Constellation Energy Announces Capex Plans

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

Constellation Energy announced a $3.9 billion capital spending plan for the year and lifted its share buyback authorization.

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Spending Plans

Constellation Energy announced a $3.9 billion capital spending plan, as interest grows in the company's clean power output via the U.S.' largest nuclear fleet. Constellation recently acquired Calpine Corporation, which operates geothermal plants and multiple natural gas-fired plants. Both nuclear and natural gas-fired power are expected to be big winners in the rapid growth in U.S. power demand driven by artificial intelligence (AI) data centers.

While the allocation of capital wasn't especially detailed (at least in the initial stages of the company's 2026 Business and Earnings Outlook conference event), Constellation in a related release noted its ability to add about 9,300 megawatts (MW) of generating capacity "through license extensions, incremental generation and customer focused demand solutions."

Nuclear Spending

A few projects almost certainly will be at the receiving end of spending this year. The project that has garnered the most press is the restart of Unit 1 at the former Three Mile Island nuclear power plant in Pennsylvania, now renamed the Crane Clean Energy Center. The unit was shuttered in 2019 for economic reasons. The restart timeline has been shortened, with the unit now expected to begin operations in 2027. All the unit's 835-MW output has been purchased by Microsoft Corporation. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here to learn more about the project.

Similarly, Constellation struck an agreement last summer with Meta Platforms for that company to take the entirety of the plant's generation from the Clinton Clean Energy Center in Illinois. Included in the deal is a 30-MW uprate project, which will boost the plant's output to 1,121 MW. Industrial Info also is tracking a potential turbine rotor replacement at the plant. Both projects are expected to be completed within a relatively short time after construction kicks off.

In addition to the Clinton uprate, Industrial Info is tracking potential future nuclear uprates at the company's Calvert Cliffs plant in Maryland, Limerick plant in Pennsylvania, and Byron plant in Illinois, although all of these are expected to occur more than year out and may not be a part of Constellation's announced $3.9 billion spend unless schedules are altered.

Other Upcoming Spending

One project on Constellation's slate this year is the installation of eight natural gas-fired simple-cycle units next to its Wolf Hollow 2 plant in Granbury, Texas. The units will be used as peaking units in times of heavy power demand. The two existing combined-cycle units of Wolf Hollow 2 began operating in 2017 and provide 1,115 MW of power, but Constellation is looking to give the units a boost when demand becomes tight. The addition of the simple-cycle units, however, has faced local opposition over noise and emissions concerns. The eight 37.5-MW units would provide up to 300 MW of additional power when needed. Subscribers can learn more by viewing the project report.

Investors Nonplussed

Despite Constellation's projected base earnings growth of more than 20% through 2030, the company's investors seemed unimpressed at a lack of plans and agreements that would cement future power sales and pave the way for increased growth spending. Shares were down as the general announcement regarding the company's plans was released and in the early stages of a conference call regarding the company's outlook. On a positive note for investors, Constellation boosted its share buyback authorization to $5 billion.

Key Takeaways

• Constellation Energy has allotted $3.9 billion in capital spending for the coming year.
• The company noted about 9,300 megawatts (MW) of generating capacity available "through license extensions, incremental generation and customer focused demand solutions."
• The company's acquisition of Calpine Corporation was finalized in January.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 trillion (USD).