Meta, Constellation Energy Sign 20-Year Nuclear Power Deal for AI Operations

Meta Platforms and Constellation Energy, the largest nuclear power operator in the United States, have entered into a 20-year power purchase agreement. This deal is driven by the escalating demand for electricity to power artificial intelligence operations, and it is expected to provide Meta with a stable and clean energy source, which is essential for its data centers that require continuous operation.

The agreement involves Constellation Energy supplying power from the Clinton Nuclear Power Station in Illinois to Meta. The terms of the deal suggest that Meta will pay approximately $80 per megawatt-hour for the energy. This price is notably lower than the $110 per megawatt-hour that Microsoft paid for power from the Three Mile Island Nuclear Power Station in Pennsylvania. Both nuclear power stations are operated by Constellation Energy.

The difference in pricing can be attributed to the operational status of the nuclear power stations. The Three Mile Island Nuclear Power Station had to restart one of its reactors, which was shut down in 2019 due to economic reasons. The cost of restarting this facility is estimated to be around $1.6 billion. In contrast, the Clinton Nuclear Power Station is already in normal operation, making it a more cost-effective option for Meta.

Constellation Energy's CEO, Joe Dominguez, highlighted that these contracts represent a "fair price for reliable clean energy," although he did not provide further details. The agreement also includes plans for Constellation to invest in enhancing the power generation capacity of the Clinton Nuclear Power Station. Additionally, the company is considering the construction of a new reactor at the same site, which has already received federal approval for a second unit.

The move by tech giants like Meta and Microsoft to invest in nuclear power underscores their commitment to achieving ambitious climate goals while meeting the increasing energy demands of AI operations. Nuclear power, despite being more expensive than fossil fuel-based electricity, is seen as a viable solution for providing stable, carbon-free energy. This is particularly important for data centers that require continuous power supply, as renewable sources like wind and solar energy are not always available around the clock.

Michael Polsky, CEO of an independent energy developer, emphasized the need to recognize the higher costs associated with nuclear energy. He stated that nuclear power will be more expensive than natural gas, and if the future includes nuclear energy, its higher costs must be acknowledged.

The agreement between Meta and Constellation Energy is a significant step in the transition towards cleaner and more reliable energy sources for the tech industry. It sets a new precedent for power pricing in the AI era, demonstrating the value of stable, carbon-free energy in supporting the growing demands of advanced technologies. This deal not only highlights the strategic importance of nuclear power in the energy landscape but also underscores the industry's shift towards sustainable and reliable energy solutions.