Hyperscalers Like Microsoft Are Far Better Customers for Nuclear Energy
Microsoft and the companies making AI data centers will be great customers for nuclear energy. Barrons reports that Microsoft is paying double the price for the Three Mile island nuclear electricity as the going commercial rates. This is about $130 per megawatt hour. An 835 megawatt reactor at 92% capacity factor would generate about 6.6 million megawatt hours in year. This will be the $860 million per year for 20 years.
Constellation has contracted with Constellation for the energy from restarting Three Mile Island Unit 1. Microsoft has struck a 20-year deal with Constellation to draw power from what was once the Three Mile Island Nuclear Generating Station on the Susquehanna River in Londonderry Township, near Harrisburg.
The revamped Three Mile Island unit, set to operate in 2028, would add 835 MW of energy over 20 years to the area grid operated by PJM Interconnection to match power used by the Microsoft data centers.
Constellation purchased TMI Unit 1, in 1999. Before it was retired prematurely for economic reasons in 2019, the plant had a generating capacity of 837 megawatts, which is enough to power more than 800,000 average homes. In its last year of operation, the plant was producing electricity at maximum capacity 96.3 percent of the time – well above the industry average.
The BG2 Venture Capitalists (Brad Gerstner and Bill Gurley) describe how the Hyperscalers (Amazon, Google, Meta, Microsoft and Tesla) are far better customers for nuclear energy. The utilities have low risk tolerance and move slowly. The Hyperscalers have trillions in funds and will aggressively buy nuclear power from restarting reactors and for new small modular reactors.