from fossil fuels towards cleaner energy sources. 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 Shift Towards Clean Energy?
While President-elect Donald Trump plans to undo progress made toward clean energy, his campaign agenda included efforts to support nuclear energy production. This highlights the growing bipartisan support for nuclear energy as a reliable and clean source of power.
The recent announcement by the GSA has sparked interest in the potential for nuclear energy to play a larger role in meeting the nation’s increasing demand for clean and reliable power.
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