Nuclear Uprates: Big Tech's Shortcut to Clean Grid Power

Zach Martin

Eight hundred and ninety megawatts. That's the number I can't stop thinking about this morning. It's roughly what 700,000 homes use, and it's coming from reactors that are already built, already licensed, and already sitting on the grid. Nobody has to break ground on anything new to get it. Welcome to Nuclear Capital on KMKT I R Hub Radio, I'm Zach Martin.

Emily Martin

And I'm Emily Martin. Zach, it's October 7th, and the story has moved quickly since Sunday. On October 6th, Google and Constellation Energy announced a 20 year power purchase agreement to fund those 890 megawatts. A few days earlier there was the Amazon deal at Calvert Cliffs, and the Department of Energy announced a conditional loan for Vistra. Three announcements in about a week, all pointing at the same idea.

Zach Martin

Right. In our last episode, on October 5th, we walked through the uprate thesis using Amazon's Calvert Cliffs expansion. We said that if the economics held, hyperscalers would copy the pattern across the fleet. We did not expect the copy to show up within about 48 hours, and at this scale. So today we're not rerunning the big nuclear thesis. We're going to focus on one question: what does it mean when the money goes to megawatts that already exist, instead of to reactors that are still on a slide deck?

Emily Martin

Before we go further, a quick disclaimer, and I mean it. Everything we discuss today is public reporting and informational only. Companies we mention, including Constellation, Vistra, Cameco, Oklo, NuScale, NANO Nuclear, TerraPower, Google, Amazon, and Meta, are named for informational purposes. Nothing here is a recommendation to buy, sell, or hold any security. I R Hub Radio and KMKT do not provide investment advice.

Zach Martin

Good. Now let's start with the mechanics, because the word uprate gets thrown around like everyone already knows it. Emily, if you had to explain it to somebody at a dinner table?

Emily Martin

I'd say a nuclear plant is a big machine for making steam, and the steam spins a turbine. An uprate gets more electricity out of that same machine. Google's own description is that an uprate modernizes turbines, steam generators, and digital control systems to boost the output of an existing reactor. Benzinga's explanation was easy to follow. The operator replaces turbines, steam generators, and controls, then the plant converts more of its heat into electricity, and the extra power flows through the same grid connection the plant already has.

Zach Martin

Think of a restaurant kitchen. A new restaurant means land, permits, construction, and a long wait. An uprate is like buying a better oven and a faster prep line for a kitchen that already has customers lined up out the door. Same building, same address, more plates per hour.

Emily Martin

And there's another route that's less dramatic. The Nuclear Regulatory Commission says utilities can also uprate by refueling with slightly more enriched uranium, or a higher percentage of new fuel in the core, as well as through major modifications such as replacing main turbines. Utilities have been doing this since the 1970s. The NRC says that as of 2022 it had approved more than 170 uprates. So this isn't science fiction. What's new is who is paying, and how much of it is being done at once.

Zach Martin

Let's walk through the money, then. Starting with Google and Constellation. Constellation is the largest nuclear operator in the country. Under this agreement, Google signs a 20 year power purchase agreement that funds uprates at 11 Constellation nuclear units, spread across six sites in Illinois, Pennsylvania, and New Jersey. Constellation says it will invest more than $4.3 billion. The first uprate is expected to be delivered by 2028, and Google says all of the projects will be done before the end of 2032.

Emily Martin

There's a second piece that matters, and it's easy to miss. The companies also signed a separate 15 year agreement covering 2,700 megawatts from Constellation's existing PJM fleet. Reuters reported that this power isn't tied to a specific plant. Google described it as long term revenue certainty so that Constellation's operating plants stay economically viable. Add the two together and Reuters counted 3,590 megawatts contracted in total, with new nuclear making up about a quarter of that.

Zach Martin

So one chunk is brand new megawatts, and the other is basically a long term anchor on megawatts that already run. Two different things, and I think people blur them. Only the 890 is incremental capacity. The 2,700 is about keeping the existing fleet financially steady.

Emily Martin

Exactly. And Google isn't hiding the motive. Amanda Peterson Corio, Google's global head of energy and power, said the agreement to fund nuclear reactor uprates will strengthen the PJM grid, which serves 67 million people. Constellation's chairman and CEO, Joe Dominguez, called it a model for how technology companies and the energy industry can work together, funded by private entities. That last phrase is doing a lot of work, and we'll come back to why.

