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A separate unit of the plant was shut down in 1979 after experiencing a partial meltdown, in one of the biggest commercial nuclear accidents in US history | (Photo: Shutterstock)
Microsoft is estimated to pay Constellation Energy a premium as part of a long-term power purchase agreement (PPA) related to the Three Mile Island nuclear plant in Pennsylvania, Jefferies analysts said on Monday.
Rising demand for electricity from data centers to power AI technology has created a need for clean and sustainable sources of energy such as nuclear power.
Microsoft signed a deal with Constellation to help it restart a unit of its Three Mile Island nuclear plant, the companies said on Friday, sending the utility firm’s shares up 22 per cent.
The unit Constellation hopes to restart at the Three Mile Island power facility was shut down in 2019 due to operational issue. No US nuclear power plant has been reopened after shutting.
A separate unit of the plant was shut down in 1979 after experiencing a partial meltdown, in one of the biggest commercial nuclear accidents in US history.
Jefferies estimated that Microsoft might pay Constellation about $110-$115 per megawatt hour (MWh) as part of the 20-year-long fixed price PPA.
The brokerage’s analysts said the estimated cost represents a significant premium to market expectations, which are in the low $100 per MWh for a collocated deal.
“Customers are willing to pay material premiums for virtual nuclear deals. This considerably increases the amount of volume for sale at robust levels,” Jefferies analysts said in a note.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Sep 24 2024 | 9:13 AM IST
