Utility signs ‘largest-ever’ deal with Microsoft to power data centres
US-based utility Constellation Energy has announced the signing of a power purchase agreement with Microsoft, a 20-year deal that will also restart the long-shuttered Unit 1 of the Three Mile Island nuclear power station in Pennsylvania, the company said in a statement.
The 819-MW Three Mile Island-1 (TMI-1) pressurised water reactor unit was shut down in 2019 over economic concerns. The unit was first connected to the grid in 1974.
Constellation said TMI-1 will be brought back online under the deal with Microsoft as the tech company wants to use energy from the plant to fill the power consumption of its data centres with carbon-free sources.
Constellation said that apart from adding approximately 835 MW of carbon-free energy to the US grid, a restart of TMI-1 would create 3,400 jobs, contribute over $3bn (€2.69bn) in state and federal taxes, and add an expected $16bn to Pennsylvania’s gross domestic product.
The company said that in order to prepare for the restart, it will make significant investments in key infrastructure, including the turbine, generator, and cooling systems.
The plant, expected to be operational by 2028, will also undergo US Nuclear Regulatory Commission safety reviews and state-level permit approvals. A separate license renewal will allow operations to continue through 2054, said Constellation.
According to Constellation, a recent poll has shown strong public support for the TMI-1 restart, with more than two-thirds of Pennsylvanians in favour of the move.
"This critical step forward will ensure Pennsylvania has sufficient baseload power to meet its needs for decades," said US Congressman Scott Perry.
Microsoft’s Bobby Hollis, vice president for energy, called the deal a "major milestone" in the company’s commitment to decarbonising the grid and advancing carbon-free energy technologies.
Constellation said it acquired TMI-1 in 1999, and before its closure, the plant generated enough electricity to power over 800,000 homes, operating at peak capacity about 96% of the time, "well above industry averages".
The company’s plans include renaming the TMI-1 plant to the Crane Clean Energy Centre, in honour of Chris Cane, who was a former long-standing chief executive of Exelon Energy* and passed away earlier this year.
Constellation is the largest US nuclear operator with a fleet of 21 commercial nuclear reactor units at 14 sites.
The Three Mile Island nuclear station, near Harrisburg in Pennsylvania, houses a second reactor units (TMI-2) which only operated for approximately six months before suffering a partial meltdown and reactor core damage during an accident on 28 March 1979 and was never restarted again.
Constellation said TMI-1 is a “a fully independent facility” and its long-term operation was never impacted by the Unit 2 accident. The company said TMI-2 is in the process of being decommissioned by its owner, Energy Solutions.
*In 2022, Constellation split from Exelon Energy, which it had merged in 2012
