News

Microsoft's Datacenter Energy Proposal Would Revive Part of Three Mile Island

• By John K. Waters
• September 23, 2024

If approved, a landmark energy agreement between Microsoft and Constellation Energy would reopen a unit of the Three Mile Island nuclear plant to provide power to Microsoft datacenters.

Critical regulatory approvals remain pending, the companies announced on Friday. If the deal passes muster, it would trigger the first-ever restart of its kind in U.S. nuclear history.

With the rise of AI and the ongoing enterprise move to the cloud, Big Tech companies like Microsoft are facing unprecedented power demands. Nuclear energy, which is nearly carbon-free and broadly considered more reliable than renewable sources, such as wind and solar, is increasingly seen as an attractive solution for uninterrupted power needs and meeting climate pledges.

"This agreement is a major milestone in Microsoft's efforts to help decarbonize the grid in support of our commitment to become carbon negative," said Bobby Hollis, Microsoft’s vice president of energy, in a statement.

Although the deal sets the stage for Unit 1 of the Three Mile Island facility to be restarted, federal, state and local approvals are still required, and Constellation has yet to file a formal application with the Nuclear Regulatory Commission (NRC). The review process is expected to be completed by 2027, with Constellation planning to spend $1.6 billion on the project.

The plant is slated to provide 835 megawatts of electricity, enough to power approximately 700,000 homes by 2028.

"This is a billion-dollar bet on nuclear energy as a reliable and sustainable power source," said Joe Dominguez, CEO of Constellation Energy, adding that nuclear power plants are the only energy sources capable of consistently meeting the needs of growing technologies like AI.

Unit 2, which suffered a partial meltdown in 1979 in one of the country’s most infamous industrial accidents, will not be restarted.

Microsoft has been increasingly investing in clean energy to power its expanding datacenters. In addition to the Constellation deal, the tech giant has signed a power purchase agreement with Washington-state fusion company Helion, which aims to bring a fusion power plant online by 2028. Microsoft co-founder Bill Gates and OpenAI CEO Sam Altman have also championed nuclear as a solution to rising energy demands.

The nuclear power sector has gained renewed support, particularly from tech companies looking to reduce their carbon footprint while securing stable energy supplies. However, the power purchase agreements between tech firms and nuclear facilities are also facing scrutiny. A similar deal between Talen Energy and Amazon has been challenged over concerns it could raise costs or affect grid reliability.

The financial terms of the Microsoft-Constellation agreement were not disclosed.