The General Services Administration (GSA), which manages government buildings, just announced a major nuclear energy contract. This is another big news after several large technology companies struck nuclear energy deals last year.
The 10-year, $840 million contract covers the supply of 10 million megawatt hours of electricity, which the GSA says is equivalent to the annual power needs of more than 1 million homes. The agency awarded the contract to Constellation, which operates the nation's largest nuclear power fleet and recently announced a deal with Microsoft to restart a nuclear reactor at Three Mile Island. According to Constellation spokesman Paul Adams (Paul Adams)Nuclear energy accounts for a large portion of GSA's transactions, about 4 million megawatt hours, it said.
Silicon Valley is increasingly turning to nuclear energy to meet the growing power needs of artificial intelligence data centers. The federal government is the largest consumer of energy in the United States, so this contract is a boon for the nuclear industry.
"This agreement is another powerful example that things have changed. It's frustrating... that nuclear energy has been excluded from sustainable energy procurement by many businesses and governments. Not anymore. This agreement is another powerful example that things have changed," Constellation President and CEO Joe Dominguez said in a release. "The U.S. government joins Microsoft and other entities in supporting continued investment in reliable nuclear power, which will allow Constellation to regain licenses and extend the life of these critical assets."
Constellation says it produces 10% of the country's carbon pollution-free energy. Most of its output is nuclear, but it also produces hydro, wind and solar electricity. The company also generates electricity from gas-fired power plants, but it has set a goal of 100% carbon-free electricity generation by 2040 and is currently approaching 90%.
Constellation and GSA declined to answer questions about the sources of electricity in the contract other than nuclear power plants. Altogether, this is the largest energy procurement contract signed in GSA history.
"This historic purchase locks in a reliable, cost-competitive supply of nuclear energy," GSA Administrator Robin Carnahan said in the release. "We are showing how the federal government can work with major corporate clean energy buyers to stimulate new nuclear energy capacity and ensure reliable, affordable clean energy for everyone."
The contract will allow Constellation to extend the license period of existing nuclear power plants and "invest in new equipment and technology" to add 135 megawatts of generating capacity. GSA agreed to purchase 2.4 million megawatt-hours of electricity from new generation capacity over 10 years. In addition to GSA buildings, the agreement applies 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 U.S. Mint.
The GSA sees the contract as a way to lock in more affordable prices as data centers drive growth in power demand and intensify competition for limited clean energy:
For example, in the face of uncertainty about future electricity prices and the growing power needs of data centers and artificial intelligence facilities, this contract provides federal agencies with budget stability and protection from future price increases by maintaining fixed electricity costs for 10 years, while also continuing to support the development of the domestic nuclear industry.
Google, Meta, Amazon and Microsoft have all signed high-profile nuclear energy deals in the past year. Last September, Microsoft and Constellation announced a plan to restart a shuttered reactor at Three Mile Island, Pennsylvania, the site of the worst nuclear accident in U.S. history.
The Biden administration has also made nuclear power a key part of its plan to transition the United States away from fossil fuels and toward energy sources that do not contribute to climate change. In October, the Energy Department announced a $1.52 billion loan to help restart a decommissioned nuclear power plant in Coover Township, Michigan. While President-elect Donald Trump plans to undo progress on clean energy, Trump's campaign agenda includes efforts to "support nuclear energy production."