Following Meta, Google (GOOGL.US) is tied to operating nuclear power: funding two nuclear power plants to increase capacity by about 96 megawatts

The Zhitong Finance App learned that Alphabet (GOOGL.US) has agreed to invest in increasing the power generation capacity of two nuclear power plants operated by a subsidiary of the US Southern Power Company (SO.US), adding about 96 megawatts of electricity supply in the context of data centers driving up electricity demand. According to a statement on Monday, Alphabet's Google will finance the so-called “uprate” (uprate) of the Vogtall and Hatch nuclear power plants in Georgia through a new rate arrangement. Capacification is a method of expanding the power output of a reactor by replacing some mechanical parts, etc.

Georgia Power (Georgia Power), a subsidiary of Southern Power Company, owns two facilities, Vogtel and Hatch, and the parent company Southern Nuclear (Southern Nuclear) is responsible for operation. This arrangement has yet to be approved by regulators.

The background to this deal is a growing question from the outside world: who should actually pay for the new electricity infrastructure to meet surging electricity demand. Georgia Power said the agreement with Google will help protect residents and other industrial users from the cost of upgrades.

Similar arrangements set a precedent: Last year, Constellation Energy agreed to sell electricity for one of its Illinois nuclear plants to Meta Platforms while investing in improving the facility's infrastructure. Nuclear power has become one of the biggest winners of the AI-driven surge in electricity demand due to its ability to provide carbon-free electricity around the clock. However, the time required to upgrade an existing power plant is usually far shorter than the cycle of building a new power plant of several years.

Background: Tech giants' nuclear e-sports

This “capacity increase” investment is another step in Google's nuclear power layout. In October 2024, Google and Kairos Power signed an agreement — the world's first agreement for companies to purchase electricity from multiple small modular reactors (SMRs) — to add up to 500 megawatts of advanced nuclear power production capacity by 2035, with the first reactor Hermes 2 (Oak Ridge, Tennessee) scheduled to be launched in 2030 to supply Google's data centers in Tennessee and Alabama through the Tennessee Valley Authority (TVA) grid.

The industry's giants are even earlier: In September 2024, Microsoft and Constellation Energy signed a 20-year 835 megawatt electricity purchase agreement to restart Pennsylvania's Three Mile Island Unit 1 (Crane Clean Energy Center). In June 2025, Meta and Constellation Energy signed a 20-year power purchase agreement for the Clinton Clean Energy Center, locking in 1,121 megawatts of carbon-free electricity, which will be delivered in June 2027, and will add 30 megawatts of output through increased capacity — this is the “Illinois Nuclear Power Plant” mentioned in the original article. The “capacity increase” logic even appeared in new construction projects: Kairos has since increased Hermes 2's single-stack output from 28 megawatts to 50 megawatts.

The gap on the demand side can be seen: According to Goldman Sachs's previous estimates, electricity consumption in US data centers will roughly triple between 2023 and 2030, requiring about 47 gigawatts of additional power generation capacity. The tight consumption of electricity has also spread to the price side: capacity auction prices in various US electricity markets have repeatedly reached new highs in recent years, and long-term power purchase agreements signed with tech giants are bringing new profit models to nuclear power units in operation.

The reason why increasing capacity is seen as a fast path is that it does not have to repeat the long cycle of building new units: usually it only needs to replace steam turbine blades, upgrade generator components or instrument control systems, and the operating unit can be extruded by a few percentage points of output. The cost and construction period are measured in “years” and “100 million”, rather than the ten years and 10 billion dollars of new construction projects (according to the prevailing industry situation). 96 megawatts is not that big for Vogtel, which has a single gigawatt capacity, but it is invaluable during periods of grid scarcity — roughly equivalent to the electricity needs of tens of thousands of households based on the average load in the US.

The Vogtall power plant in Georgia itself is a symbol of America's nuclear power revival: its units 3 and 4 were put into commercial operation in July 2023 and April 2024, respectively. They were the first batch of new nuclear power units built in the US in decades. The final cost was over 30 billion US dollars, and the construction period was seriously overspent. This history also explains why the fast path of “capacity expansion” is particularly appealing to technology companies — no need to wait ten years, just replace and upgrade the fleet in operation.

Georgia is at the forefront of this electronics race: the Atlanta metropolitan area has become one of the fastest-growing data center markets in the US in recent years, and Georgia Power previously revealed a 10-gigawatt high-load customer application queue. In early 2025, state regulators began revising rate rules for heavy duty customers to require large technology and industrial users to bear more infrastructure costs. The new rate arrangement with Google can be seen as a continuation of this regulatory direction.

The logic behind nuclear e-gaming is uncomplicated: although wind and solar energy can be quickly connected to the grid, they are intermittent; the all-weather baseload properties of nuclear power match the data center's year-round load curve — which explains why tech giants' clean power purchases have clearly skewed towards nuclear power in recent years.

The pay bill dispute is also unfolding in Georgia: Georgia Power has expanded electricity investment in recent years due to a surge in data center loads, and the upward pressure on residents' electricity prices and the “big user's own cost” regulatory debate continues. Whether the new rate arrangement in this agreement can be approved is the latest test of this debate — if approved, it will incorporate the “big user payment” principle into the rate structure in the form of “capacity increase financing”. The statement did not disclose the consideration Google paid for this, nor did it specify under what conditions Google would obtain additional electricity.