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U.S. government secures 10-year clean energy supply: Nuclear powerhouse Constellation (CEG.US) lands $1 billion deal

AInvestThursday, Jan 2, 2025 8:31 pm ET
1min read

Constellation Energy (CEG.US) on Thursday announced it had secured a $1bn contract to supply nuclear power to the US government over the next decade, a record deal that marks one of the largest energy purchases in the General Services Administration's history and the first major energy agreement focused on climate change that covers existing nuclear reactors.Under the deal, Constellation will supply electricity to more than 13 federal agencies, with a total generation of more than 10bn megawatt hours over 10 years, enough to power more than 1m households a year.The procurement will cover 80 federal facilities in the PJM interconnection network, including the Department of Transportation, the Federal Reserve and the US Army Corps of Engineers, and will serve more than 65m people, according to the company.The nuclear industry had shrunk amid safety and radioactive waste disposal costs, but the sector was reinvigorated last year as technology companies and government agencies sought carbon-free power to meet energy demands.Joe Dominguez, chief executive of Constellation, said the deal showed the industry's shift and allowed the company to extend reactor licenses, invest in new equipment and technology, and expect an increase of about 135mW of generation.The GSA stressed that the contracts would provide budget stability for federal agencies, keeping electricity costs unchanged for 10 years, and address price uncertainty and the growing power needs of data centers and artificial intelligence facilities.Robin Kanter, the agency's administrator, said the deal showed the federal government's cooperation with corporate clean energy buyers to drive new nuclear capacity and ensure reliable, affordable clean energy supply.Notably, $840m of the contract is for electricity supply, $172m for energy efficiency work, including weatherization of federal buildings and LED lighting expansions, and four Washington buildings will convert from steam systems to electric boilers and heat pumps to improve energy efficiency.

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