The GSA Announces a Major Nuclear Energy Contract
Introduction
The General Services Administration (GSA), which manages government buildings, has recently announced a significant nuclear energy contract. This comes after several major tech companies made numerous nuclear energy deals last year. 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.
The Contract Details
The agency 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. According to Constellation spokesperson Paul Adams, nuclear energy makes up a significant portion of the GSA deal, about 4 million megawatt-hours.
The Growing Demand for Nuclear Energy
Silicon Valley is increasingly turning to nuclear energy to satiate 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.
"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,"
Joe Dominguez, Constellation president and CEO, said in a press release.
"The United States government joins Microsoft and other entities to support continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets."
Constellation’s Commitment to Clean 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. It also generates electricity from gas-fired power plants, although the company has set a goal of reaching 100 percent carbon-free electricity by 2040 compared to close to 90 percent today.
The GSA’s Commitment to Clean Energy
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 agreed to purchase 2.4 million megawatt-hours of electricity from that added capacity over 10 years.
The Impact on the Federal Government
The contract will allow federal agencies 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."
The Growing Trend of Nuclear Energy Deals
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 also 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 announcement is a significant step forward for the nuclear industry and the federal government’s commitment to clean energy. With this contract, the United States government joins major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone.
Key Statistics:
- 10 million megawatt-hours of electricity
- $840 million contract
- 4 million megawatt-hours of nuclear energy
- 2.4 million megawatt-hours of additional capacity
- 135 megawatts of new capacity
Sources:
- General Services Administration (GSA)
- Constellation Energy
- Microsoft
- Department of Energy
- Joe Dominguez, Constellation president and CEO