Key points
- Google signed a 20-year deal for power from nuclear upgrades
- Constellation plans to add 890 MW across 11 reactors
- A separate agreement covers 2,700 MW from existing plants
Google (GOOGL) agreed to buy power for 20 years from upgrades to 11 Constellation Energy (CEG) nuclear reactors, the companies announced on Oct. 6. Constellation plans to invest more than $4.3 billion to add 890 megawatts of capacity, with the first upgrade expected by 2028.
The work would increase output at six existing nuclear sites in Illinois, Pennsylvania and New Jersey. Known as uprates, the upgrades involve replacing equipment such as turbines, steam generators and digital control systems. Constellation says the additional capacity would equal the output of a large conventional reactor.
The electricity would feed into the PJM grid. "Our agreement with Constellation to fund nuclear reactor uprates will strengthen the PJM grid, which serves 67 million people, all while protecting energy affordability and supporting local union jobs," said Amanda Peterson Corio, Google's global head of energy and power.
Most of the 3.6 GW comes from existing plants
A separate 15-year agreement covers 2,700 megawatts from Constellation's existing PJM fleet. Constellation says the financial arrangement supports those plants continuing to supply the regional market.
Together, the agreements cover about 3.6 gigawatts, but only 890 megawatts, roughly a quarter, would be new capacity. Bloomberg reported on Oct. 5 that the deal was worth more than $1 billion. The companies haven't disclosed Google's payment terms.
Constellation shares jumped before the open
Constellation shares traded at $289.84 at 8:54 a.m. Eastern on Oct. 6, up 8.3% from their Oct. 5 close of $267.62. Vistra (VST) was up 4.1% and Talen Energy (TLN) 4.8% in premarket trading, and Alphabet was up 0.4%.
On Oct. 5, Vistra won a conditional commitment for up to $4.2 billion in federal loans for its own nuclear uprates. On Sept. 30, Constellation announced a 20-year agreement with Amazon (AMZN) that adds 190 megawatts of nuclear capacity at its Calvert Cliffs plant in Maryland.
Google is also selling AI to Constellation
Under an expanded five-year technology agreement, Constellation will build Google Cloud and Gemini Enterprise tools into its operations. The first uses include site selection, interconnection planning, outage management and securing the networks that run its plants.
The companies presented the deal as a response to PJM's "Bring Your Own Power" proposal and a model for how big power users can add new supply as their demand grows. They say the arrangement would add power to PJM without passing the costs to residential customers.
