The General Services Administration (GSA) Announces Major Nuclear Energy Contract
A New Era for Nuclear Energy in the United States
In a significant development, the General Services Administration (GSA), which manages government buildings, has announced a major nuclear energy contract. This move comes on the heels of several big tech companies making a flurry of nuclear energy deals last year. The 10-year, $840 million contract is for 10 million megawatt-hours of electricity, which the GSA says is equivalent to what’s needed for more than 1 million homes annually.
The Largest Nuclear Fleet Operator Secures the Contract
The agency awarded the contract to Constellation, which operates the nation’s largest nuclear fleet. Recently, Constellation announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island. Nuclear energy makes up a significant portion of the GSA deal, about 4 million megawatt-hours, according to Constellation spokesperson Paul Adams.
Silicon Valley’s Shift Towards 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," said Joe Dominguez, Constellation president and CEO. "Frustratingly, nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore."
A Commitment to Carbon-Free 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.
How Much Nuclear Energy Will Be Generated?
Constellation and the GSA declined to answer questions about how much of the electricity included in the contract will come from each source aside from nuclear power plants. Altogether, it’s the biggest energy procurement contract the GSA has signed in its history.
A Historic Procurement for a Reliable Supply of Nuclear Energy
"This historic procurement locks in a cost-competitive, reliable supply of nuclear energy," said GSA administrator Robin Carnahan. "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 Benefits
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.
A Broader Impact
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. 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.
The Impact on Future Electricity Prices
In the face of uncertainty over future electricity prices and increasing electricity demand from data centers and AI facilities, this contract provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for 10 years, while also continuing to bolster the domestic nuclear industry.
A New Era for Nuclear Energy in Silicon Valley
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.
A Shift Towards Clean Energy
The Trump campaign agenda included efforts to ‘support nuclear energy production.’ Despite this, it seems clear that the trend is towards a greater focus on clean energy and nuclear power as part of that effort.
