Energy of the constellations plans to restart the Three Mile Island nuclear power plant and sell the electricity to Microsoft, demonstrating the tech sector’s immense energy needs as it builds data centers to support artificial intelligence.
Constellation plans to return the Unit 1 reactor at Three Mile Island, near Middletown, Pennsylvania, to service in 2028, subject to approval by the Nuclear Regulatory Commission, the company said Friday. Constellation also plans to apply for an extension of the plant’s operations through at least 2054.
Constellation shares jumped about 22% Friday to close at $254.98 per share. The stock price has more than doubled since the start of the year.
Microsoft Constellation will purchase electricity from the plant as part of a 20-year agreement to offset the energy consumption of its data centers with carbon-free energy. Constellation described the deal with Microsoft as the largest power purchase agreement ever signed by the nuclear plant operator.
“The decision here is the most powerful symbol of the renaissance of nuclear power as a clean, reliable energy resource,” Constellation CEO Joe Dominguez told investors on a call Friday morning.
Unit 1 shut down in 2019 as nuclear power struggled to compete economically with cheap natural gas and renewables. It is separate from the reactor that partially melted down in 1979 in the worst nuclear accident in U.S. history.
Constellation will rename the plant the Crane Clean Energy Center. The facility is named for Chris Crane, who was CEO of Constellation’s former parent company and died in April.
Constellation will invest $1.6 billion to restart the plant by 2028, including in nuclear fuel, Chief Financial Officer Dan Eggers told investors on the call.
Technology in search of nuclear power
Data center electricity demand is expected to increase in the coming decades as the tech industry accelerates artificial intelligence, threatening to strain the power grid. While estimates vary, Goldman Sachs predicts that data centers will consume 8% of total U.S. electricity demand by 2030, up from 3% today.
Electricity demand is also increasing due to the expansion of domestic production and the adoption of electric vehicles. Rystad Energy predicts that data centers and electric vehicles alone will add 290 terawatt hours of electricity demand by the end of the decade, equivalent to Turkey’s entire consumption.
Tech companies are turning to nuclear power to meet this growing demand for electricity while meeting their climate goals. In March, Amazon Web Services purchased a data center campus in Let’s talk energy which will be powered by the Susquehanna nuclear plant, also in Pennsylvania, in a first-of-its-kind deal. Oracle recently announced that it is designing a data center that will be powered by three small nuclear reactors.
Bipartisan support from federal and state governments for reviving the nuclear industry after a decade of reactor shutdowns is growing.
Three Mile Island would be the second nuclear power plant to restart in U.S. history. The Palisades nuclear plant in Michigan would be the first, expected to resume operation in late 2025.
Restart the process
Constellation expects the NRC to complete the assessment of Three Mile Island in 2027, Eggers said. The assessment includes a safety and environmental impact study.
“Based on our expertise in plant licensing and regulatory processes and through observation of the Palisades restart, we are very confident that we will be able to restore the plant’s operational licensing authority to the same state it was in prior to the 2019 shutdown,” Eggers said.
The nation’s largest grid operator, PJM Interconnection, will also have to assess Three Mile Island’s impact on the grid before the nuclear plant can restart, Eggers said. Constellation plans to submit an application for grid interconnection to PJM next year, the official said.
Eggers said the plant could potentially restart earlier than planned if PJM adopts changes that accelerate interconnection requests to address tighter electricity supply in the 13-state, mostly mid-Atlantic region that the grid operator serves.
“In this renaissance, we see the most powerful sign yet that America will turn to the enduring promise of nuclear energy, an old and faithful ally that is renewed and ready to light the way forward,” Dominguez said.
