The General Services Administration (GSA) Awards Major Nuclear Energy Contract
The General Services Administration (GSA), which is responsible for managing government buildings and facilities, has recently announced a significant nuclear energy contract. This development comes on the heels of several major tech companies making substantial deals with the nuclear industry last year.
A 10-Year, $840 Million Contract for Renewable Energy
The GSA has signed a 10-year, $840 million contract for 10 million megawatt-hours (MWh) of electricity, which is equivalent to what’s needed for more than 1 million homes annually. This contract was awarded to Constellation, the company that operates the nation’s largest nuclear fleet and recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island.
Nuclear Energy: A Significant Portion of the Contract
According to Constellation spokesperson Paul Adams, nuclear energy makes up approximately 4 million MWh of the contract. This represents a significant portion of the total electricity required by the GSA under this contract.
The Rise of Nuclear Energy in Silicon Valley
Silicon Valley is increasingly turning to nuclear energy to meet the growing demand for electricity from AI data centers. The federal government, which is the nation’s single largest energy consumer, has joined forces with major tech companies like Microsoft and Google to support continued investment in reliable nuclear energy.
A Major Boost for the Nuclear Industry
"This agreement is another powerful example of how things have changed," said Joe Dominguez, Constellation president and CEO. "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."
The GSA’s Administrator, Robin Carnahan, noted that this historic procurement locks in a cost-competitive, reliable supply of nuclear energy. It demonstrates 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.
Constellation: A Leader in Nuclear Energy
Constellation generates 10 percent of the nation’s carbon pollution-free energy. The majority of its output comes from nuclear energy, but it also produces hydro, wind, and solar power. In addition to nuclear power plants, Constellation also generates electricity from gas-fired power plants. However, the company has set a goal of reaching 100 percent carbon-free electricity by 2040.
How Much Electricity Will Come from Each Source?
Constellation and the GSA declined to answer questions about how much of the electricity included in the contract will come from each source aside from nuclear power plants. This lack of transparency raises questions about the composition of the energy mix under this contract.
A Historic Procurement Contract
This is the biggest energy procurement contract the GSA has ever signed. It’s a testament to the growing importance of nuclear energy as a reliable and cost-competitive source of electricity.
The Impact on Government Agencies
Outside of GSA buildings, the deal also extends 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. These government agencies will benefit from a reliable and affordable supply of clean energy.
Locking in More Affordable Prices
The GSA is framing this contract as a way to lock in more affordable prices in the face of uncertainty over future electricity prices and increasing demand for electricity from data centers and AI facilities. By keeping their electricity costs fixed for 10 years, federal agencies will have budgetary stability and protections from future price increases.
A New Era for Nuclear Energy
The GSA’s contract is part of a growing trend towards nuclear energy as a clean and reliable source of electricity. Major tech companies like Google, Meta, Amazon, and Microsoft have all inked splashy nuclear energy deals over the past year.
Microsoft and Constellation’s Partnership
In September 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 energy accident in US history. This partnership is just one example of how major companies are turning to nuclear energy as a reliable source of electricity.
The Biden Administration’s Support for Nuclear Energy
The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels and towards cleaner sources of energy. Last October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan.
Conclusion
The GSA’s contract with Constellation is a major boost for the nuclear industry. It demonstrates how the federal government can support continued investment in reliable nuclear energy and ensure a reliable, affordable supply of clean energy for everyone. As the demand for electricity continues to grow, particularly from AI data centers, nuclear energy is becoming an increasingly important part of the energy mix.
References:
- General Services Administration (GSA) press release
- Constellation press release
- Microsoft and Constellation partnership announcement
