By Bitwave 
The Federal Government’s Big Bet on Nuclear Energy
A New Era for Clean Energy Procurement
The General Services Administration (GSA), a government agency responsible for managing federal buildings and infrastructure, has just 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.
A 10-Year, $840 Million Contract
The GSA has awarded a 10-year, $840 million contract to Constellation, which operates the nation’s largest fleet of nuclear power plants. The contract is for the supply of 10 million megawatt-hours of electricity, equivalent to powering more than 1 million homes annually. According to Paul Adams, a spokesperson for Constellation, nuclear energy will make up approximately 4 million megawatt-hours of this total.
A Growing Trend in Silicon Valley
The increasing adoption of nuclear energy by tech companies is a significant trend in the industry. As data centers and AI facilities continue to drive up electricity demand, companies are looking for reliable and clean sources of power. Google, Meta, Amazon, and Microsoft have all announced major nuclear energy deals over the past year.
A Boon to the Nuclear Industry
The federal government’s largest energy consumer, this contract is a significant win for the nuclear industry. Joe Dominguez, Constellation’s president and CEO, stated 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."
Constellation’s Commitment to Clean Energy
Constellation generates 10 percent of the nation’s carbon pollution-free energy. A majority of its output comes from nuclear power plants, but the company also produces hydroelectric, wind, and solar power. Additionally, Constellation generates electricity from gas-fired power plants, with a goal of reaching 100 percent carbon-free electricity by 2040.
Breaking Down the Contract
While Constellation declined to provide details on how much of the contract’s energy will come from each source aside from nuclear power plants, the agreement marks a significant milestone for the company. The GSA administrator, Robin Carnahan, stated in a press release: "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."
A 10-Year Supply of Reliable Energy
The contract will enable Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology. This is expected to result in an additional 135 megawatts of capacity. The GSA has agreed to purchase 2.4 million megawatt-hours of electricity from this added capacity over the next decade.
A Broader Impact
The contract extends beyond federal buildings, applying 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. This is a significant step towards achieving the Biden administration’s goal of transitioning the US away from fossil fuels.
Framing the Contract as a Solution
The GSA is framing the contract as a way to lock in more affordable prices amidst increasing electricity demand and competition for limited clean energy sources. By keeping electricity costs fixed for 10 years, federal agencies will have budgetary stability and protection from future price increases.
A New Era for Nuclear Energy
As the country continues to transition towards cleaner energy sources, the GSA’s contract with Constellation marks a significant milestone. With major tech companies and government agencies investing in nuclear energy, this trend is likely to continue in the coming years.
Timeline of Recent Nuclear Energy Deals
- In September 2022, Microsoft and Constellation announced plans to restart a shuttered reactor at Three Mile Island in Pennsylvania.
- Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan.
- The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels.
Conclusion
The GSA’s contract with Constellation is a significant step towards achieving the country’s clean energy goals. As more companies and government agencies invest in nuclear energy, this trend is likely to continue in the coming years. With a growing demand for reliable and clean sources of power, the future of nuclear energy looks bright.