Google signed up for nuclear power that doesn't exist yet, and Constellation Energy rose 12.25%

Constellation Energy, America's largest nuclear power operator, rose 12.25% to US$300.40 on Tuesday. It signed a 20-year deal to sell Google 890 megawatts of new nuclear capacity, all of it squeezed out of reactors it already runs.

So what is an uprate? It is an upgrade that lets an existing reactor make more electricity, using new turbines, steam generators and control systems. Constellation will do it at 11 units on six sites in Illinois, Pennsylvania and New Jersey, and will spend US$4.3 billion on the work.

The first uprate is due online in 2028. A second agreement covers 2,700 megawatts of existing supply for 15 years, taking the two deals to about 3.6 gigawatts. All of it feeds PJM, the eastern grid that serves 67 million people.

Chart: Constellation's value outran its sales. Revenue by year and market value at each year end, 2022 to 2025 plus 6 October, on one scale. Revenue: US$24.4bn to US$25.5bn; value: US$28.2bn to US$106.4bn. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

This is Constellation's second tech contract in a week. Amazon signed up last week for a 190-megawatt uprate at Calvert Cliffs in Maryland. Microsoft's 2024 deal restarts a reactor at Three Mile Island. Vistra and Talen Energy, which also own nuclear plants, rose on Tuesday too.

Our read

Constellation now has 20 years of revenue lined up for megawatts it still has to build. That is a strong position, and it rests on engineering. The first uprate is due in 2028, and that date is what Tuesday's 12% assumed.

This story ran in Fission and Chips Wednesday 7 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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