Constellation Energy has entered into a transformative 20-year power purchase agreement with Microsoft, aimed at reviving the Three Mile Island nuclear plant in Pennsylvania. This strategic move is intended to provide the technology giant's data centers with a sustainable source of carbon-free energy.
The Three Mile Island Unit 1 reactor, which was shut down in 2019 due to economic issues, will be restarted under this groundbreaking deal. Under the terms of the agreement, Microsoft will procure energy generated from the reactivated plant. Following the announcement, shares of Constellation surged by 14% on Friday, while Microsoft experienced a slight decrease of 0.7%.
The facility will be rebranded as the Crane Clean Energy Center and is set to commence operations in 2028. Constellation Energy is investing approximately $1.6 billion into the restoration of the facility, without seeking assistance from state or federal sources, according to a spokesperson's statement to MT Newswires. Constellation aims to renew the plant’s operating license to extend its functionality until at least 2054.
Bobby Hollis, Vice President of Energy at Microsoft, highlighted the significance of the agreement, stating, "This agreement is a major milestone in Microsoft's efforts to help decarbonize the grid in support of our commitment to become carbon negative." The revitalization of the Three Mile Island plant is projected to create 3,400 direct and indirect jobs, contributing over 800 megawatts of carbon-free electricity to the electrical grid.
This projection comes from a recent study commissioned by the Pennsylvania Building and Construction Trades Council, which was referenced by both companies. Additionally, the reopening of the plant is expected to inject $16 billion into Pennsylvania's gross domestic product and generate over $3 billion in state and federal tax revenues, as noted by the companies, drawing from the findings of the mentioned report. Joe Dominguez, CEO of Constellation Energy, commented, "Before it was prematurely shuttered due to poor economics, this plant was among the safest and most reliable nuclear plants on the grid, and we look forward to bringing it back with a new name and a renewed mission to serve as an economic engine for Pennsylvania." As the energy sector continues to evolve, partnerships like this one between technology firms and energy providers are vital for addressing climate change and enhancing energy security..