Data centers core to nuclear

Meta's newly inked 20-year agreement to buy nuclear power from Constellation Energy is the latest sign of data center operators' deepening reliance on reactors.

Why it matters: It follows a series of nuclear energy agreements and solves some of the issues surrounding how much electricity AI and data centers will require.

Driving the news: The deal is Meta's first involving nuclear energy.

• The 1.1 GW agreement calls for Meta to buy all the electricity generated by Constellation's Clinton Clean Energy Center in central Illinois, supporting the site's sole reactor through 2047.
• It forestalls plans to retire the plant in 2027.

The fine print: Energy from the plant's reactor will continue to supply about 800,000 homes on the regional grid and support Meta's planned data center operations in the area.

By the numbers: Peak electricity demand in the U.S. is expected to soar 150 GW by 2030, a 20% leap in less than five years largely driven by AI and data centers.

• Some groups have projected that efficiency gains will mitigate that demand growth, if only modestly.

Between the lines: The nuclear industry has grappled with aging reactors and an aging workforce for years, but the demand from tech firms has provided opportunity.

• Constellation Energy last year signed a 20-year power deal with Microsoft to restart a dormant 835 MW reactor at Three Mile Island in Pennsylvania.
• Amazon is seeking to connect a 960 MW data center campus with Talen Energy's Susquehanna nuclear power plant, also in Pennsylvania.

📈 Follow the money: Constellation Energy's stock jumped initially on the deal and is trading near $315, up about 28% from last month, and 52% from last year.

Nuclear power plants, when they're already operational, are among the cheapest sources of electricity.

💭 Alan's thought bubble: A question mark hangs over deals for tech firms to buy power from unbuilt, next-generation nuclear plants that promise an initial high price tag.

• These include Microsoft's deal with fusion developer Helion, Google's agreements with small reactor startup Kairos Power and lightwater reactor developer Elementl, and Meta's search for up to 4 GW of power from advanced reactors.