The Uprate Era: How Big Tech Is Expanding Nuclear Power

Zach Martin

Welcome to NUCLEAR CAPITAL on I R Hub Radio. I'm Zach Martin, and across the table is Emily Martin. Today we're looking at something I'd call the uprate era. Big Tech isn't waiting for the next generation of reactors. It's signing long term contracts to squeeze more power out of the nuclear plants America already runs.

Emily Martin

And the news hook is fresh, Zach. On October 6, Google and Constellation Energy announced a 20 year power purchase agreement supporting 890 megawatts of new nuclear capacity. It comes from upgrades at 11 existing Constellation units on the PJM Interconnection grid. Constellation says it will invest more than 4.3 billion dollars in that work.

Zach Martin

Before we go further, our standard disclaimer. Everything on this show is informational only. Constellation Energy, Google and Alphabet, Amazon, Meta, Vistra, and any other company we mention are discussed for context. Nothing here is a recommendation to buy or sell anything, and it is not investment advice. Now, Emily, walk us through the deal, because there are really two contracts inside it.

Emily Martin

Right. The first is the 20 year agreement that funds the uprates. Those are the 890 megawatts. The companies say the capacity is entirely new, meaning it adds to total generation available across PJM rather than reshuffling what's already there. Constellation named Illinois, Pennsylvania, and New Jersey. Reporting from Nuclear Newswire, and a Constellation spokesman speaking to Nuclear News, points to six sites. Braidwood, Byron, LaSalle, and Quad Cities in Illinois, Limerick in Pennsylvania, and Salem in New Jersey.

Emily Martin

The second contract is a separate 15 year agreement for 2,700 megawatts from Constellation's existing PJM fleet. That one adds no new capacity. It's a financial structure that keeps operating plants economically viable and on the grid. So if you add them up, you get roughly 3,590 megawatts tied to this relationship.

Zach Martin

I like to explain this with a simple analogy. The 2,700 megawatt deal is like signing a long lease so the landlord can keep the building open. The 890 megawatt deal is paying for a renovation that adds square footage to a building that's already standing. You get new space without pouring a new foundation.

Emily Martin

That's a good picture, and it's the heart of the uprate idea. A reactor's operating license caps the thermal power its core can produce. An uprate raises that cap, with approval from the Nuclear Regulatory Commission. The NRC's own backgrounder says U.S. commercial reactors are designed with excess capacity to allow for a potential uprate. And as of January 2022, the NRC had approved 171 uprates, adding about 8,000 megawatts electric. That's roughly eight new reactors' worth.

Zach Martin

So this isn't science fiction. It's been done since the 1970s. What's new is who's paying.

Emily Martin

Exactly. Let's separate the three kinds, because the size and the hardware vary a lot. A measurement uncertainty recapture uprate is typically under 2 percent. It uses more precise feedwater flow instruments to reclaim margin the license holds back for measurement uncertainty. A stretch uprate is typically up to 7 percent, with changes to instrument settings but no major hardware work. And an extended power uprate can reach 20 percent, but it often means new turbines, pumps, generators, and transformers.

Zach Martin

Think of the first as a better bathroom scale. Same body, more accurate reading, and you find you had a little room. The last one is closer to swapping the engine and the transmission. Different budget, different downtime.

Emily Martin

And Constellation's release says the Google backed work raises both thermal and electrical efficiency. Google's own description is that an uprate modernizes turbines, steam generators, and digital control systems. POWER magazine notes the steam generator work would apply to the pressurized water reactors at Braidwood, Byron, and Salem. The boiling water reactors at LaSalle, Limerick, and Quad Cities make steam directly in the vessel, so their upgrades involve a different mix of equipment.

Zach Martin

Now, what does the timetable look like?

Emily Martin

The first uprate is expected by 2028. Google's blog post says all 890 megawatts will be online before the end of 2032. Constellation hasn't broken the 890 down by site, and it hasn't said which of the 12 reactors at those six sites is left out, since the deal covers 11 units. So we know the total and the window, but not the allocation.

Zach Martin

And that window matters. Compare it to the alternative. New reactor licensing and construction is commonly measured in 10 to 15 years or more. An uprate happens at a site that already has an operating license, a grid connection, a switchyard, environmental permits, and cooling systems. The NRC targets review times of about six months for the smallest uprates, nine for stretch, and twelve for extended. Those are targets, not guarantees, but the contrast with a greenfield build is huge.

Emily Martin

Let's widen the lens, because Google's deal is one in a cluster. A week earlier, on September 30, Constellation and Amazon signed a 20 year agreement covering 690 megawatts from the Calvert Cliffs plant in Maryland. About 190 megawatts of that is uprates, expected between 2030 and 2032. Constellation says the deal supports more than 3 billion dollars of investment and gives it the revenue certainty to relicense the plant for another 20 years.

Zach Martin

So POWER magazine's math is that Google and Amazon together bolster about 1,080 megawatts of planned Constellation uprates through long term contracts with tech companies. That's the capital markets shift in one sentence. The customer's balance sheet is underwriting the revenue, and the plant owner then spends the capital.

Emily Martin

Then there's Vistra. On October 5, the Department of Energy's Office of Energy Dominance Financing offered Vistra a conditional loan commitment of up to 4.2 billion dollars. That's for uprates and modernization at Beaver Valley in Pennsylvania and Davis Besse and Perry in Ohio. DOE says the projects would preserve nearly 4 gigawatts of existing output and add 433 megawatts of new capacity.

Emily Martin

And the key detail is that those 433 megawatts already have a buyer. In January, Vistra signed 20 year agreements with Meta covering 2,176 megawatts from the operating Perry and Davis Besse units, plus all 433 megawatts of the planned uprates. Important caveat, though. This is a conditional commitment. No money has moved, and Vistra has to satisfy technical, legal, environmental, and financial conditions first.

Zach Martin

I want listeners to hear what Vistra's chief executive, Jim Burke, said at a news conference, as reported by News5 Cleveland. Quote, the Meta agreement ensures that there's sufficient revenue for us to pay all of the capital expenditures to do this work. He said Vistra would repay the loan from those revenues over time. That's the stack. A corporate buyer supplies revenue certainty, and a federal loan supplies low friction financing on top.

Emily Martin

There's a structural distinction worth drawing too. Constellation and Vistra are merchant generators. They sell into PJM's wholesale market, and the releases on their contracts with Amazon, Google, and Meta don't say those bilateral agreements need state approval. Their path runs through the NRC, and for Vistra, through the DOE loan conditions.

Zach Martin

Contrast that with Google's September 21 deal with Georgia Power.

Emily Martin

Georgia Power is a regulated utility, so that deal goes to the Georgia Public Service Commission. Google would subscribe to a new Nuclear Uprate tariff, called NU1, and receive the zero emission credits tied to the uprated output. The goal is about 96 megawatts across Hatch and Vogtle, Georgia Power's owned share. Georgia Power says the structure helps protect customers who don't participate from incremental costs, and it projects about 900 million dollars in customer benefits over the life of the units. Those are company projections the commission hasn't tested yet.

Zach Martin

So in Georgia, the regulator is in the loop. In PJM, the contract is bilateral and the capital rides on the generator and the buyer. Both aim at the same promise, that residential customers aren't left holding the bill. That fits the White House Ratepayer Protection Pledge, which Google and six other tech companies signed on March 4.

Emily Martin

One honest note. For the merchant deals, nobody has published a figure for savings to other customers. Google's release says only that it will bring the capacity without passing costs on to residential customers. And the pricing, any strike prices, the financial structuring, none of that has been disclosed.