Constellation Energy has partnered with Microsoft to establish a groundbreaking power supply agreement that will facilitate the reopening of the Three Mile Island nuclear plant in Pennsylvania. This marks the first instance of a nuclear energy facility in the U.S. being restarted after closure, a significant development reflecting the increasing energy demands of data centers, particularly those harnessing artificial intelligence.
Shares of Constellation surged by 13% shortly after news of the deal emerged. The agreement encompasses the revival of Unit 1 at Three Mile Island, which ceased operations in 2019 for operational reasons. Notably, Unit 2, which experienced a partial meltdown in 1979—infamously becoming the site of the most notable nuclear incident in U.S. history—will remain offline.
Constellation plans to invest approximately $1.6 billion into upgrading the plant, with hopes of bringing it back online by 2028, pending the necessary regulatory approvals. Under the terms of the agreement, Microsoft will secure energy from the facility for a duration of 20 years, with the plant expected to generate 835 megawatts of power to meet its operational needs.
The push for the Three Mile Island unit’s restart comes as organizations look towards nuclear power as a sustainable, low-carbon solution to meet growing electricity requirements. Influential tech leaders, including OpenAI CEO Sam Altman and Microsoft co-founder Bill Gates, have been advocates for nuclear energy, emphasizing its potential in addressing the escalating power demands of data centers.
Altman actively promotes advancements in nuclear energy through his leadership role at Oklo, a nuclear startup that recently went public, while Gates’ company, TerraPower, has also undertaken initiatives to develop new nuclear facilities.
According to the Energy Information Administration, nuclear power contributed about 18.6% of the total U.S. electricity generation last year, underscoring its crucial role in the nation’s energy landscape. However, there is growing scrutiny regarding power supply agreements involving AI data centers. A similar contract struck between Talen Energy and Amazon has faced challenges from electric utility groups, asserting potential risks of cost hikes for consumers and threats to grid reliability.
While financial details surrounding the Microsoft and Constellation agreement have not been disclosed, the commitment symbolizes a pivotal shift in the nuclear energy conversation, positioning such facilities as key players in the sustainable energy movement.