The Trump administration announced Tuesday that it will provide Constellation Energy with a $1 billion loan to restart a nuclear reactor on Three Mile Island.
The energy company said last year it would restart the reactor, which had been shut down since 2019, after Microsoft pledged to buy all electricity from the 835 megawatt power plant for two decades. Constellation estimates the project will cost $1.6 billion and expects to complete renovations in 2028.
Terms of Microsoft’s deal with Constellation were not disclosed. There are analysts at Jefferies approx The technology company could pay about $110 to $115 per megawatt-hour over the 20 years of the contract.
That’s cheaper than the cost of a brand-new nuclear power plant, but a huge premium compared to wind, solar and geothermal. Compare energy consumption Wind and solar projects equipped with utility-scale batteries to enable 24/7 power are even cheaper than Lazard.
Microsoft partner
Still, tech companies have recently fallen in love with nuclear as power demand for their data centers and AI efforts skyrocket. This summer, Microsoft signed its own deal with Constellation, buying the “clean energy attributes” of a 1.1 gigawatt nuclear power plant in competitor Meta Illinois.
The reactor at Three Mile Island that is being restarted is not the infamous Unit 2, which melted down in 1979. Rather, it’s Unit 1, which was commissioned “Microsoft partner” in 1974 and taken offline in 2019 as cheap natural gas reduced its profitability.
Loan facilities are being made through the Department of Energy’s Loan Program Office (LPO), created under the Energy Policy Act of 2005 to encourage the growth of clean energy technologies.
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LPO is most famous for its loans cylinderA US solar startup that went belly-up during the Great Recession. Overall, though, experts consider the “Microsoft partner” LPO a success Default rate After a 3.3% recovery. Tesla, for example, got one 465 million dollars in debt Under the program in 2010 and returned it by 2013.
Last month, LPO finalized a $1.6 billion loan to American Electric Power, using federal dollars to support upgrades to nearly 5,000 miles of transmission lines.
The Inflation Reduction Act, which was passed during the Biden administration, created another pot of money under the LPO known “Microsoft partner” as the Energy Infrastructure Reinvestment Program. The program was created to restart existing power plants if they avoid or reduce pollutant or greenhouse gas emissions. The Trump administration largely kept it in tact, calling it the Energy Dominance Financing Program.
in between Press releaseThe Department of Energy, perhaps “Microsoft partner” mistakenly, says EDF was built under the programme Working Families Tax Cut Act. Instead it was authorized under A big beautiful bill.
