Google parent Alphabet Inc. agreed to buy nuclear power from Constellation Energy Corp. in a deal that will spur the addition of 890 megawatts of new reactor capacity. The power producer’s stock soared.
The 20-year power-purchase agreement will drive more than $4.3 billion in investments to upgrade systems at 11 Constellation reactors across the largest US power grid, the companies said in a statement Tuesday, confirming an earlier Bloomberg report. The electricity will start arriving on the grid operated by PJM Interconnection LLC as soon as 2028.
Constellation shares rose as much as 15% in New York, in biggest intraday jump since April, while Alphabet’s stock fell as much as 0.5%.
The immense amount of electricity required for the artificial intelligence boom is helping to revive interest in nuclear energy, which offers around-the-clock emissions-free power. However, reactors can take a decade or more to build, and the next wave of fission technology is likely years from widespread deployment. Recent deals have focused instead on existing facilities, which already have grid connections and can be upgraded more quickly, an approach known as uprates.
“Existing generation and new uprates are the ‘cheapest,’ cleanest and firmest generation that can be added on the market,” Sunaina Ocalan and Raphael Lee, analysts at Bernstein, wrote in a research note Tuesday.
How Trump and Data Centers Are Boosting Nuclear Power: Explainer
Amazon.com Inc. struck a similar deal last week with Constellation. The cloud and e-commerce company agreed to buy 690 megawatts of power, including capacity from upgrading the Calvert Cliffs nuclear facility in Maryland. Walmart Inc. also signed a deal in June for Constellation fission power provided in part from improvements at an Illinois nuclear plant.
With this string of agreements, Constellation now has few additional facilities that could be tapped for similar agreements, company spokesman Paul Adams said Tuesday.
Constellation and Google also agreed to a 15-year energy-supply deal for an additional 2.7 gigawatts of of capacity within PJM, and said they would jointly explore opportunities to develop new generation.
Google already has multiple agreements with atomic power producers. It agreed last year to buy electricity from NextEra Energy Inc., a move that will support the power company’s plans to restart its Duane Arnold reactor in Iowa that has been shuttered since 2020. And last month the tech company lined up new capacity from Southern Co. by funding upgrades at two atomic plants.
Microsoft Corp. agreed to buy the electricity from the shuttered Three Mile Island nuclear plant in 2024. Constellation is planning to restart its reactor at the site in Pennsylvania next year.
While safety risks and heavy cost overruns saw the world sour on atomic energy early last decade, it has been undergoing a global revival over the last few years. As well as surging demand from the tech sector for data centers, nuclear power is being embraced by many nations as a way to cope with a jump in electricity consumption while cutting emissions.
Read More: Amazon Nuke Deal to Help Expand Constellation Maryland Site