Microsoft will restart the Three Mile Island nuclear power plant to power its AI data centers

Constellation Energy, the largest nuclear power plant operator in the United States, announced a 20-year power supply contract (PPA) with Microsoft to be produced at the Three Mile Island nuclear power plant in Pennsylvania, infamous for the 1979 Unit 2 accident, the worst of its kind. incident in the entire history of US nuclear energy. As a result of the accident, the second power unit of the nuclear power plant was partially destroyed, but the first power unit was not damaged and operated until 2019.

Due to the unprofitability of the nuclear power plant and the refusal of the state authorities to continue to subsidize its operation, it was finally stopped on September 20, 2019, after which it was transferred to Constellation Energy, which has experience in liquidating nuclear power plants. As part of the agreement, Constellation Energy plans to bring Unit 1 back online by 2028, subject to approval from the U.S. Nuclear Regulatory Commission following a comprehensive safety and environmental review, as well as approvals from other state and local authorities. Constellation Energy will seek a license extension, which will allow the plant to operate until at least 2054.

Image source: Constellation Energy

The planned facility was renamed the Crane Clean Energy Center (CCEC) in honor of Chris Crane, who was the CEO of Constellation’s former parent company and died in April 2024. While full terms of the deal were not disclosed, Constellation Energy said it would need about $1.6 billion to restart its equipment, including the turbine, generator, main power transformer, and cooling and control systems.

The capacity of the restored nuclear power plant will be 837 MW. All the electricity it produces will go to Microsoft. This is enough to power all of the company’s data centers in Pennsylvania, Chicago, Virginia and Ohio. According to a study funded by the Pennsylvania Building Trades Council, reopening the plant would create 3,400 jobs at the site and its service businesses, as well as generate $3 billion in state and federal taxes.

The deal will help Microsoft address its deepening energy problem as the sprawling data centers it needs to power its AI workloads strain the country’s existing energy sources. As noted by the American media, never before has a nuclear power plant in the United States been brought back into operation after decommissioning, and never before has the entire output of one commercial nuclear power plant been supplied to a single customer.

The duration of the agreement with Constellation Energy is significantly longer than Microsoft’s traditional solar and wind offtake agreements. Apparently, the deal has been prepared for a long time. Over the past 12 months, Microsoft has built a nuclear energy team and hired a number of experienced people. Microsoft previously purchased renewable energy credits (CECs) from Canadian utility Ontario Power Generation (OPG) and signed an agreement with Constellation to supply nuclear power to its Boydton data center.

Nuclear energy, which, unlike wind and solar energy, guarantees a stable supply of electricity regardless of the vagaries of the weather, is becoming increasingly popular among hyperscalers. AWS previously purchased the Talen Energy campus near the Susquehanna Steam Electric Station in Pennsylvania for $650 million, which will provide up to 960 MW of data center capacity. Also this month, Oracle announced it would build a 1GW data center campus in the US powered by three small modular reactors (SMRs). And Oklo even signed agreements with several data centers.