Constellation Energy shares advance on 20-year nuclear deal with Google
Gemini AI will help Constellation, the largest U.S. nuclear operator, to plan power plant operations
Google will power its data centers with electricity from Constellation nuclear power plants / Photo: Constellation Energy
Google and Constellation Energy on Tuesday announced a 20-year power purchase agreement that will support more than $4.3 billion in investment. The deal calls for 890 megawatts of additional generating capacity at several U.S. nuclear plants. Constellation Energy shares jumped 13% following the announcement.
Details
The deal with Alphabet will allow Constellation Energy to add capacity at six operating nuclear plants in Illinois, New Jersey, and Pennsylvania, which will be upgraded, the company said. The work will include modernizing turbines, steam generators, and digital control systems.
Google says the agreement will provide Constellation with the revenue certainty needed to make upgrades to 11 of its reactors. At the same time, the additional costs associated with the AI boom will not be passed on to electricity customers, Google highlighted.
Under an expanded five-year technology agreement, Constellation will use Google Cloud and Gemini AI for tasks including selecting sites for energy facilities, modeling power flows, preparing permit applications, and planning grid connections, as well as monitoring equipment health, managing reactor outages for maintenance, and protecting critical energy infrastructure.
Constellation Energy shares have surged 13.9% on Tuesday following Bloomberg’s report on the deal, reaching $304.80 apiece, their highest level since May 8. Alphabet shares are up 0.25% as of this writing.
Context
Google is also backing nuclear projects involving Georgia Power in the state of Georgia, NextEra Energy in Iowa, and Kairos Power and TVA in Tennessee. The largest tech companies are increasingly turning to nuclear power to meet growing electricity needs amid the massive buildout of AI infrastructure, Yahoo Finance writes.
Other hyperscalers are also locking up available power supplies from energy companies. In January, Amazon signed its own nuclear power agreement with Constellation, while Microsoft entered into a 20-year contract with the company in 2024. Under the latter agreement, Microsoft will receive electricity from one of Constellation’s previously shuttered reactors at Three Mile Island, which is due to restart by 2028. Amazon also signed an agreement in 2024 to develop and build low-capacity small modular reactors. Meta is betting on nuclear power, as well: the company has signed a 20-year agreement to purchase electricity from Vistra’s nuclear plants.
