Why Microsoft made a deal to help restart Three Mile Island

That nuclear power plant is typically associated with a very specific event. One of its reactors, Unit 2, suffered a partial meltdown in 1979 in what remains the most significant nuclear accident in US history. It has been shuttered ever since.

But the site, in Pennsylvania, is also home to another reactor—Unit 1, which consistently and safely generated electricity for decades until it was shut down in 2019. The site’s owner announced last week that it has plans to reopen the plant and signed a deal with Microsoft. The company will purchase the plant’s entire electric generating capacity over the next 20 years.  

This news is fascinating for so many reasons. Obviously this site holds a certain significance in the history of nuclear power in the US. There’s a possibility this would be one of the first reactors in the country to reopen after shutting down. And Microsoft will be buying all the electricity from the reactor. Let’s dig into what this says about the future of the nuclear industry and Big Tech’s power demand.  

Unit 2 at Three Mile Island operated for just a few months before the accident, in March 1979. At the time, Unit 1 was down for refueling. That reactor started back up, to some controversy, in the mid-1980s and produced enough electricity for hundreds of thousands of homes in the area for more than 30 years.

Eventually, though, the plant faced economic struggles. Even though it was operating at  relatively high efficiency and with low costs, it was driven out of business by record low prices for natural gas and the introduction of relatively cheap, subsidized renewable energy to the grid, says Patrick White, research director of the Nuclear Innovation Alliance, a nonprofit think tank. 

That situation has shifted in just the past few years, White says. There’s more money available now for nuclear, including new technology-agnostic tax credits in the Inflation Reduction Act. And there’s also rising concern about the increased energy demand on the power grid, in part from tech giants looking to power data centers like those needed to run AI.

In announcing its deal with Microsoft, Constellation Energy, the owner of Three Mile Island Unit 1, also shared that the plant is getting a rebrand—the site will be renamed the Crane Clean Energy Center. (Not sure if that one’s going to stick.)  

The confluence of the particular location of this reactor and the fact that the electricity will go to power data centers (and other infrastructure) makes this whole announcement instantly attention-grabbing. As one headline put it, “Microsoft AI Needs So Much Power It’s Tapping Site of US Nuclear Meltdown.”