Zach Martin

Then there's the tech side. Constellation also plans to use Google Cloud's Gemini Enterprise for things like outage planning, engineering work, and plant dispatch. That's the company's stated goal, to move uprates along faster. I'd treat that as a promise to watch, not a result yet.

Emily Martin

Now the Amazon deal, which came first. On September 30th, Amazon and Constellation signed a 20 year agreement covering 690 megawatts in total at Calvert Cliffs in Maryland. About 190 megawatts of that is additional capacity from uprates, targeted for 2030 to 2032. It comes with more than $3 billion in plant improvements and license renewal efforts.

Zach Martin

Put the two hyperscaler numbers together, 890 from Google and 190 from Amazon, and you get 1,080 megawatts of newly funded power. Benzinga pointed out that's about 16 percent of a 6,831 megawatt shortfall that PJM identified after its latest capacity auction.

Emily Martin

Sixteen percent sounds modest until you remember what it took. That's from two companies in about a week, and from plants that run today. And then the federal government stepped in. On October 5th, the Energy Department's Office of Energy Dominance Financing announced a conditional loan commitment of up to $4.2 billion to Vistra. The money is for uprates and modernization at three Vistra stations, Beaver Valley in Pennsylvania, and Davis-Besse and Perry in Ohio.

Zach Martin

And that's 433 megawatts of new capacity. Something the Energy Department emphasized is that the projects will preserve nearly 4 gigawatts of baseload power, and support running those plants for an additional 20 years beyond their existing licenses. The loan also includes an option for possible future uprates at Comanche Peak in Texas. Energy Secretary Chris Wright's line was that getting more power from the plants we already have delivers more affordable, reliable, around the clock energy.

Emily Martin

One word there matters a lot, though. Conditional. The Energy Department itself says Vistra must satisfy certain technical, legal, environmental, and financial conditions before the department signs definitive financing documents and funds the loan. So that's a signal of intent, not money in the bank yet.

Zach Martin

Good catch. So add it up: roughly 1,500 megawatts across Google, Amazon, and Vistra in a few days, with the Vistra piece still conditional. The New York Times reported that companies and analysts estimate uprates across the existing fleet could ultimately add 6,000 to 8,000 megawatts. That's about the equivalent of six to eight giant new reactors. So, my arithmetic, not theirs, these announcements would be a fifth to a quarter of that range, if everything gets done.

Emily Martin

If. And that brings us to why Big Tech is the one buying. Why not just wait for small modular reactors?

Zach Martin

I think it starts with a boring word: queue. Benzinga made the point that a brand new power plant can wait years in line to connect to the grid, while an existing reactor skips the line, because the extra power flows through the connection the plant already has. For a company that needs electrons for data centers, that's valuable.

Emily Martin

And the PJM backdrop explains the urgency. PJM is the largest power grid in the country, a 13 state grid. Reuters reported that capacity prices there have risen more than eleven fold since 2024, and the grid is facing a power shortfall. PJM management has proposed what it calls Bring Your Own Power, which would have large data center customers either bring their own supply or risk being cut off remotely during peak demand.

Zach Martin

So the companies describe this deal as a response to that proposal. Google gets to say it's adding supply rather than just drawing on what households already depend on. Google's blog also says this comes at no cost to other ratepayers. That's the company's claim, and an important one politically, since electricity bills in the region have been a live issue.

Emily Martin

There's also a track record. Google says this agreement brings the total new nuclear capacity it has enabled, from uprates and restarts, to over 1.5 gigawatts. That includes an agreement with Georgia Power to support uprates at four reactor units, and a collaboration with NextEra to restart the Duane Arnold plant in Iowa. Google also says that by the end of the decade its agreements could enable nearly a quarter of the Energy Department's goal of 5 gigawatts of uprates and restarts by 2030.

Zach Martin

So the pattern isn't one lucky contract. It looks like a procurement strategy. Pay for the megawatts that can be delivered fastest, and sign long enough that the operator can order turbines and hire crews. A 20 year contract is the thing that lets a plant owner raise money against an upgrade. Without that revenue certainty, a $4 billion program is much harder to justify.

Emily Martin

But we should say something plainly. The price is not public. The New York Times described Google buying the electricity at an undisclosed price, and the Amazon terms haven't been published either. So we can talk about structure and scale, but we can't tell you whether the economics are rich or thin for Constellation or its customers.