Microsoft in 20yr deal to reopen Three Mile Island to power its AI energy needs

Microsoft has signed a 20-year power purchase agreement to resuscitate the Three Mile Island nuclear power plant to fuel its growing AI energy requirements.

Subject to regulatory approval, the deal will enable Microsoft to access 835 megawatts of energy from the plant, or 100% exclusive rights to the nuclear power plant.

Microsoft deal to revive Three Mile Island

Three Mile Island owners, Constellation Energy Corp. announced the agreement with Microsoft on Friday, which is expected to see the power plant coming back online in 2028, after it was retired in 2019 due to economic reasons.

According to Constellation, under the deal, Microsoft will purchase energy from the reopened plant as part of efforts to match the power needs of its AI data centers.

The plant is next to a unit that was shut down in 1979 following the worst US nuclear accident in history. The 1979 incident resulted in the permanent closure of one of the two reactors and fueled a regulatory crackdown on the nuclear industry.

Once revived, the plant has capacity to generate 837 megawatts of electricity, enough to meet the energy needs of more than 800,000 homes.

“This agreement is a major milestone in Microsoft’s efforts to help decarbonize the grid in support of our commitment to become carbon negative.”

Vice president of energy at Microsoft Bobby Hills.

The development comes as tech firms are seeing a spike in energy consumption spurred by the rising demand for AI products and services. This has prompted them to look for alternative energy sources to power their high energy consuming data centers.

Recently, Microsoft entered into a carbon credits deal with Occidental Petroleum as the tech giant seeks to offset the increased greenhouse gas emissions spurred by AI demand.

“Microsoft continues to collaborate with energy providers to develop carbon-free energy sources to help meet the grids’ capacity and reliability needs,” said Hills.

Constellation is reportedly going to inject $1.6 billion to reopen the plant while it will also need regulatory approvals from the Nuclear Regulatory Framework to bring the plant back online. This is in addition to getting license renewal which will see the company extend the plant’s operations until 2054.

We’re restarting Three Mile Island Unit 1 as the new Crane Clean Energy Center! Through a 20-year agreement, Microsoft will use the energy from the renewed plant to help match the power its PJM data centers use with carbon-free electricity. ????
More info⬇️https://t.co/NfKGdJgMA0 pic.twitter.com/z9ydxDXw1U

— Constellation (@ConstellationEG) September 20, 2024

Microsoft shifts to clean energy

With growing demand for energy to power data centers, the narrative is currently centered on finding alternative clean energy sources. Tech firms including Microsoft, Google, and OpenAI, have reported a surge in energy consumption at their data centers spurred by rising demand for AI services and systems.

Google has revealed carbon emissions increased by about 50% since 2019, driven by data centers. The company has pledged to achieve net zero by 2030, a feat that might be hard to fulfill because of growing AI expansion.

Microsoft has also acknowledged that its greenhouse gas emissions are growing and posing a threat to its ambitious climate goals.

The company revealed in May that emissions had increased by almost a third since 2020, driven mostly by the construction of data centers. The tech giant has also promised to be “carbon negative” by 2030.

However, according Bloomberg the Three Mile Island deal is going to be a game changer for Microsoft. The nuclear plant is expected to help Microsoft’s ambitious plans to run its data centers on clean energy by next year. It is also expected to power its data center expansions in Chicago, Ohio, Pennsylvania, and Virginia.

According to The Verge, the tech giant has been betting on next-generation nuclear reactors o fuel its data centers recently. The software giant has been on the hunt for anyone who could roll out a plan for small modular reactors (SMR).

This comes as Microsoft co-founder Bill Gates is also a “big believer that nuclear energy can help solve the climate problem.”