In a landmark deal that underscores the shifting energy demands of the tech sector, Microsoft has partnered with Constellation Energy to restart Pennsylvania’s Three Mile Island nuclear reactor by 2028, securing a $1 billion loan from the U.S. Department of Energy (DOE) to finance the project. The refurbished facility, renamed the Crane Clean Energy Center, will deliver 835 megawatts of carbon-free baseload power under a 20-year exclusive contract for Microsoft’s AI data centers.
Project Details
- Total cost: $1.6 billion to refurbish Unit 1, which was shut down in 2019.
- Timeline: Restart targeted for 2027–2028.
- Pricing: Microsoft will pay an estimated $110–$115 per megawatt-hour, a premium compared to renewables but still below the cost of new nuclear construction.
Strategic Shift in Energy Procurement
The deal marks a departure from traditional renewable energy credit purchases, with Microsoft directly underwriting physical infrastructure capable of delivering 24/7 reliable power. As AI workloads demand hundreds of megawatts of continuous electricity, intermittent renewables alone cannot meet the scale required. Nuclear partnerships are emerging as a strategic solution for hyperscalers.
Industry Context
Microsoft’s move follows Meta’s recent agreement with Constellation Energy, signaling that nuclear-backed data centers may become the new competitive edge in the AI race. Analysts note that the bottleneck for AI infrastructure has shifted from chips and talent to raw electricity supply, with hyperscalers increasingly willing to finance generation assets directly.
Outlook
The Crane Clean Energy Center represents the first time a tech giant has financed nuclear infrastructure at this scale, setting a precedent for future energy deals. As AI compute demands accelerate, more technology companies are expected to directly fund power generation projects, reshaping both the energy and digital landscapes.
