Three Mile Island plant set for restart amid new deal

Microsoft has announced a deal with Constellation to help restart a unit of the Three Mile Island facility, which has been dormant since 2019 due to operational issues. This agreement has led to a significant increase in Constellation’s shares, which surged by 22%. It’s worth noting that no US nuclear plant has reopened after being shut down.

Jefferies analysts estimate that Microsoft may pay between $110 and $115 per megawatt-hour (MWh) for its 20-year fixed-price agreement with Constellation Energy, marking a notable premium compared to the market expectation of around $100 per MWh. This pricing reflects the growing recognition of the value of nuclear energy as a clean and reliable power source, particularly amid rising demand from data centres driven by AI technology.

Analysts emphasised that customers are increasingly willing to pay substantial premiums for nuclear energy contracts, which supports the financial viability of such projects and enhances the overall volume of power available in the market at competitive rates. This trend could encourage further investments in nuclear energy and strengthen the role of such facilities in meeting the country’s energy needs.