Google's collaboration with Constellation Energy aims to add 890 megawatts of capacity to the PJM Interconnection, which serves over 65 million people in the U.S. This increase is equivalent to the output of a large nuclear reactor and can power more than 600,000 homes.
The upgrades will be made to 11 nuclear plants across Illinois, Pennsylvania, and New Jersey, focusing on modernizing existing infrastructure rather than constructing new plants. Following the announcement, Constellation's shares surged by 15%.
This trend of 'uprates' is becoming popular among tech companies as it provides a quicker and more economical solution to meet rising energy demands, particularly from data centers. The PJM grid is currently facing challenges due to demand outpacing supply, leading to increased power costs.
The deal with Google follows a similar agreement with Amazon, which adds to the momentum for nuclear power in the tech sector, known for its reliability and low carbon emissions. Analysts suggest that this trend could benefit other nuclear operators and uranium enrichers, with shares of companies like Vistra, Talen Energy, and Centrus Energy also experiencing gains.
Evercore ISI estimates that uprates could potentially add 4 to 8 gigawatts of nuclear power by the mid-2030s, further emphasizing the growing role of nuclear energy in meeting future electricity needs