Regulator blocks Amazon's nuclear datacentre plans

Cites grid reliability and cost

Amazon's ambitious plans to power its datacentres with nuclear energy have hit a major roadblock.

The USA’s Federal Energy Regulatory Commission (FERC) has rejected a proposal to increase power supply from Pennsylvania's Susquehanna nuclear plant to an Amazon datacentre, citing concerns about grid reliability and cost implications.

The decision stems from an amended Interconnection Service Agreement (ISA) submitted by PJM Interconnection, the regional grid operator, and Talen Energy, owner of the Susquehanna plant.

Talen had sold the campus to Amazon in March for $650 million, marking a milestone as the first US deal linking a nuclear power plant directly to a tech giant's datacentre.

The proposal from PJM Interconnection aimed to increase the amount of power flowing directly to Amazon's Cumulus datacentre – located next to the Susquehanna plant – from 300 megawatts to 480 megawatts.

However, the move faced opposition from regional utilities like American Electric Power (AEP) and Exelon, who argued that the increased power flow could impact grid stability and lead to higher costs for consumers.

FERC Commissioner Mark Christie expressed his own concerns about the potential complexities and ramifications of these types of arrangements:

"Co-location arrangements of the type presented here present an array of complicated, nuanced and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs.”

Christie warned that approving the proposed amendment now would set a precedent that could be used to justify identical or similar arrangements in future cases.

The Commission also highlighted the need for a rigorous evaluation of such proposals to ensure they align with broader grid reliability and economic considerations.

FERC chair Willie L. Phillips disagreed with Christie. He argued the decision could hinder the development of AI and other data-intensive technologies, which rely on reliable and sustainable energy sources.

Talen Energy said the FERC's decision will have a "chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey."

Talen is said to be assessing its next steps, including potential commercial solutions to maintain a viable relationship with Amazon.

Despite the setback, Amazon's datacentre can still draw 300 megawatts from the Susquehanna plant.

The ruling comes as more and more tech firms turn to nuclear energy to power their AI operations.

In recent months, Google, Amazon and Microsoft have announced significant investments in nuclear power, including deals to purchase power from small modular reactors (SMRs) and to reopen existing nuclear plants

Last month, AWS said it had signed three new agreements to advance nuclear energy projects, including facilitating the construction of several SMRs.

In Washington State, Amazon has entered into an agreement with Energy Northwest, a consortium of state public utilities, to develop four advanced SMRs.

Amazon is also investing in X-Energy (for once, not one of Elon Musk’s firms), a leading developer of next-generation SMR reactors. X-Energy's reactor design will be implemented in the Energy Northwest project.

Also last month, Google announced a partnership with Kairos Power to develop SMRs utilising molten salt cooling technology. The agreement aims to bring the first nuclear reactor online by 2030.