The General Services Administration (GSA), which is responsible for managing government buildings, has announced a major nuclear energy contract that marks a significant shift in the industry. This announcement comes on the heels of several big tech companies making a flurry of nuclear energy deals last year.
A 10-Year Contract Worth $840 Million
The contract, worth $840 million over 10 years, is for 10 million megawatt-hours of electricity, which is equivalent to what’s needed for more than 1 million homes annually. The GSA has awarded the contract to Constellation, which operates the nation’s largest nuclear fleet and recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island.
Nuclear Energy: A Significant Portion of the Contract
According to Constellation spokesperson Paul Adams, nuclear energy makes up a significant portion of the GSA deal, about 4 million megawatt-hours. This is a major boost for the industry, which has been struggling to compete with other forms of renewable energy.
Silicon Valley’s Increasing Demand for Nuclear Energy
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.
A New Era for Nuclear Energy
"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO, in a press release. "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 Renewable Energy
Constellation says it 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 Contract: A Win-Win for Both Parties
Altogether, this contract is the biggest energy procurement contract the GSA has signed 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."
The Contract’s Impact on the Industry
The contract 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. The GSA has agreed to purchase 2.4 million megawatt-hours of electricity from that added capacity over 10 years.
Extension of the Contract to Other Agencies
Outside of GSA buildings, the deal also 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.
A Solution to Increasing Electricity Demand
The GSA is framing the 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," said a GSA spokesperson.
The Role of Big Tech in Nuclear Energy
Google, Meta, Amazon, and Microsoft have all inked splashy 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 Commitment to Nuclear Energy
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.
Conclusion
The GSA’s historic nuclear energy contract is a game-changer for the industry. It marks a significant shift towards increased investment in reliable nuclear energy and demonstrates how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity. As the demand for electricity continues to grow, this contract provides a solution to increasing competition for limited clean energy sources.
The Future of Nuclear Energy
The future of nuclear energy is looking bright, with big tech companies and the federal government investing heavily in the industry. With Constellation’s commitment to reaching 100 percent carbon-free electricity by 2040, it’s clear that the industry is moving towards a more sustainable future.
The Impact on Jobs and the Economy
This contract will have a significant impact on jobs and the economy, with Constellation expecting to create new employment opportunities in the nuclear energy sector. The contract also demonstrates how investment in nuclear energy can stimulate economic growth and development.
A New Era for Nuclear Energy
As we move forward into this new era of increased investment in reliable nuclear energy, it’s clear that the industry is poised for growth and development. With big tech companies and the federal government leading the way, it’s an exciting time for the future of nuclear energy.
