The Nuclear Renaissance on the U.S. Grid

The quickest way to add nuclear power to the U.S. grid is to get more out of the reactors already running. Over the past month, Google (GOOG) and Amazon (AMZN) signed agreements backing nearly 1.2 GW of uprates at existing plants. These deals pay for new turbines, steam generator upgrades, and modern control systems, and the VettaFi Nuclear Renaissance Index holds many of the companies that make that equipment.Key Takeaways Google, Amazon, and Meta now back more than 1.6 GW of uprates at existing U.S. reactors through long-term agreements. Long-term contracts also give plant owners the revenue certainty to pursue license renewals that extend operations to 80 years. BWX Technologies (BWXT), GE Vernova (GEV), Curtiss-Wright (CW), and other NUKZX constituents make the equipment these refits require. Hyperscalers Pay for More Output From Existing ReactorsOn October 6, Constellation Energy (CEG) and Google announced a 20-year power purchase agreement (PPA) supporting 890 megawatts (MW) of uprates across 11 reactor plants. Constellation plans to invest more than $4.3 billion, with the first uprate expected by 2028. Google also signed a 15-year agreement for 2,700 MW from Constellation’s existing reactor fleet. On September 30, Amazon signed a 20-year PPA for 690 MW from Constellation’s Calvert Cliffs plant in Maryland, including a 190 MW uprate. Constellation says the deal involves more than $3 billion of investment and gives it the revenue certainty to relicense the plant for another 20 years. Google is also backing nearly 100 MW of uprates at two reactor plants in Georgia. Vistra (VST) signed 20-year PPAs with Meta (META) in January for 2,176 MW from its Perry and Davis-Besse plants, plus 433 MW of uprates at those plants and Beaver Valley. See more: Meta Is Turning to NUKZ Holdings for Baseload Power Just a few weeks ago, the Department of Energy (DOE) offered Vistra a conditional loan commitment of $4.2 billion for the uprates. Vistra says the contracts also let it seek license renewals adding 20 years to each reactor’s operational life. Uprates deliver capacity sooner than a new reactor and at a lower cost. Constellation’s budget for the Google-backed work comes to about $4,800 per kW, less than half the per-kW cost of Vogtle Units 3 and 4, according to Canary Media.Uprates & Life Extensions Require New EquipmentPower uprates can raise output by up to 20% and often require modifications to turbines, main generators, transformers, and pumps. Constellation says its Google-backed uprates involve modernizing turbines, steam generators, and digital control systems. License renewals add work as well. More than 20 U.S. reactors are now licensed to run for up to 80 years, and more than 97% of plant owners in a recent Nuclear Energy Institute survey are considering or pursuing 80-year operation. Running that long requires more inspections, aging management, and component replacements. See more: New Industry Survey Reinforces Nuclear’s Growth Outlook Constellation announced an $800 million program to replace the main turbines at Byron and Braidwood in 2023, and crews installed the first new low-pressure turbines at Byron Unit 1 during a refueling outage this spring. That three-year lag suggests equipment and engineering contracts for the newly announced uprates will need to be placed well before installation.NUKZX Holds the Suppliers Behind the RefitsBWX Technologies’ Canadian subsidiary has shipped more than 315 steam generators. Under its former Babcock & Wilcox Canada name, it built the replacement steam generators for Calvert Cliffs and Davis-Besse, two plants now slated for hyperscaler-backed uprates. It also fabricated new steam generators for Bruce Power’s life extension program in Ontario, where a joint venture that includes Aecon Group (ARE.CN) handled the replacement work. BWXT said in August that demand for commercial nuclear equipment and services remains exceptionally strong. Mitsubishi Heavy Industries (7011.T) has supplied 31 replacement steam generators to plants in France, Belgium, and the U.S., including units for EDF’s effort to run its French reactors beyond 40 years. GE Vernova services more than 100 GW of nuclear turbine islands in the Americas, and nuclear helped lift its power services orders 12% in the second quarter. Its joint venture with Hitachi (501.T) has seen 37 U.S. boiling water reactors implement its uprates. Refits also call for pumps, valves, and instrumentation. Curtiss-Wright has content on every reactor in North America and reported rising aftermarket demand tied to plant outages and restarts. Flowserve (FLS) booked more than $110 million in nuclear orders in the second quarter, including several North American life extension awards. BWXT, Aecon, Mitsubishi Heavy Industries, GE Vernova, Hitachi, Curtiss-Wright, and Flowserve are all constituents of NUKZX. Hyperscaler contracts give owners like CEG and VST, also in NUKZX, the revenue to fund uprates and license renewals. At the same time, NUKZX includes the companies that make and install the equipment those projects require. NUKZX serves as the underlying index for the Range Nuclear Renaissance Index ETF (NUKZ ).Related Research:New Industry Survey Reinforces Nuclear’s Growth Outlook Construction Firms Powering the Nuclear Renaissance Reactor Life Extensions Boost Nuclear Energy ETF NUKZ Looking for nuclear insights in your inbox? 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