Amazon buys nuclear-powered data center from Talen

March 7, 2024, 7:01AMNuclear News
Susquehanna nuclear plant in Salem Township, Penn., along with the data center in foreground. (Photo: Talen Energy)

Talen Energy announced its sale of a 960-megawatt data center campus to cloud service provider Amazon Web Services (AWS), a subsidiary of Amazon, for $650 million.

The data center, Cumulus Data Assets, sits on a 1,200-acre campus in Pennsylvania and is directly powered by the adjacent Susquehanna Steam Electric Station, which generates 2.5 gigawatts of power.

“We believe this is a transformative transaction with long term benefits,” said Mark “Mac” McFarland, Talen president and chief executive officer of Talen, on a Monday call with investors and media. As power demand continues to rise worldwide, “data centers are at the heart of that growth,” he added.

“Several years ago, Amazon set an ambitious goal to reach net-zero carbon by 2040—ten years ahead of the Paris Agreement. As part of that goal, we’re on a path to power our operations with 100 percent renewable energy by 2025—five years ahead of our original 2030 target,” an Amazon spokesperson said. “To supplement our wind and solar energy projects, which depend on weather conditions to generate energy, we’re also exploring new innovations and technologies and investing in other sources of clean, carbon-free energy. This agreement with Talen Energy for carbon-free energy is one project in that effort.”

About Talen: The Houston, Texas–based company is the majority owner and operator of the Susquehanna plant. Susquehanna is the sixth largest nuclear power plant in the United States and produces 63 million kilowatt hours per day. Its two General Electric boiling water reactors have been on line since 1983 and are licensed to operate through 2042 and 2044, respectively.

In 2022, Talen filed for Chapter 11 bankruptcy in May 2022 as part of a financial restructuring. The company exited bankruptcy in 2023, and officials have said that this recent transaction with AWS is a boost to its cash flow. After paying off debts, interest and other costs, Talen expects net proceeds of $361 million from the deal with Amazon.

What’s next: According to Talen Energy’s investor presentation, it will supply fixed-price nuclear power to AWS’s new data center as it is built. AWS has minimum contractual power commitments that ramp up in 120-megawatt increments over several years. The cloud service giant has a one-time option to cap commitments at 480 megawatts and two 10-year extension options tied to nuclear license renewals.

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