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Amazon Secures Nuclear Power Supply for Data Centers

Amazon's new data center facility next to the Susquehanna nuclear power plant.

News Summary

Amazon has amended its power purchase agreement with Talen Energy to secure up to 1,920 MW of nuclear power for its datacenters near the Susquehanna power plant. This revised agreement extends until 2042 and includes plans for small modular reactor construction. The partnership is expected to generate substantial revenue for Talen and create significant job opportunities in Pennsylvania, aligning with the state’s push for high-tech investments.

Pennsylvania – Amazon has amended its power purchase agreement (PPA) with Talen Energy to secure a substantial supply of nuclear power—that is 1,920 MW—for its datacenters located adjacent to the Susquehanna nuclear power plant. The revised agreement, which extends until 2042, enables Amazon to enhance its energy procurement for its expanding operations.

The new contract includes provisions for exploring the construction of small modular reactors (SMRs) and financial backing aimed at upgrading the Susquehanna facility to increase its energy output. Talen Energy made the announcement on Wednesday, emphasizing its commitment to support Amazon’s datacenter operations in the region.

Talen’s subsidiary Cumulus, responsible for constructing the datacenter facility next to the Susquehanna plant, opened its doors in 2023. This facility was specifically designed for energy co-location, catering to both hyperscalers and cryptocurrency mining firms. Amazon finalized its acquisition of the Cumulus datacenter complex in March 2024.

Initially, an interconnection service agreement (ISA) permitted energy delivery directly from Susquehanna to Cumulus. However, this arrangement was met with opposition from utility companies when Amazon sought to increase the co-location load from 300 MW to 480 MW in November 2024. These utility companies contended that the ISA could jeopardize grid stability for local communities. The Federal Energy Regulatory Commission (FERC) sided with the utility companies and blocked the amendment. Despite Talen Energy’s appeal against FERC’s decision, the commission reaffirmed its position in April. Currently, Talen is appealing this decision in the Fifth Circuit Court of Appeals.

The newly amended PPA circumvents the need for FERC approval altogether, transitioning from a co-location agreement to a “front-of-the-meter” deal. This change allows Amazon the flexibility to draw power from the grid for its increased energy consumption without imposing any direct impact on delivery preferences throughout the local grid.

Furthermore, the new agreement aligns with the recent announcement made by Pennsylvania’s Governor Josh Shapiro regarding Amazon’s intention to invest at least $20 billion in multiple high-tech cloud computing and AI innovation campuses within the state. This investment is expected to result in the creation of 1,250 high-skilled jobs, significantly boosting the local economy and establishing it as one of the largest private sector investments in Pennsylvania’s history.

Under this new contract, Talen anticipates generating approximately $18 billion in revenue over its duration. The agreement outlines a schedule for power delivery, targeting 840 MW to 1,200 MW by 2029 and projecting up to 1,920 MW by 2032. In this partnership, Talen will act as the retail power supplier to Amazon Web Services (AWS), while PPL Electric Utilities is designated to manage transmission and delivery aspects.

Both Talen and Amazon are evaluating the potential addition of new energy sources to the PJM grid through collaborations on prospective SMR projects and enhancements to existing nuclear facilities. Currently, Talen’s energy generation portfolio consists of around 10.7 GW of power infrastructure, primarily catering to wholesale energy markets in the Mid-Atlantic region. In the last year alone, Talen’s share in the Susquehanna plant produced over 18 GWh of energy at a competitive overall cost.

This agreement is indicative of a broader trend wherein technology companies are increasingly securing long-term power arrangements to reinforce their infrastructure expansion plans, especially within the context of growing electricity demands spurred by data center proliferation and artificial intelligence workloads.