The Federal Energy Regulatory Commission (FERC) has rejected an amended grid connection agreement that was critical to Amazon’s plan to build a data center next to Talen Energy Corp.’s Susquehanna nuclear plant and draw power from it.
The 2-1 decision killed a proposal that would have allowed the plant’s operator, PJM Interconnection LLC, to increase the amount of power available to the data center through a direct connection.
According to reporting by Engineering News-Record, the FERC found that the applicants “failed to meet the high burden” for proving the amended provisions are necessary. In its order, written by Acting Deputy Secretary Carlos Clay, FERC questioned whether PJM intends to offer the terms to similarly situated interconnection customers, even though the company had stated that the proposed amendments were developed to address the circumstances of the Amazon project.
Talen Energy told ENR that it can still develop the first phases of the planned Amazon Web Services data center at the site of its plant despite the energy regulator’s ruling.
“Talen believes FERC erred and we are evaluating our options with a focus on commercial solutions,” the energy firm said in a statement.
The company previously reached a $650 million agreement to sell its data center campus to Amazon, along with a commitment to provide power to the facility. According to Talen’s shared plans, Amazon may develop the campus to support up to 960 MW. Talen noted it would seek approval of the updated ISA as development of the project’s initial phases continues with the available 300 MW of co-located capacity.
FERC did not address other concerns raised during the process, such as whether agreements like this might impact grid demand or result in costs for other power customers.
The commissioners’ decision coincided with FERC’s technical conference on large power loads co-located at generating facilities. In a statement, Talen described the co-location arrangement with Amazon as “part of the solution” to the issues discussed at the conference.
“This approach delivers service to the customer quickly and without the need for costly transmission upgrades to support large-load demand,” Talen added.
Amazon and Talen’s project is not the only ongoing attempt to use nuclear power plants to power new data centers in the U.S. Constellation Energy Corp. And Microsoft Corp. recently entered into a 20-year agreement which would see Three Mile Island Nuclear Station’s unit 1 in Middletown, Pa., restarted to power Microsoft’s growing arsenal of data centers.
According to ENR, Constellation’s president and CEO, Joseph Dominguez, said on a quarterly financial results call on Nov. 4 that the FERC ruling “is not the final [agency] word on co-location,” and that he expects it will provide more guidance, arguing that co-location “remains one of the best ways for the U.S. to quickly build the large data centers that are necessary to lead on [artificial intelligence].”
Dominguez also outlined his vision for how co-location should work, saying that the power should always go to the grid first during an emergency and, if a co-located load has backup power, it should be able to offer that power to the grid, subject to permitting rules. He said the co-located load should also have to pay its share of grid costs for what it uses.
“Frankly, I think part of the issue with the [agreement] proceeding is that it did not bring these issues together and, understandably, some of the commissioners want to see the complete package,” Dominguez said.
Data Center Boom
These attempts to use nuclear plants to power data centers are a result of the ongoing boom in data center construction – and the subsequent energy needs of those facilities.
The U.S. has more data centers than any other country in the world. As of March 2024, there were 5,381 data centers operating on American soil, according to data from Statista.com. For comparison, Germany has the second-most data centers of any country in the world with just 521.
Every one of those data centers demands an extraordinary amount of energy to power it, which has placed added pressure on the U.S.’s aging electrical grid.
“The exponential growth of data centers with a tremendous appetite for electricity rapidly is outpacing the capacity of utilities to meet their needs,” writes Jack Rogers on Globest.com. “Pushing data center developers to prioritize new markets where they can be sure they can hook up to the grid.”
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