Amazon Web Services (AWS) has signed a long-term deal with Talen Energy to receive up to 1,920 megawatts of electricity from the Susquehanna nuclear plant in Pennsylvania.

The agreement runs through 2042 and supports AWS’s growing need for carbon-free energy to power its AI and cloud operations.

The project includes a US$20 billion investment and is expected to create 1,250 high-skilled jobs in Pennsylvania.

The partnership will also explore the potential construction of Small Modular Reactors (SMRs) and the possibility of increasing the plant’s electricity output.

Talen Energy’s shares rose nearly 8% in premarket trading after the announcement.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Data center power demand is forcing tech giants toward nuclear solutions

The Talen-Amazon deal reflects the immense power demands from AI and cloud computing that are reshaping the energy landscape.

Goldman Sachs projects a staggering 165% increase in data center power consumption by 2030, with AI workloads growing from 14% to 27% of that demand 1.

McKinsey research indicates data centers currently consume 3-4% of total U.S. electricity but could reach 11-12% by 2030, requiring over $500 billion in power infrastructure investments 2.

This explains why tech companies are seeking long-term contracts with nuclear providers. They need massive amounts of reliable, carbon-free power that renewables alone cannot deliver consistently.

The Department of Energy anticipates data centers could consume up to 9% of U.S. electricity generation by 2030, up from 4% in 2023, creating unprecedented pressure on the grid 3.

2️⃣ Tech companies are leading a corporate nuclear renaissance

The Talen-Amazon partnership represents a broader strategic pivot happening across Big Tech toward nuclear energy.

Amazon, Google, and Meta have collectively pledged to triple global nuclear capacity by 2050, signaling a fundamental shift in corporate energy strategy beyond just renewable investments 4.

This marks a significant departure from previous corporate clean energy approaches, which primarily focused on wind and solar power purchase agreements (PPAs).

The exploration of Small Modular Reactors (SMRs) in this deal follows an industry-wide interest in these technologies, which promise enhanced safety and reduced costs compared to traditional nuclear plants 5.

The shift toward nuclear is directly motivated by the urgency of securing firm, reliable power for AI operations that cannot tolerate intermittency issues associated with renewable sources 4.

3️⃣ Corporate clean energy procurement has evolved into a sophisticated market

Amazon’s nuclear deal with Talen follows its established pattern of aggressive clean energy acquisition, having led all corporations with 8.8 GW of new clean energy purchases in 2023 alone 6.

The corporate clean energy market has grown dramatically, from just 10 GW of contracts in 2017 to 77 GW by 2023, with Amazon, Google, and Meta driving most of this expansion 7.

Companies are now employing increasingly sophisticated procurement strategies, moving beyond simple annual matching to approaches like “carbon matching” and hourly energy matching that more precisely align generation with consumption 8.

This partnership represents a new phase of corporate energy procurement where companies secure decades-long commitments directly with generators, rather than just purchasing renewable energy certificates 7.

The length of this agreement (until 2042) demonstrates how tech companies are making unprecedented long-term power commitments to secure their energy future amid growing competition for limited clean energy resources.