Google and Constellation Energy sign 3.6-GW US power deal
Google has secured a contract for 3,590 megawatts of power from Constellation Energy within the largest power grid in the United States, with approximately 25% of that supply derived from new nuclear energy, as announced by the companies on Tuesday. Constellation will allocate over $4.3 billion toward new investments in its fleet as part of the agreement, which entails increasing capacity at various nuclear reactors operated by the power company in the Midwest and Mid-Atlantic regions, according to the companies involved. Major tech companies are competing to secure substantial electricity supplies to power data centers throughout the US by entering into unprecedented power agreements and revitalising the nation’s nuclear sector. Over the past two years, Constellation announced a deal to reactivate its Three Mile Island reactor in Pennsylvania to supply power to Microsoft data centers, while Google secured a contract to restart NextEra Energy’s nuclear power plant in Iowa.
In the most recent development, Google has secured a 20-year power purchase agreement for 890 megawatts of electricity sourced from various Constellation-owned nuclear power facilities, which are set to undergo upgrades aimed at enhancing electricity production from the current reactors. The companies indicated that electricity from the initial upgraded plants is anticipated to commence delivery in 2028. Google has secured a 15-year supply agreement for an additional 2,700 megawatts of power from Constellation within the PJM power grid. According to Google, that power is not linked to a particular generation source and provides long-term revenue certainty for Constellation’s operating plants. Shares of Constellation experienced an increase exceeding 13 percent on Tuesday, reaching $304.04 by mid-morning. Maryland-based Constellation stands as the largest operator of nuclear power plants in the United States, possessing a significant portfolio of natural-gas-fired power plants and geothermal energy, a result of its recent acquisition of electricity producer Calpine Corp earlier this year.
“We’re committed to meeting our growth responsibly by actively investing in clean, reliable power that brings new capacity to our nation’s grids,” said Amanda Peterson Corio. The 11 nuclear units anticipated for enhancement under the agreement with Google are located in Illinois, Pennsylvania, and New Jersey, situated within the boundaries of the largest electric grid in the United States – PJM Interconnection. Rising electricity demand, primarily fuelled by the expansion of data centers, has resulted in a more than 11-fold increase in PJM capacity prices since 2024, creating a power shortfall within the grid. In response, PJM management has proposed that data center customers connected to the 13-state grid must either supply their own power or risk being disconnected from grid power remotely during periods of peak demand. The agreement between Google and Constellation emerges as a direct response to PJM’s “bring your own power” proposal.
It also establishes a “practical model for how major power consumers can expand new supply alongside growing operational requirements, without state or federal mandates,” the companies stated. Google and Constellation have established a strategic framework that can be replicated to advance power generation, battery storage, and a flexible power use model referred to as “demand response” in various regions across the US, according to the companies. Joe Dominguez said the arrangement with Google is a “model for how technology companies and the energy industry can work together to responsibly develop the digital economy and invest in our nation’s energy infrastructure in a way that delivers grid-wide benefits for all, funded by private entities.”
