Loading stock data...
2183984509
Technology

US Government Announces Historic Nuclear Energy Deal

Horizonstocks

Major Nuclear Energy Contract Awarded by General Services Administration (GSA)

The General Services Administration (GSA), which manages government buildings and facilities, has announced a significant nuclear energy contract. This contract comes on the heels of several major tech companies making notable deals in the nuclear energy sector last year.

$840 Million Contract for 10 Million Megawatt-Hours of Electricity

The 10-year contract, worth $840 million, is for 10 million megawatt-hours of electricity. According to the GSA, this amount is equivalent to what’s needed for more than 1 million homes annually. The agency awarded the contract to Constellation, which operates the nation’s largest nuclear fleet and has recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island.

Nuclear Energy Takes Center Stage

Nuclear energy makes up a significant portion of the GSA deal, approximately 4 million megawatt-hours, according to Constellation spokesperson Paul Adams. This increase in demand for nuclear energy is not limited to government contracts; Silicon Valley companies are also turning to nuclear energy to meet the growing electricity needs of their AI data centers.

Federal Government’s Energy Consumption

The federal government is the nation’s single largest energy consumer, making this contract a significant boon to the nuclear industry. As Joe Dominguez, Constellation president and CEO, noted in a press release:

"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."

Constellation’s Commitment to Clean Energy

Constellation generates 10 percent of the nation’s carbon pollution-free energy, with a majority of its output coming from nuclear energy. However, the company also produces hydro, wind, and solar power, as well as electricity from gas-fired power plants. Constellation has set a goal of reaching 100 percent carbon-free electricity by 2040, up from close to 90 percent today.

Electricity Source Breakdown

While Constellation declined to answer questions about how much of the electricity included in the contract will come from each source aside from nuclear power plants, it’s clear that this deal represents a significant commitment to clean energy. The GSA is framing the contract as a way to lock in more affordable prices for federal agencies, which face increasing competition for limited clean energy sources.

Impact on the Nuclear Industry

The contract will allow Constellation to extend licenses for existing nuclear power plants and 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 this added capacity over 10 years.

External Agencies Involved

The contract extends beyond government buildings, with the deal also applying to 13 other agencies, including:

  • Departments of Veterans Affairs and Transportation
  • Federal Bureau of Prisons
  • National Park Service
  • Social Security Administration
  • US Mint

A Boost for the Domestic Nuclear Industry

The GSA is framing the contract as a way to bolster the domestic nuclear industry, which has faced declining investment in recent years. The agency’s administrator, Robin Carnahan, noted:

"This historic procurement locks in a cost-competitive, reliable supply of nuclear energy. 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 Role of Big Tech in the Nuclear Energy Sector

Big tech companies have been increasingly turning to nuclear energy to meet their growing electricity needs. Google, Meta, Amazon, and Microsoft have all inked notable deals in the nuclear energy sector over the past year.

  • Microsoft and Constellation’s Partnership: In September 2022, Microsoft and Constellation announced a plan to restart a shuttered reactor at Three Mile Island in Pennsylvania.
  • Google’s Nuclear Energy Deal: Google has been investing heavily in nuclear energy, with a focus on small modular reactors.
  • Meta’s Clean Energy Commitment: Meta has committed to powering 100 percent of its operations with renewable energy by 2025.

Government Support for Nuclear Energy

The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels and towards clean energy sources. The Department of Energy has announced several initiatives to support the development of new nuclear technologies, including:

  • $1.52 Billion Loan: In October 2022, 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 marks a significant shift in the US energy landscape, with the federal government joining major corporate clean energy buyers in spurring new nuclear energy capacity. As the demand for clean energy continues to grow, it remains to be seen how this contract will impact the domestic nuclear industry and the broader energy sector.

Frequently Asked Questions

  • What is the significance of this contract?
    • The contract represents a significant commitment to clean energy and a major boost for the domestic nuclear industry.
  • How much electricity will come from each source?
    • Constellation declined to answer questions about how much of the electricity included in the contract will come from each source aside from nuclear power plants.
  • What is the impact on the nuclear industry?
    • The contract will allow Constellation to extend licenses for existing nuclear power plants and invest in new equipment and technology that should result in 135 megawatts of additional capacity.

Sources