Major Nuclear Energy Contract Signed by General Services Administration
The General Services Administration (GSA), which oversees government buildings and facilities, has announced a significant nuclear energy contract. This development comes on the heels of several major tech companies making substantial investments in nuclear energy over the past year.
$840 Million Contract for 10 Million Megawatt-Hours of Electricity
The 10-year contract is valued at $840 million and encompasses 10 million megawatt-hours of electricity, which translates to approximately what’s needed for more than 1 million homes annually. The agency has awarded this contract to Constellation, the nation’s largest nuclear fleet operator.
Constellation spokesperson Paul Adams revealed that nuclear energy accounts for a substantial portion of the GSA deal, with around 4 million megawatt-hours of electricity generated from nuclear power plants. This is in line with the company’s commitment to providing carbon pollution-free energy.
Growing Demand for Nuclear Energy
Silicon Valley has been actively investing in nuclear energy to meet the escalating electricity demands of AI data centers. The federal government, as the nation’s largest energy consumer, plays a crucial role in supporting the nuclear industry through such contracts.
"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO, in a press release. "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."
Dominguez emphasized the importance of this contract in supporting continued investment in reliable nuclear energy, allowing Constellation to relicense and extend the lives of critical assets.
Constellation’s Diversified Energy Portfolio
Constellation generates 10 percent of the nation’s carbon pollution-free energy. While a majority of its output comes from nuclear energy, the company also produces hydro, wind, and solar power. Additionally, it generates electricity from gas-fired power plants, with a goal of reaching 100 percent carbon-free electricity by 2040.
However, the company declined to provide further details on how much of the contracted electricity will come from each source aside from nuclear power plants.
Historic Procurement Contract
This contract marks the biggest energy procurement deal in GSA history. Administrator Robin Carnahan hailed it as a significant milestone, stating, "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."
Contract Benefits and Impact
The contract will enable Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology, resulting in 135 megawatts of additional capacity. Over the next decade, GSA has agreed to purchase 2.4 million megawatt-hours of electricity from this added capacity.
Moreover, this deal extends beyond GSA buildings, encompassing 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.
Framing the Contract
The GSA is framing the contract as a means to secure more affordable prices, given the escalating electricity demands from data centers and AI facilities. The agency emphasizes that this contract will provide federal agencies with budgetary stability and protection from future price increases by keeping their electricity costs fixed for 10 years.
Growing Support for Nuclear Energy
The GSA’s decision is part of a broader trend in Silicon Valley, where major tech companies have been actively investing in nuclear energy over the past year. Google, Meta, Amazon, and Microsoft have all signed significant nuclear energy deals.
In September last year, Microsoft and Constellation announced plans to restart a shuttered reactor at Three Mile Island in Pennsylvania, the site of one of the worst nuclear energy accidents in US history. The Biden administration has also made nuclear energy a key component of its plan to transition the country away from fossil fuels and towards cleaner energy sources.
The Department of Energy announced a $1.52 billion loan last October to help restart a retired nuclear generating station in Covert Township, Michigan. While President-elect Donald Trump’s campaign agenda included efforts to support nuclear energy production, it remains to be seen whether his administration will uphold this commitment.
Conclusion
The GSA’s announcement marks a significant development in the growth of nuclear energy in the US. With major tech companies and government agencies increasingly turning to nuclear power, there is growing recognition of its importance in meeting the nation’s clean energy needs.
