Constellation Energy Signs 2GW Nuclear Power Agreement for Data Centre Campus

Constellation Energy has announced a landmark 20-year power purchase agreement to supply 2 gigawatts of nuclear-generated electricity to a planned hyperscale data centre campus in eastern Pennsylvania. The deal, valued at an estimated $35 billion over its lifetime, represents the largest direct nuclear power commitment to the data centre industry to date and marks a fundamental shift in how technology companies approach energy procurement.

The campus, being developed on a 1,200-acre site near the Susquehanna nuclear generating station, will draw power directly from the plant's two 1.3 GW boiling water reactors via a behind-the-meter connection. This arrangement bypasses the congested PJM Interconnection queue that has frustrated data centre developers across the mid-Atlantic region - where wait times for new grid connections now extend 4-5 years. By connecting directly to the generation source, the developer avoids transmission constraints, capacity charges, and the uncertainty of the interconnection process entirely.

The Constellation deal follows a series of nuclear partnerships that have accelerated over the past 18 months. Amazon signed a $650 million agreement with Talen Energy for power from the Susquehanna plant in 2024, securing 960 MW of capacity for a data centre campus adjacent to the station. Microsoft has been the most aggressive, pursuing both existing nuclear agreements and next-generation technology - the company has invested in small modular reactor (SMR) development partnerships and signed PPAs with nuclear operators in multiple states. Google has taken a different approach through its partnership with Fervo Energy, targeting 150 MW of enhanced geothermal capacity by 2028 as a zero-carbon baseload alternative to nuclear.

The appeal of nuclear for data centre operators is straightforward: it provides 24/7 baseload power with zero carbon emissions. Unlike solar (which generates only during daylight hours) or wind (which is intermittent), nuclear plants operate at 90%+ capacity factors year-round. For AI training workloads that run continuously for weeks or months, this reliability is essential. A single nuclear reactor typically generates 1,000-1,400 MW - enough to power a large hyperscale campus indefinitely without seasonal variation or weather dependence.

However, the agreement has reignited significant regulatory debate. The PJM Interconnection, which manages the power grid serving 65 million people across 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and DC), has raised concerns about diverting 2 GW of generation capacity to a single customer. PJM's reliability planning models assume that nuclear generation is available to serve the broader grid during peak demand periods. Removing 2 GW from the shared grid could necessitate additional generation capacity to maintain reliability margins - costs that would ultimately be borne by other ratepayers.

Consumer advocacy groups and state utility commissions in Pennsylvania and neighboring states have also raised objections. The concern is that large technology companies, with their ability to sign multi-billion-dollar PPAs, are effectively pricing residential and small business customers out of access to the cheapest, cleanest electricity available on the grid. Several state attorneys general have filed comments with FERC (the Federal Energy Regulatory Commission) requesting review of behind-the-meter arrangements that effectively privatize public generation assets.

Despite the regulatory headwinds, the trend toward nuclear-powered data centres appears irreversible. NuScale Power, the first company to receive NRC design certification for an SMR, has signed letters of intent with multiple data centre developers. TerraPower, backed by Bill Gates, is developing a 345 MW sodium-cooled reactor in Kemmerer, Wyoming, with data centre operators among its target customers. Kairos Power is building a demonstration reactor in Tennessee. The Department of Energy has projected that 200 GW of new nuclear capacity may be needed in the US by 2050 to meet climate and electrification goals - and data centres are expected to be the anchor tenants that make new nuclear construction economically viable.

For the data centre industry, the nuclear question represents a broader strategic shift from being consumers of grid electricity to becoming direct participants in the energy generation market. This vertical integration - where technology companies own or control their power supply from generation through consumption - mirrors the historical pattern of other energy-intensive industries like aluminum smelting and steelmaking. The companies best positioned to secure reliable, affordable, carbon-free power at scale will hold a decisive competitive advantage as energy availability becomes the primary constraint on data centre growth.