Major Nuclear Energy Contract Announced by General Services Administration
Nuclear Energy Contracts on the Rise in Silicon Valley and Beyond
The General Services Administration (GSA), which manages government buildings, has announced a significant 10-year contract for nuclear energy. This major development comes on the heels of several big tech companies making notable nuclear energy deals last year.
Contract Details
- Duration: The contract is set to span 10 years.
- Value: The total value of the contract stands at $840 million.
- Electricity Demand: The GSA has contracted for 10 million megawatt-hours (MWh) of electricity, which translates to meeting the annual energy needs of over 1 million homes.
Nuclear Energy’s Growing Importance in Silicon Valley and Beyond
Silicon Valley is increasingly turning to nuclear energy to address rising electricity demand from AI data centers. The federal government, being the nation’s single largest energy consumer, stands to benefit significantly from this contract. According to Constellation spokesperson Paul Adams, about 4 million MWh of the contracted electricity will come from nuclear power plants.
A Shift Towards Nuclear Energy
The inclusion of nuclear energy in corporate and government sustainable energy procurements is a significant departure from past practices. Joe Dominguez, Constellation’s president and CEO, highlighted this shift in his press release statement: "This agreement is another powerful example of how things have changed… This agreement is another powerful example of how things have changed."
Constellation’s Role in the Nuclear Energy Industry
- Carbon-Free Energy: Constellation generates 10 percent of the nation’s carbon pollution-free energy.
- Diversified Energy Mix: The company produces electricity from nuclear, hydro, wind, and solar power, as well as gas-fired power plants. However, it has set a goal to reach 100 percent carbon-free electricity by 2040.
Contract Benefits and Impact
The GSA’s administrator, Robin Carnahan, emphasized the benefits of this historic procurement: "This historic procurement locks in a cost-competitive, reliable supply of nuclear energy." The contract allows Constellation to extend licenses for existing nuclear power plants and invest in new equipment and technology, resulting in 135 megawatts of additional capacity. This added capacity will contribute an estimated 2.4 million MWh of electricity over the next decade.
Extension Beyond GSA Buildings
The contract’s benefits are not limited to GSA buildings alone. It also extends to 13 other federal agencies, including:
- Department of Veterans Affairs
- Department of Transportation
- Federal Bureau of Prisons
- National Park Service
- Social Security Administration
- US Mint
Locking in Affordable Prices
The GSA is framing the contract as a means to lock in more affordable prices. The agency recognizes that rising electricity demand from data centers and AI facilities poses significant challenges for clean energy sources.
- Data Centers’ Electricity Demand: The increasing electricity needs of data centers are driving up competition for limited clean energy sources.
- Price Uncertainty: The contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years.
Nuclear Energy Deals Across Industries
Several major companies have made significant nuclear energy deals in the past year, including:
- Microsoft and Constellation’s agreement to restart a shuttered reactor at Three Mile Island.
- Google, Meta, Amazon, and Microsoft’s investments in nuclear energy.
The Biden administration has also emphasized the importance of nuclear energy as part of its plan to transition away from fossil fuels.