Google Signs 3.59 GW Power Deal with Constellation

Google has signed an agreement to secure 3,590 megawatts of electricity from Constellation Energy on the largest power grid in the United States, according to a Reuters report via MarketScreener. The agreement includes an 890-megawatt, 20-year nuclear power purchase agreement, alongside a separate 2,700-megawatt, 15-year supply agreement.

Under the deal, Constellation will invest more than $4.3 billion to upgrade its reactor fleet in the Midwest and Mid-Atlantic regions, with electricity supply from the first upgraded plant set to begin in 2028. The company notes that the new nuclear power will account for about a quarter of the total supply.

The agreement comes at a time when major tech companies are competing to secure massive amounts of electricity to power the data centers required by artificial intelligence models, renewing interest in nuclear power across the United States. Constellation had previously agreed to restart the Three Mile Island reactor to supply Microsoft's data centers.

Constellation Energy's stock rose more than 13% in Tuesday's trading session following the announcement. Analysts believe long-term contracts provide power producers with stable revenues for decades, in exchange for tech companies securing their growth trajectory without supply interruptions.

What do these terms mean?

Megawatt: A unit of measurement for electrical power; one megawatt equals one million watts and is used to measure the output of power plants. Power Purchase Agreement (PPA): A long-term contract under which a specific entity purchases electricity from a designated producer at a pre-agreed price. Data Centers: Facilities housing servers and computing equipment that run internet services and artificial intelligence, consuming large amounts of electricity.