Google, Constellation Energy Strike Deal for Nuclear Power

Google parent Alphabet Inc. agreed to buy nuclear power from Constellation Energy Corp. in a deal that will spur the addition of 890 megawatts of new reactor capacity. The power producer’s stock soared.

The 20-year power-purchase agreement will drive more than $4.3 billion in investments to upgrade systems at 11 Constellation reactors across the largest US power grid, the companies said in a statement Tuesday, confirming an earlier Bloomberg report. The electricity will start arriving on the grid operated by PJM Interconnection LLC as soon as 2028.

Constellation shares rose as much as 15% in New York, in biggest intraday jump since April, while Alphabet’s stock fell as much as 0.5%.

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The immense amount of electricity required for the artificial intelligence boom is helping to revive interest in nuclear energy, which offers around-the-clock emissions-free power. However, reactors can take a decade or more to build, and the next wave of fission technology is likely years from widespread deployment. Recent deals have focused instead on existing facilities, which already have grid connections and can be upgraded more quickly, an approach known as uprates.

“Existing generation and new uprates are the ‘cheapest,’ cleanest and firmest generation that can be added on the market,” Sunaina Ocalan and Raphael Lee, analysts at Bernstein, wrote in a research note Tuesday.

Amazon.com Inc. struck a similar deal last week with Constellation. The cloud and e-commerce company agreed to buy 690 megawatts of power, including capacity from upgrading the Calvert Cliffs nuclear facility in Maryland. Walmart Inc. also signed a deal in June for Constellation fission power provided in part from improvements at an Illinois nuclear plant.