Nuclear Energy Contract Signed by General Services Administration
The General Services Administration (GSA), which is responsible for managing government buildings and facilities, has announced a significant contract with Constellation, a leading provider of nuclear energy. This development comes on the heels of several major tech companies making substantial investments in nuclear energy last year.
A 10-Year Contract Worth $840 Million
The GSA has signed a 10-year contract worth $840 million for the procurement of electricity from Constellation. The agreement will provide 10 million megawatt-hours of electricity, which is equivalent to meeting the annual needs of more than 1 million homes. This contract is notable not only for its size but also because it marks a significant shift in the way the federal government approaches energy procurement.
A Focus on Nuclear Energy
Nuclear energy will make up a substantial portion of the electricity procured under this contract, with Constellation estimating that approximately 4 million megawatt-hours will come from nuclear sources. This is not surprising given Constellation’s commitment to nuclear energy, which currently generates around 10% of the nation’s carbon pollution-free energy.
Silicon Valley and Nuclear Energy
The increasing demand for electricity from AI data centers in Silicon Valley has driven a renewed interest in nuclear energy as a reliable and sustainable source of power. With the federal government being the largest consumer of energy in the country, this contract represents a significant boost to the nuclear industry.
"We are excited about this agreement because it shows that things have changed," said Joe Dominguez, Constellation’s President and CEO, in a press release. "Nuclear energy was once excluded from many corporate and government sustainable energy procurements, but now we see companies like Microsoft and other entities supporting continued investment in reliable nuclear energy."
Constellation’s Commitment to Nuclear Energy
Constellation is a leader in the production of nuclear energy, with a significant portion of its output coming from nuclear power plants. The company also produces hydro, wind, and solar power, as well as electricity from gas-fired power plants. However, Constellation has set a goal of reaching 100% carbon-free electricity by 2040.
The Contract’s Significance
This contract is the largest energy procurement agreement in GSA history and represents a significant milestone for the nuclear industry. The GSA has framed this contract as a way to lock in affordable prices and provide budgetary stability for federal agencies in the face of increasing competition for clean energy sources.
"This historic procurement locks in a cost-competitive, reliable supply of nuclear energy," said Robin Carnahan, Administrator of the GSA, in a press release. "We are 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 Terms
Under the terms of this contract, Constellation will be able to extend licenses for existing nuclear power plants as well as invest in new equipment and technology. This investment is expected to result in an additional 135 megawatts of capacity, which will provide 2.4 million megawatt-hours of electricity over a period of 10 years.
Other Agencies Impacted by the Contract
While this contract primarily affects GSA buildings, it also extends to other federal 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 Future of Nuclear Energy
The Biden administration has made nuclear energy a key component of its plan to transition the country away from fossil fuels. Last year, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan. This latest contract demonstrates the growing interest in nuclear energy as a reliable and sustainable source of power.
A Shift in Priorities
The increasing demand for electricity from data centers and AI facilities has driven a shift in priorities for companies like Google, Meta, Amazon, and Microsoft. Each of these companies has made significant investments in nuclear energy over the past year, recognizing its potential to provide a reliable and sustainable source of power.
Conclusion
This contract represents a significant milestone for the nuclear industry and demonstrates the growing interest in nuclear energy as a reliable and sustainable source of power. As the demand for electricity continues to rise, it is likely that we will see even more investment in nuclear energy from companies and governments alike.
Appendix: Key Takeaways
- The GSA has signed a 10-year contract worth $840 million with Constellation.
- Nuclear energy will make up approximately 40% of the electricity procured under this contract.
- This contract is significant because it represents the largest energy procurement agreement in GSA history.
- Constellation plans to invest in new equipment and technology, which will result in an additional 135 megawatts of capacity.
- This contract extends beyond GSA buildings to other federal agencies including the Departments of Veterans Affairs and Transportation.
- The Biden administration has made nuclear energy a key component of its plan to transition the country away from fossil fuels.
