Google has reached the largest technology-energy partnership to date with Constellation Energy Corp, the largest nuclear power operator in the United States, securing a total of 3,590 megawatts of electricity supply, of which 890 megawatts comes from nuclear unit upgrades and capacity expansions.

On Tuesday, October 6, Google and Constellation Energy announced a long-term power purchase agreement totaling 3,590 megawatts, including a 20-year nuclear power purchase contract that will add 890 megawatts of clean baseload power to the PJM grid by upgrading existing reactors.

Constellation Energy will invest more than $4.3 billion to upgrade 11 nuclear reactors located in Illinois, Pennsylvania, and New Jersey to improve thermal efficiency and generating efficiency. The first upgraded unit is expected to supply power to the grid in 2028.

Following the announcement, shares of Constellation Energy closed up more than 12%, while shares of Alphabet were essentially flat.

Google itself has already signed agreements with multiple nuclear power companies. Last year, Google agreed to purchase power from NextEra Energy to support the restart of the Duane Arnold reactor in Iowa, which had been shut down since 2020; last month, Google also funded upgrades to two nuclear plants under Southern Company, locking in additional capacity.

The agreement between Google and Constellation Energy directly responds to the "bring your own power" proposal put forward by PJM grid management. The proposal requires data center customers to secure their own power supply or face the risk of being remotely disconnected during peak demand periods.

The two companies stated that this partnership provides a replicable market-based model for technology companies to independently increase power supply without relying on government mandates.

Deal Structure: Nuclear Upgrades Paired with Long-Term Supply Guarantees

This partnership consists of two separate agreements.

The first is a 20-year power purchase agreement covering the 890 megawatts of new capacity added through nuclear unit upgrades, equivalent to the output of several small modular reactors or one large traditional nuclear unit.

The second is a 15-year power supply agreement covering an additional 2,700 megawatts of generating assets owned by Constellation Energy within the PJM grid, providing long-term revenue certainty for these existing units and ensuring their continued supply of electricity and capacity to the market.

On the technical side, Constellation Energy will achieve unit capacity expansion by replacing modern steam turbines, steam generators, and digital control systems.

This approach is known as "uprate," which avoids the lengthy construction cycle of building new nuclear plants and the complex grid interconnection process, making it the most direct means of rapidly unlocking additional clean power from existing nuclear infrastructure.

According to the two companies, this move directly responds to the objectives of the U.S. federal government's UPRISE program, which encourages public-private partnerships to maximize clean generation from existing nuclear infrastructure.

Supply-Demand Imbalance: Soaring PJM Power Prices Force Market-Based Solutions

The backdrop to this deal is the increasingly severe supply-demand conflict facing PJM, the largest grid in the eastern United States.

According to Reuters, surging electricity demand driven primarily by data center expansion has pushed PJM capacity prices up more than 11-fold since 2024 and caused a power shortfall on the grid.

Faced with this situation, PJM management has proposed requiring data center customers to "bring their own power" or face the risk of being remotely disconnected during peak demand periods. The agreement between Google and Constellation Energy is widely seen as a direct response to this proposal.

The two companies explicitly position it as a market-based solution consistent with the White House's "electricity bill protection commitment," with private entities funding the addition of new capacity to the grid without increasing residential electricity costs.

Amanda Peterson Corio, Google's global head of energy and power, said:

We are committed to meeting growing demand responsibly by proactively investing in clean, reliable power to bring new supply capacity to the national grid.

Joe Dominguez, Chairman and CEO of Constellation Energy), described the arrangement as "a model of cooperation between the technology industry and the energy sector to responsibly grow the digital economy and invest in the nation's energy infrastructure."

AI-Powered Grid: Gemini Deeply Embedded in Energy Operations

In addition to power procurement, the two companies also signed a five-year technology cooperation agreement under which Constellation Energy will fully deploy Google Cloud and Gemini Enterprise's intelligent agent workflows across its core operational processes.

Specific applications cover three areas:

First, accelerating the deployment of new capacity, including intelligent site selection, power flow modeling, and permitting process optimization to reduce costs and shorten the grid interconnection cycle for new power;

Second, optimizing generating assets by improving unit generation efficiency through equipment health monitoring, outage maintenance management, and scenario optimization;

Third, protecting critical infrastructure security by using Google Cloud's defense-grade platform to safeguard operational technology network security, with multiple networks using air-gapped architecture between them and large power systems.

The two companies position this partnership as an "AI for Energy" blueprint aimed at establishing scalable industry standards and exploring the possibility of developing clean generation, energy storage, and demand-side response projects in other regions of the United States, with the near-term focus remaining within the PJM grid footprint.