The General Services Administration (GSA), which oversees government buildings and facilities, has recently announced a significant nuclear energy contract. This move comes on the heels of several major tech companies making substantial nuclear energy deals last year.
A 10-Year, $840 Million Contract for 10 Million Megawatt-Hours of Electricity
The GSA has awarded a 10-year, $840 million contract to Constellation, which operates the nation’s largest nuclear fleet. The contract is for 10 million megawatt-hours of electricity, equivalent to what’s needed for over 1 million homes annually. According to Constellation spokesperson Paul Adams, about 4 million megawatt-hours will come from nuclear energy.
Nuclear Energy on the Rise in Silicon Valley
Silicon Valley companies are increasingly turning to nuclear energy to meet the growing electricity demand from AI data centers. As the nation’s single largest energy consumer, the federal government is also joining this trend with its recent contract. This deal will provide a significant boost to the nuclear industry.
Constellation’s Role in Nuclear Energy
Constellation generates 10 percent of the nation’s carbon pollution-free energy. A majority of its output comes from nuclear energy, but it also produces hydro, wind, and solar power. The company aims to reach 100 percent carbon-free electricity by 2040, up from close to 90 percent today.
Details of the Contract
Constellation and the GSA declined to provide details on how much of the electricity included in the contract will come from each source aside from nuclear power plants. However, it’s clear that this deal will have a significant impact on the nuclear industry.
The Largest Energy Procurement Contract in the GSA’s 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 Benefits
This contract will allow Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology. As a result, the company should gain 135 megawatts of additional capacity. The GSA agreed to purchase 2.4 million megawatt-hours of electricity from this added capacity over the next decade.
The Contract’s Impact on Federal Agencies
Outside of GSA buildings, the deal will extend to 13 other agencies, including:
- Department of Veterans Affairs
- Department of Transportation
- Federal Bureau of Prisons
- National Park Service
- Social Security Administration
- US Mint
The Importance of Affordable Energy Prices
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 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 in the Past Year
In recent times, Google, Meta, Amazon, and Microsoft have all signed significant nuclear energy deals. 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 accident in US history.
The Biden Administration’s Plan for Nuclear Energy
The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels to cleaner energy sources. 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 in Attitude Towards Nuclear Energy
The GSA’s decision to sign this contract is a significant shift in attitude towards nuclear energy. As Joe Dominguez, Constellation president and CEO, said, "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."
The Future of Nuclear Energy
With this contract in place, the GSA and other federal agencies will be able to rely on a cost-competitive, reliable supply of nuclear energy for years to come. This deal is a major boost to the nuclear industry and demonstrates the growing importance of nuclear energy in meeting the nation’s clean energy needs.
Conclusion
The GSA’s announcement of a major nuclear energy contract marks a significant shift in attitude towards nuclear energy. As the nation continues to transition away from fossil fuels, it’s clear that nuclear energy will play an increasingly important role in providing reliable, affordable clean energy. With this deal in place, federal agencies and other organizations can rely on a steady supply of nuclear energy for years to come.
