Walmart’s first nuclear deal shows demand beyond AI data centers

Walmart is signing a long-term contract to buy nuclear power for the first time ever, a promising sign that the industry’s future is supported by more than just the AI data center boom.

The retail giant agreed on Tuesday to buy power from a nuclear plant in Illinois owned by Constellation Energy for its operations in the area, including its stores and a high-tech warehouse in Illinois that stores and sorts perishable food.

Walmart will buy 176 megawatts of power from the plant over a 15-year period, or enough power to serve around 150,000 homes.

The Walmart deal will allow Constellation to expand the capacity of the Illinois plant by 30 megawatts, a process known as an uprate, which can involve replacing older equipment and improving efficiency.

The financial terms were not disclosed, but these types of deals tend to go for premium prices because they allow the buyer to lock in their costs over a long period.

Walmart, which has pledged to eliminate net carbon emissions from its U.S. operations by 2040, will also receive the environmental attributes associated with the nuclear energy, which generates electricity without carbon emissions.

Constellation stock was down 0.3% on Tuesday, outperforming the S&P 500’s decline.

The deal isn’t large enough to significantly boost Constellation’s growth trajectory, given that Constellation has 55 gigawatts worth of generating capacity and the Walmart deal represents less than 0.5% of that total.

Still, investors are eager to see Constellation sign more long-term power agreements, particularly with technology companies seeking electricity for AI data centers.

A lack of similar announcements has contributed to the stock’s 25% decline this year, following multiple years of double-digit gains.

I’m confused. Power generated, regardless of the source, goes out on the general grid everyone accesses. What is the significance of Walmart saying they’ll buy nuclear power off the grid?

Electric power companies are made up of three distinct groups. Generating companies… the companies that make the power. Transmission companies… the companies that transport the power long distances. And Distribution companies .. the companies that bring the power to your home or business and where you pay your bill.

Each day, the Distribution companies tell the world how much power they will need the next day. The Generation companies bid on delivering that power. Walmart has established a fixed price for the amount of power they foresee using with this generation company. They know what their costs will for power. The generation company knows they have a fixed price coming for a percentage of their capacity.

Yes, the power goes into the grid and distribution system. It does not matter in the least which electrons flow into Walmarts warehouse.

Sounds like the small consumer could be on the short end of the stick in coming years. Not saying that they aren’t already. The government should put a stop to this because if the unfortunate on S.S. is getting short ended, he may not survive without more government help.

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