Constellation Energyintends to bring back the Three Mile Island nuclear plant and will sell the power to Microsoft to show how much electricity the tech industry demands as it builds data centers for artificial intelligence.
Constellation has expected the Unit 1 reactor at Three Mile Island near Middletown, Pennsylvania, to be online in 2028 based on the authorization of the Nuclear Regulatory Commission, as the company said on Friday. Constellation is also expected to seek the required permit in a bid to have the plant running for at least 2054.
Constellation’s stock went up more than 9 percent in the early trade.
Microsoftprocure electricity from the plant in a long-term PPA for the next 20 years to offset the energy that its data centers demand with clean electricity. According to Constellation, the deal with Microsoft is the biggest power purchase agreement that the nuclear plant operator has signed yet.
This decision is perhaps the most iconic one indicating the restoration of the use of nuclear power as a clean and efficient source of energy,” Constellation CEO Joe Dominguez said to investors during the call on Friday morning.
Constellation Energy to restart Three Mile Island: Unit 1 of the San Lorenzo plant became unprofitable for operation in late 2019 as nuclear power failed to match the price of natural gas and renewable energy sources. It is distinct from the reactor that partially melted in 1979 in the most unfortunate nuclear accident in United States history.
Constellation will rebrand the plant as the Crane Clean Energy Center. The plant is named after Chris Crane, who has been CEO of Constellation’s former parent company and died in April this year.
Constellation will invest $1.6 billion on restarting the plant through 2028, including on nuclear fuel, Chief Financial Officer Dan Eggers said to investors during a call on Friday.
Tech hunts for nuclear
A high electricity demand is likely to be realized in the coming decades due to information technology, which is driving AI, a development that poses a challenge to the electric grid in the United States. However, according to Goldman Sachs, while data centers currently account for 3% of the total electricity consumption in the US, estimations predict that it will reach 8% in 2030.
They are also increasing due to rising domestic industrialization and increased use of electric cars, among other factors. Employing just data centers and electric vehicles, Rystad Energy has predicted that electricity demand will reach 290 TWh by the end of the decade, which is the same as Turkey’s current consumption level.
While the global electricity demand rises, tech giants are looking for nuclear power to generate it while remaining greener. In March, Amazon Web Services reported an increase in data processed in the cloud by 39 percent.
Purchased a data center campus from AES (Talen Energy Corporation).
That will get its power from the Susquehanna nuclear plant in Pennsylvania, which is a trend-setting move. Oracle
recently said it is planning to build a data center that will be fueled by three mini-nuclear reactors.
The federal and state governments are increasingly coming up with bipartisan measures to rekindle the nuclear industry after an upsurge in reactor closures over the last decade.
The Three Mile Island would be the second nuclear plant to restart operations in U.S. history. The first of these would be the Palisades nuclear plant in Michigan, and the company expects it to go back online by December 2025.
Restart process
Three Mile Island is expected to be reviewed by the Nuclear Regulatory Commission in 2027, according to Eggers of Constellation. The safety and environmental impact study is also part of the review.
“Given our subject matter expertise in plant licensing and regulatory processes and by monitoring the Palisades restart, we have very low risk in asserting that we will be able to regain the operational licensing authority of the plant to the state they were before shutdown in the year 2019,” said Eggers.
PJM Interconnection LLC, the nation’s largest grid operator, will also have to re-visit the effects of Three Mile Island on the grid before the nuclear power plant restart, Eggers also noted. As for grid interconnection, the executive said Constellation intends to file a request to a PJM system next year at the earliest.
Eggers said the plant could potentially restart earlier than expected if only PJM accepts changes that hasten interconnection processes to contain the growing power shortages in the 13-state Mid-Atlantic area that the grid operator covers.
“In this rebirth, we have the most powerful indication that America will turn to the eternal promise of nuclear energy, a tried and true companion that is reborn and ready to guide the way again.” Dominguez.