(Bloomberg) —
Constellation Energy Corp. surged after it said it is on the verge of signing long-term deals to provide nuclear energy that could meet unrelenting demand to run data centers and factories.
Shares climbed 12% as Chief Executive Officer Joe Dominguez said on an earnings call that the agreements bolster the case for Constellation’s pending $16.4 billion deal for Calpine Corp., which would give Constellation the largest fleet of US power stations.
Power consumption in the US is expected to grow almost 16% over the next five years, driven by data centers running artificial intelligence operations, as well as the electrification of homes and cars and a shift away from fossil fuels in manufacturing. That’s created new life for old nuclear plants, with a deal to reopen Three Mile Island as the most high-profile example.
Technology companies are keen to use power from reactors, which can supply clean energy around the clock that will help them meet ambitious green targets. While power companies have expressed interest or announced pilot projects for small modular reactors, support for opening new large-scale nuclear plants is much rarer. Those types of projects are notoriously expensive.
Constellation is “nearing long-term agreements with customers to sell our clean, reliable and available” megawatts, according to an earnings presentation posted Tuesday.
While Dominguez declined to provide details on the pending deals, Paul Zimbardo, an analyst at Jefferies LLC, said he sees it happening soon and prices to be in the $80-per-megawatt-hour range.
“I would expect something in the next quarter,” he said. “It seems like they’re pretty close.”
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