With datacenter power crisis looming, US government looks to Constellation

Constellation Energy has won contracts worth more than $1 billion from the US government to supply nuclear power to over 13 federal agencies, validating efforts by datacenter operators to secure their own atomic sources.

The Baltimore-based operator has inked agreements with the US General Services Administration (GSA) for the supply of power, as well as to carry out energy savings and conservation measures at five GSA-owned facilities in the National Capital Region.

Schneider Electric warns of future where datacenters eat the grid
READ MORE

Constellation says it will supply the agencies with more than 1 million megawatt hours (MWh/yr) annually from this year, said to be an amount that could power upward of one million homes. A portion of the power will come from investments the corporation intends to make to increase the output of some of its plants.

The energy provider is already involved in a project confirmed by Microsoft last year to restart the Three Mile Island Unit 1 nuclear power plant as the Crane Clean Energy Center (CCEC).

President and CEO Joe Dominguez said that nuclear power has often been excluded from many corporate and government sustainable energy procurements in the past, but contracts such as this indicate attitudes are changing.

“Under this agreement, the United States government joins Microsoft and other entities to support continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets,” Dominguez said. “In combination with the Crane restart announced previously, Constellation and its partners will add approximately 1,100 MW of 24/7 clean energy by 2028.”

The GSA said the deal provides federal agencies with budgetary stability and protections from future price increases by keeping their electricity costs fixed for ten years, explicitly acknowledging the threat posed by the growing electricity demand from datacenters and their burgeoning AI infrastructure.

“This historic procurement locks in a cost-competitive, reliable supply of nuclear energy over a 10-year period, accelerating progress toward a carbon-free energy future while protecting taxpayers against future price hikes,” GSA Administrator Robin Carnahan claimed.

The energy savings work is to include installation of LED lighting, new and upgraded HVAC kit and building control equipment to improve energy efficiency and decrease emissions at federal buildings located in Washington, D.C.

Constellation owns 21 nuclear reactors, more than any other US operator, and news of the deal saw the company’s shares rise by more than 6 percent, bucking the trend of an otherwise downbeat S&P 500 index.

Million GPU clusters, gigawatts of power – the scale of AI defies logic

Google thinks the grid can’t support AI, so it’s spending on solar for future datacenters

Day after nuclear power vow, Meta announces largest-ever datacenter powered by fossil fuels

Microsoft accused of ‘greenwashing’ as AI used in fossil fuel exploration

In addition to extending the licenses of existing nuclear plants, Constellation intends to invest in new equipment and technology to increase output. The GSA said it expects to purchase 2.4 million megawatt-hours of this new nuclear capacity over the ten-year life of the contract, and along with carbon-free energy already available on the grid, enable the agencies covered by it to become entirely carbon-free by 2030.

As well as Microsoft, other datacenter operators have been showing interest in nuclear as a reliable source of energy recently. Amazon last year acquired a campus built alongside the Susquehanna nuclear power plant in Pennsylvania, although it later hit a roadblock in its plans to draw more power from it to supply new bit barns on the site. Oracle also disclosed proposals for a trio of small modular reactors (SMRs) to power a campus with over a gigawatt of AI compute capacity.

AI-fueled datacenter energy demand is forecast to swell by 160 percent over the next two years, and this is estimated to leave 40 percent of server farms with power constraints by 2027.

Schneider Electric reckons the best bet for datacenter operators is to opt for gas turbines in the short term with small nuclear reactors seen as more viable longer-term options.

A report published in November by Washington, DC-based think tank the Jack Kemp Foundation estimated that 70 percent of Americans could face price hikes in their electricity bills by 2030 if action is not taken to boost generation and transmission capacity, such is the thirst for power from datacenters used to train and operate AI. ®