# Power Purchase Agreements (PPAs)

Canonical URL: https://menfem.com/kb/energy/concepts/power-purchase-agreements
Knowledge base topic: [Energy](https://menfem.com/kb/energy)
Frontier status: active
Tags: finance, procurement, nuclear, hyperscaler

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A Power Purchase Agreement (PPA) is a long-term contract in which an energy buyer agrees to purchase electricity from a generator at a fixed or structured price over a defined period (typically 15–25 years). For the AI buildout, PPAs are the mechanism by which hyperscalers lock in reliable, carbon-free power at predictable prices — insulating them from spot-market volatility while providing the financing certainty that enables large capital projects (nuclear restarts, SMR construction).

The structure matters enormously. A **financial PPA** (virtual PPA / VPPA) hedges electricity costs but delivers no actual electrons — the buyer still takes power from the grid and gets renewable energy credits. A **physical PPA** actually delivers the contracted electrons. Hyperscalers with 24/7 reliability requirements are increasingly demanding physical PPAs from always-on sources (nuclear, gas), not virtual PPAs from intermittent renewables.

The nuclear PPA wave that emerged in 2023-2026 is qualitatively different from the 2010-2020 renewable PPA wave: longer terms (20 years vs 10-15), higher prices ($80-120/MWh vs $30-45/MWh for solar), and paired with co-location agreements or direct datacenter siting to minimize transmission costs and losses.

## Key Claims

- **13 nuclear datacenter deals announced as of May 2026, committing 9.8 GW of nuclear capacity.** *Evidence: strong* (SMRIntel nuclear data center deals tracker)
- **Every major hyperscaler has signed at least one nuclear PPA.** *Evidence: strong* (press releases: Microsoft/Constellation, Amazon/Talen, Google/Kairos, Meta/Constellation)
- **Corporate renewable PPAs hit 46 GW globally in 2024, with hyperscalers = 76%.** *Evidence: strong* (South Pole 2026 PPA Buyers Guide)
- **Solar PPA prices: $30–45/MWh (US 2025); nuclear PPAs estimated $80–120/MWh** — premium reflects 24/7 reliability. *Evidence: moderate*
- **Microsoft signed a 20-year PPA with Constellation for all output from Crane Clean Energy Center (835 MW)** — first nuclear restart driven by tech demand. *Evidence: strong* (Utility Dive, Bloomberg)
- **Vistra signed 20-yr PPA with AWS for 1,200 MW at Comanche Peak; Meta for ~2,600 MW at PJM nuclear sites.** *Evidence: strong* (Vistra Q1 2026 earnings release)
- **Constellation↔Microsoft (Sep 2023): 20-year PPA to restart Three Mile Island Unit 1 (Pennsylvania)** — the anchor deal of the procurement rush. *Evidence: moderate* (multi-source synthesis, [hyperscaler-nuclear-procurement](../../raw/hyperscaler-nuclear-procurement.md))
- **Google↔Kairos Power (Aug 2025) was the first corporate SMR PPA**: Hermes 2 (Oak Ridge) supplying 50 MW by 2030, scaling to 500 MW. *Evidence: moderate* (multi-source synthesis, [hyperscaler-nuclear-procurement](../../raw/hyperscaler-nuclear-procurement.md))
- **Meta↔Vistra/Oklo/TerraPower (2026): up to 6.6 GW of nuclear by 2035** — spanning Vistra existing plants (2.2 GW + 433 MW upgrades, 8-yr window), Oklo (1.2 GW, first reactors ~2030), and TerraPower (2.6 GW + 1.2 GW storage, two units online as soon as 2032). Neither Oklo nor TerraPower holds NRC construction permits yet. *Evidence: weak* (single news item, [Latitude Media](../../raw/meta-66gw-nuclear-deal.md))
- **The three procurement modes** hyperscalers use: (1) restart existing plants, (2) first corporate SMR PPAs, (3) multi-GW advanced-reactor development deals. *Evidence: moderate* (multi-source synthesis, [hyperscaler-nuclear-procurement](../../raw/hyperscaler-nuclear-procurement.md))

## Major Announced Nuclear Deals (as of June 2026)

| Buyer | Seller/Plant | MW | Type | Year |
|-------|--------------|----|------|------|
| Microsoft | Constellation / Crane (TMI restart) | 835 | physical, 20yr | 2027 |
| Amazon | Talen Energy / Susquehanna campus | 960 | co-location | 2024 |
| Amazon | Various SMR contracts | TBD | physical | 2030+ |
| Google | Kairos Power / Hermes 2 (first corp. SMR PPA, Aug 2025) | 50 → 500 | physical, fleet | 2030 |
| Google | X-energy Xe-100 | TBD | physical | 2030+ |
| Meta | Constellation / Clinton Power | TBD | physical, 20yr | 2027 |
| Meta | Vistra / PJM nuclear sites | ~2,600 | physical | TBD |
| Meta | Oklo / Ohio campus | 1,200 | physical (advanced) | 2030 |
| Meta | TerraPower / Natrium + storage | 2,600 + 1,200 storage | physical (advanced) | 2032 |
| Microsoft | Helion Energy / Orion | ~50 | physical | 2028 |
| Google | Commonwealth Fusion / ARC | 200 | physical | 2030s |
| AWS | Vistra / Comanche Peak | 1,200 | physical, 20yr | TBD |

*Meta's Vistra + Oklo + TerraPower legs together form the up-to-6.6 GW-by-2035 deal for the Prometheus supercluster (New Albany, OH). [Latitude Media](../../raw/meta-66gw-nuclear-deal.md).*

## Open Questions

- What price is being paid in the nuclear PPAs? (Most are confidential; estimates range $80-120/MWh)
- How does FERC's interconnection reform affect whether nuclear PPA power can reach co-located or nearby datacenters?
- If SMR construction is delayed, do the Google/Amazon SMR contracts trigger termination clauses?
- Will European hyperscalers (Microsoft, Google EU) replicate the US nuclear PPA model?

## Related Concepts

- [Conventional Nuclear & Restarts](./conventional-nuclear.md) — where the power comes from
- [Datacenter Power Demand](./datacenter-power-demand.md) — the demand side driving the deals
- [Baseload vs Intermittent](./baseload-vs-intermittent.md) — why nuclear preferred over renewables for these contracts

## Changelog

- **2026-06-15** — Initial compilation from web research (SMRIntel, South Pole, Build.inc, press releases)
- 2026-06-24 — Compiled new sources (meta-66gw-nuclear-deal, hyperscaler-nuclear-procurement)

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Cite as: MenFem Knowledge Base — https://menfem.com/kb/energy/concepts/power-purchase-agreements