Nuclear Project PPAs

While the corporate PPA market has long been dominated by renewables, we are seeing an increase in nuclear PPAs as data centre operators, largely driven by Big Tech demands, attempt to procure the power required for an AI driven future. Data centres, especially AI data centres, demand clean, high-volume, reliable, scalable and round-the-clock energy. Nuclear therefore provides the perfect energy source for these requirements. 

2024/25 has seen a number of high profile PPAs between Big Tech and nuclear generators. These have largely been concentrated in the US where there is a relative abundance of conventional nuclear power stations and a rising number of hyperscaler data centres. This includes a 10-year PPA signed in March 2024 between AWS and Talen Energy Corporation to power a 960 MW data centre campus in Pennsylvania and a deal between Meta and Constellation Energy which, while the precise details are not public, will keep the Illinois based Clinton Clean Energy Center operating past 2027 when state funding is reduced. In perhaps the most ambitious agreement to date, Microsoft has signed a 20-year PPA with Constellation Energy to restart the 835 MW Three Mile Island Unit 1 nuclear reactor in Pennsylvania, which was shut down in 2019 for economic reasons, with the facility expected to come back online in 2028.

Besides large-scale nuclear power stations, small modular reactors (SMRs) using established physics with modular construction will present an alternative solution for on-site generation. Operating at up to 400 MW capacity, these prefabricated SMR units can be scaled as needed. The appeal is clear: carbon-free, constant power supply suited to AI's intensive energy demands. SMRs require minimal land – under 100 acres compared to over 1,200 for equivalent solar capacity – enabling direct integration with data centres whilst avoiding grid constraints.

Advanced Modular Reactors (AMRs) use (depending on the design) advanced designs, coolants and/or fuels to improve efficiencies and further de-carbonise nuclear generation. Whilst more novel technology to SMRs their promise is ever cleaner and reliable nuclear power which also used modularity to reduce costs and timelines. Perhaps the highest profile power purchase deal so far is Google’s first corporate agreement to purchase power from multiple AMRs developed by Kairos Power – with first operation planned for 2030. 

Nuclear fusion also offers transformative potential albeit that significant engineering challenges remain to reach commercial generation. It was announced in July that, following a $425m fundraising and a commitment to supplying Microsoft's data centres with power by 2028, fusion developer Helion had begun construction on its first plant. This represents the first nuclear fusion corporate PPA.

The future for nuclear PPAs still contains some obstacles, however. Construction delays and budget overruns create financial uncertainty for the development of new nuclear power stations. Furthermore, regulatory complexity and public perception issues deter investors in some jurisdictions. Regulation is shifting though, such as in the UK where nuclear site restrictions were lifted in February 2025 to facilitate SMR deployment at industrial facilities. Discussions are currently underway in many countries regarding the potential acceleration of project development and licensing procedures.

Given the current rate of investment in data centre development and power procurement, we are likely to see nuclear PPAs take a growing place within the broader PPA market. These nuclear PPAs will be relatively low volume in terms of the number of contracts but may soon account for a large volume of energy procured. 

For more information, see our article on Powering AI data centres – challenges and opportunities - Bird & Bird