Constellation Energy will reopen the Three Mile Island nuclear plant in Pennsylvania to provide power to Microsoft as the tech giant scours for ways to satisfy its soaring energy demand while keeping its emissions in check.

The companies on Friday unveiled a 20-year power supply deal which will entail Constellation reopening Unit 1 of the nuclear facility which was shuttered in 2019, in what would be the second such reopening of a plant in the US.

Three Mile Island’s second unit, which was closed in 1979 after a partial meltdown that led to the most serious nuclear accident in US history, will remain closed.

“The decision here is the most powerful symbol of the rebirth of nuclear power as a clean and reliable energy source,” said Constellation chief executive Joe Dominguez on a call with investors.

Nuclear power has enjoyed a renaissance in recent years after accidents including Three Mile Island, the Chernobyl disaster in 1986 and the earthquake and tsunami that hit the Fukushima plant in 2011 led to a shift away from the power source in many parts of the world.

But nuclear’s ability to provide round-the-clock carbon-free power has pushed it back into the spotlight as the world looks to slash emissions while feeding a rapidly growing need for energy.

Big Tech has struggled to find ways of feeding the surging power demand created by artificial intelligence infrastructure while sticking to its climate targets. Microsoft earlier this year said its emissions had risen almost a third since 2020.

Like many of its rivals, the tech group has set an array of climate goals, including becoming “carbon negative” and achieving “zero waste” by 2030.

The Three Mile Island restart will provide more than 800MW of power, all of which Microsoft will purchase under the 20-year arrangement. The plant is set to come online in 2028 and stay operational until at least 2054. The location of the Microsoft facilities that will receive the output has not been specified.

“This agreement is a major milestone in Microsoft’s efforts to help decarbonise the grid in support of our commitment to become carbon-negative,” said Bobby Hollis, Microsoft’s vice-president of energy.

The facility will be renamed the Crane Clean Energy Center, after Constellation’s late former chief executive Chris Crane. Shares in the company, which will spend roughly $1.6bn on the project, rose 14 per cent in Friday morning trading in New York.

Friday’s announcement marks the second project to restart a shuttered reactor in the US after Holtec International said this year it would seek to reopen the Palisades nuclear plant in Michigan by the end of 2025; it was closed in 2022.

The US is home to the world’s largest national nuclear fleet of 94 reactors, which provides almost a fifth of the country’s electricity supplies.

In a drive to promote emissions-free power, the Department of Energy is offering several billion dollars in subsidies to nuclear operators to keep open for longer ageing plants that had been set for decommissioning.

The push to extend the lives of nuclear facilities comes as US electricity demand booms after years of stagnation, driven by emerging technologies such as AI and the rollout of electric vehicles, prompting warnings over the stability of the power grid.

The North American Electric Reliability Corporation, a regulatory body, has sharply increased projections for peak power demand for the next decade, reversing steady or falling growth rates from previous years.

Jim Robb, NERC chief executive, earlier this year told the Financial Times that projected demand growth over the next 10 years was now nearly double what it was five years ago. He said major upgrades were needed to ensure reliability of the electricity system in the years ahead.

The US is also developing next-generation nuclear technologies and is among countries seeking to produce smaller reactor models.

This story has been updated to note the planned reactivation of a second nuclear facility