Constellation Energy has announced plans to restart the Three Mile Island nuclear plant and will sell the power generated to Microsoft. This move highlights the substantial energy demands of the technology sector as it continues to expand data centers to support artificial intelligence.
The company expects the Unit 1 reactor at Three Mile Island, located near Middletown, Pennsylvania, to resume operations in 2028, pending approval from the Nuclear Regulatory Commission (NRC). They also intend to seek an extension for the plant’s operations until at least 2054.
Following this announcement, Constellation’s stock surged by approximately 22%, closing at $254.98 per share, more than doubling its value year to date.
Microsoft has entered into a 20-year agreement to purchase electricity from the plant to match the energy consumption of its data centers with carbon-free power. Constellation described this agreement as the largest power purchase agreement it has ever signed with a nuclear plant operator.
Joe Dominguez, CEO of Constellation, highlighted that this decision symbolizes the resurgence of nuclear power as a clean and reliable energy resource.
Unit 1 of Three Mile Island has been inactive since 2019 due to economic challenges posed by cheaper natural gas and renewable energy sources. This unit is separate from the reactor involved in the 1979 partial meltdown, which is noted as the most severe nuclear accident in U.S. history.
The plant will be renamed the Crane Clean Energy Center in honor of Chris Crane, the former CEO of Constellation’s parent company, who passed away in April. Constellation plans to invest $1.6 billion in restarting the plant by 2028, which includes expenditures on nuclear fuel, as disclosed by Chief Financial Officer Dan Eggers.
The demand for electricity from data centers is expected to increase significantly over the coming decades as the tech sector intensifies use of AI, posing potential strains on the electric grid. Goldman Sachs estimates that data centers will account for 8% of total U.S. electricity demand by 2030, up from the current 3%.
Increased demand for power is also anticipated from expanding domestic manufacturing and the adoption of electric vehicles. Rystad Energy forecasts that data centers and electric vehicles will collectively add 290 terawatt hours of electricity demand by the end of the decade, an amount comparable to the entire consumption of Turkey.
Tech companies are increasingly turning to nuclear power to meet their growing electricity needs while maintaining their climate commitments. Amazon Web Services recently acquired a data center campus in Pennsylvania from Talen Energy, which will be powered by the Susquehanna nuclear plant. Oracle has announced plans to design a data center powered by three small nuclear reactors.
There is growing bipartisan support from federal and state governments to rejuvenate the nuclear industry, following a decade of reactor shutdowns. Three Mile Island would be the second U.S. nuclear plant to restart operations, following the Palisades nuclear plant in Michigan, which is expected to return to service by the end of 2025.
Constellation anticipates the NRC to complete its review of Three Mile Island by 2027, which includes a safety and environmental impact assessment. Eggers expressed confidence in restoring the plant’s operational licensing to its state before the 2019 shutdown.
PJM Interconnection, the nation’s largest grid operator, will also need to review the plant’s impact on the grid. Constellation plans to submit a grid interconnection request to PJM next year. Eggers suggested that the plant could potentially restart earlier if PJM expedites the interconnection process to address tightening power supplies in its 13-state region.
Dominguez emphasized this development as a powerful indicator of America’s renewed reliance on nuclear energy as a dependable source of power for the future.
