A substation near the LC1 CloudHQ data center in Ashburn, Virginia, on March 27, 2024.
Nathan Howard | Bloomberg | Getty Images
Tech companies’ efforts to use nuclear power plants to directly power artificial intelligence have hit a major roadblock after federal regulators rejected a request to add power to Amazon’s data centers.
The Federal Energy Regulatory Commission on Friday rejected a request to increase power delivery from Pennsylvania’s Susquehanna nuclear plant to Amazon’s data center campus.
independent power producer conversation energy In March, the company sold its data center campus to Amazon for $650 million, which will be powered by a nuclear power plant, the first of its kind.
Talen’s shares closed down more than 2% on Monday after FERC issued the denial order. Constellation Energy and Vistra Corporation Shares of the two companies fell more than 12% and about 3%, respectively, as investors expressed sympathy. Constellation has its worst day since the company’s spinoff Exelon February 2022.
Grid operator PJM Interconnection and the Talen-owned Susquehanna plant have submitted requests to increase the amount of power delivered to Amazon’s data centers from the current 300 megawatts to 480 megawatts.
In his opinion supporting the order, FERC Commissioner Mark Christie said the arrangement, known as power industry co-location, “could have a dramatic impact on grid reliability and consumer costs.”
Tallon said in a statement Monday that FERC’s decision will have a “chilling effect on economic development in states such as Pennsylvania, Ohio and New Jersey.” The utility said it was evaluating its options and “focused on commercial solutions”.
According to Talen, Amazon’s data center campus still has access to 300 megawatts of power from the Susquehanna nuclear power plant. The company said the deal was “fair and reasonable and in the best interests of consumers.”
FERC’s decision will not directly affect Constellation’s plans to restart the Three Mile Island nuclear power plant under a 2028 power purchase agreement Microsoft. Three Mile Island will feed power to the grid, rather than directly powering Microsoft’s data centers.
But Constellation and Vistra have expressed interest in striking deals with tech companies similar to the one Talen has with Amazon.
Data centers that power artificial intelligence and cloud computing are consuming increasing amounts of electricity. Utilities are scrambling to find ways to power growing electrical loads. Technology companies are increasingly turning to nuclear energy because it is reliable, fossil-free and emits no carbon dioxide.
Vistra and Constellation have been two of the best-performing stocks in the S&P 500 this year as investors bet on the potential windfall from the technology sector’s growing energy needs.
Vistra’s stock price has more than tripled this year, even surpassing NVIDIA Become the best performing stock in the market. Constellation shares have more than doubled and are the No. 4 stock in the S&P 500 this year.
About The Author
