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Amazon is capitalizing on a growing movement among major technology firms to procure electricity from established nuclear power facilities.
Amazon Secures Nuclear Energy for AWS Cloud Operations
The tech giant is set to power a significant portion of its AWS cloud computing and AI infrastructure with 1.92 gigawatts of power sourced from Talen Energy’s Susquehanna nuclear plant in Pennsylvania. This nuclear energy agreement positions Amazon as the latest large-scale consumer, or hyperscaler, to directly engage with major nuclear operators, following similar moves by Microsoft and Meta.
Revised Agreement Enhances Grid Integration
Announced on Wednesday, Amazon’s deal represents a modification of an existing arrangement with Talen. The original plan involved Amazon constructing a data center adjacent to the Susquehanna facility, drawing power directly from the plant without grid transmission. However, regulators rejected that initial proposal due to concerns that customers would bear disproportionate grid maintenance costs. Under the revised agreement, Susquehanna will supply power to the grid, subjecting every kilowatt-hour to typical transmission fees.
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Key Details of the Power Purchase Agreement
This modified power purchase agreement (PPA) positions Amazon’s energy procurement as grid-connected, similar to other customers. According to Talen, the transmission lines will be reconfigured by the spring of 2026, and the PPA is valid through 2042.
Potential Expansion with Small Modular Reactors (SMRs)
Looking ahead, Amazon and Talen have announced plans to explore the development of small modular reactors (SMRs) within Talen’s operational area in Pennsylvania, aiming to augment electricity generation at existing nuclear power plants.
Optimizing Existing Plants for Higher Output
Expanding capacity at current plants typically represents a more straightforward approach to increasing nuclear power generation. Strategies for expansion could include:
- Employing higher-enriched fuel for increased heat output.
- Refining operational parameters to maximize power generation.
- Upgrading turbines to achieve greater efficiency.
Industry Trend: Tech Giants Embrace Nuclear Power
Microsoft initiated this trend last year, partnering with Constellation Energy to reactivate a reactor at Three Mile Island, a $1.6 billion initiative set to generate 835 megawatts. Meta followed suit earlier this month, also collaborating with Constellation to purchase the “clean energy attributes” of a 1.1-gigawatt nuclear facility in Illinois.
Amazon’s Venture into Small Modular Reactors
Amazon and Talen’s exploration of new SMRs demonstrates the broader industry interest in this technology. Several startups are dedicated to SMR development, with the goal of lowering construction expenses through mass production of components. Amazon has invested in X-energy, an SMR startup planning to add 300 megawatts of nuclear energy capacity in the Pacific Northwest and Virginia.
Talen has stated the expanded capacity at existing reactors and new SMRs are designed “to add net-new energy to the PJM grid,” the region’s electrical grid operator, likely aimed at preempting regulatory concerns regarding potential cost burdens for ratepayers.