The U.S. General Services Administration (GSA), responsible for managing government buildings, has just announced a major nuclear energy deal. This follows a series of nuclear energy agreements made by prominent tech companies last year.
The 10-year contract, valued at $840 million, involves 10 million megawatt-hours of electricity, which the GSA claims is enough to power over 1 million homes annually. The contract was awarded to Constellation, which operates the largest nuclear fleet in the U.S., and has recently entered into an agreement with Microsoft to restart a reactor at the infamous Three Mile Island site. According to Constellation spokesperson Paul Adams, nuclear energy comprises a significant portion of the contract, amounting to around 4 million megawatt-hours.
As demand for electricity from AI data centers continues to rise, Silicon Valley is increasingly turning to nuclear energy to meet its needs. As the largest energy consumer in the U.S., the federal government’s contract is a significant boon to the nuclear industry.
Joe Dominguez, Constellation’s President and CEO, commented in a press release, "Frustratingly, nuclear energy had been excluded from many corporate and government sustainable energy procurement programs. Not anymore. This agreement is another powerful example of how things have changed." He added, "The U.S. government, alongside Microsoft and other entities, is backing continued investment in reliable nuclear energy, enabling Constellation to relicense and extend the life of these critical assets."
Constellation claims to generate 10% of the nation's carbon-free energy. Most of its output comes from nuclear power, but it also produces hydropower, wind, and solar energy. Additionally, the company operates gas-fired plants, though it has set a target to reach 100% carbon-free electricity by 2040, up from nearly 90% today.
Neither Constellation nor the GSA responded to inquiries about the breakdown of the electricity sources other than nuclear in the contract. This is the largest energy procurement deal the GSA has ever signed.
“This historic procurement locks in a cost-competitive, reliable supply of nuclear energy,” GSA Administrator Robin Carnahan said in a press release. “We’re showing how the federal government can collaborate with major corporate clean energy buyers to stimulate new nuclear energy capacity and ensure a steady, affordable supply of clean energy for all.”
The contract will allow Constellation to extend licenses for existing nuclear plants and "invest in new equipment and technology," potentially adding 135 megawatts of additional capacity. Over the next 10 years, GSA has agreed to purchase 2.4 million megawatt-hours of electricity from this expanded capacity. The deal also extends to 13 other federal agencies, including the Departments of Veterans Affairs, Transportation, and the Federal Bureau of Prisons, as well as the National Park Service, Social Security Administration, and the U.S. Mint.
The GSA frames this contract as a way to lock in lower prices amid rising electricity demand from data centers and increasing competition for clean energy sources:
"With the uncertainty over future electricity prices and the growing demand from data centers and AI facilities, this contract provides federal agencies with budget stability and protection from future price hikes by fixing their electricity costs for 10 years, while also continuing to strengthen the domestic nuclear industry."
Over the past year, companies like Google, Meta, Amazon, and Microsoft have all made notable nuclear energy deals. In September, Microsoft and Constellation announced plans to restart a shuttered reactor at Three Mile Island in Pennsylvania, the site of the worst nuclear accident in U.S. history.
The Biden administration has also made nuclear energy a key component of its strategy to shift the U.S. away from fossil fuels and toward energy sources that don’t contribute to climate change. Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear plant in Covert Township, Michigan. While President-elect Donald Trump plans to reverse progress made on clean energy, his campaign agenda included efforts to "support nuclear energy production."