Dive Brief:
- Amazon has signed a new power purchase agreement with Talen Energy to run its data centers in Pennsylvania on carbon-free nuclear energy, the two companies announced last week.
- Under the PPA, Talen will provide Amazon with 1,920 megawatts of nuclear power until 2042, though the energy company estimates it will follow an accelerated power delivery schedule and provide the full volume no later than 2032. The agreement also comes with an option to further extend its duration.
- Talen said it will source the electricity from its power plant in Susquehanna, Pennsylvania, and help support Amazon Web Services data centers — especially its artificial intelligence and cloud operations — in the region and throughout the state.
Dive Insight:
Amazon and Talen said they will explore building small modular reactors in the region, which are significantly smaller and more compact than traditional nuclear power plants. The energy producer said this, in turn, will also help it expand the Pennsylvania nuclear plant’s output.
The long-term deal is set to reduce Talen’s market risk considerably and lower its reliance on federal nuclear production tax credits, according to the energy producer. Talen President and CEO Mac McFarland said in a June 11 release that the PPA is designed to provide the company a “long-term, steady source of revenue and greater balance sheet flexibility through contracted revenues.”
“Talen is well-positioned to support Amazon’s energy needs as it invests further in the Commonwealth of Pennsylvania,” he added.
Amazon joins several other tech peers in turning to nuclear energy to power its operations as the sector explores how to best balance sustainability goals and growing data center energy needs driven by AI.
Earlier this month, Meta and energy producer Constellation Energy announced a 20-year nuclear power purchase agreement that is set to give the social media and tech conglomerate access to zero emissions power for its AI goals and help keep its Illinois facility online. The agreement will give Meta 1,121 megawatts of nuclear energy beginning in June 2027.
Prior to this, Amazon and Meta joined Google and several other major energy users to sign a pledge that supports nuclear energy’s role in creating energy resiliency and “at least” tripling global nuclear capacity by 2050.
