Meta Platforms has signed a 20-year agreement to purchase power from Constellation Energy’s Clinton nuclear plant in Illinois, starting in mid-2027.

The deal is designed to support Meta’s increasing electricity needs driven by AI operations.

The contract will supply Meta with 1,121 megawatts of electricity once a state subsidy for the plant expires.

Constellation plans to invest in increasing the plant’s output and is considering adding another reactor, as federal approval for expansion has already been secured.

Joe Dominguez, CEO of Constellation, mentioned that discussions are ongoing regarding the potential construction of new assets at the Clinton location.

This agreement marks a turning point for the Clinton plant, which faced possible closure in 2017 due to competition from cheaper energy sources. It remained operational after receiving a state subsidy.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Nuclear plants’ dramatic economic turnaround fueled by AI’s hunger for power

The Clinton nuclear plant’s revival exemplifies a remarkable turnaround for facilities once threatened with closure due to financial struggles.

Just seven years ago, Clinton’s operator Exelon warned the plant would shut down without state legislative support, as it was failing to clear capacity auctions and losing significant revenue 1.

The plant represented over 50% of DeWitt County’s property tax base and employed around 700 people, making its potential closure devastating for the local economy of Clinton, Illinois (population ~7,225) 2.

This Meta deal represents part of a broader nuclear renaissance, with global nuclear power generation projected to grow nearly 3% annually through 2026, reaching new all-time highs as tech companies seek reliable, carbon-free energy sources 3.

The Clinton plant’s transformation from financial liability to a power source for one of the world’s largest tech companies demonstrates how AI’s massive energy demands are reshaping the economics of nuclear power.

2️⃣ AI’s soaring electricity consumption drives tech giants toward nuclear solutions

AI’s energy footprint is expanding at a rapid rate, with current estimates suggesting it accounts for about 4.4% of total U.S. electricity use and is projected to triple in the coming years 4.

Morgan Stanley forecasts U.S. data centers will require 65 gigawatts of power between 2025-2028, with a potential shortfall of 45 GW, creating urgency for companies like Meta to secure long-term power agreements 5.

The timing is critical as AI is predicted to surpass Bitcoin mining in energy consumption by the end of 2025, potentially consuming nearly half of all electricity used by data centers globally 6.

This energy challenge explains why Meta’s electricity consumption nearly tripled from 2019 to 2023, as stated in the original article, and why tech giants are increasingly turning to nuclear power, which provides the reliable, continuous generation that intermittent renewables cannot consistently deliver.

The carbon intensity of electricity used by AI data centers is currently 48% higher than the U.S. average due to reliance on fossil fuels, making nuclear power an attractive solution for companies with climate commitments 4.

3️⃣ Tech investments potentially catalyzing next-generation nuclear development

Constellation’s consideration of building another reactor at the Clinton site represents a significant milestone for the nuclear industry, which has been hesitant to commit to major new projects after Southern Company’s Vogtle project in Georgia finished years behind schedule and more than doubled its budget 3.

The article mentions Constellation is evaluating various technologies for the site, from small modular reactors (SMRs) to large AP1000 designs, reflecting the industry’s evolving approach to new nuclear development.

Over 80 SMR designs are currently in development globally, focusing on cost-effectiveness and safety improvements that could make nuclear expansion more feasible than traditional large-scale projects 3.

The need for reliable, carbon-free power for AI is creating unique public-private partnerships that could overcome the financial hurdles that have historically limited nuclear expansion in competitive electricity markets.

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