Amazon buys nuclear-powered data centre from Talen

US-based Talen Energy Corporation has sold its Cumulus data centre campus in Pennsylvania to Amazon subsidiary Amazon Web Services (AWS) for $650m. This includes a long-term agreement to provide power from Talen's Susquehanna NPP. The 2,500 MWe adjacent Susquehanna Steam Electric Station currently supplies power to the data centre.

13 March 2024

The $650m will be paid in stages – $350m on closing and $300m to be released on the attainment of development milestones later this year. Talen will also receive additional revenue from AWS related to sales of Susquehanna's energy to the grid.

“We believe this is a transformative transaction with long term benefits,” said Talen President & CEO Mark “Mac” McFarland, in a call with investors and media. As power demand continues to rise worldwide, “data centres are at the heart of that growth,” he noted.

Texas-based Talen is the majority owner and operator of the Susquehanna plant with 90% owned and operated by Talen subsidiary Susquehanna Nuclear. Allegheny Electric owns the other 10%. The plant’s two General Electric boiling water reactors began operation in 1983 and are licensed to operate until 2042 and 2044. In 2022, Talen filed for Chapter 11 bankruptcy as part of a financial restructuring, exiting bankruptcy in 2023. The transaction with AWS is expected to boost to its cash flow. After paying off debts, interest and other costs, Talen expects net proceeds of $361m from the deal.

The Cumulus campus is directly connected to the NPP. The data centre's four substations have a total potential 960 MW of redundant capacity. This includes 200 MW currently associated with the Nautilus cryptocurrency facility, in which Talen will retain its 75% interest. A further 240 MW of redundant capacity for data centres is expected to be ready this year. The campus has a "robust and redundant" fibre network.

According to Talen Energy’s investor presentation, it will supply fixed-price nuclear power to AWS’s new data centre as it is built. AWS has minimum contractual power commitments increasing in 120 MW increments over several years. AWS has a one-time option to cap commitments at 480 MW and two 10-year extension options tied to nuclear licence renewals.

"Power demand is growing for the first time in years, and AI and data centres are at the heart of that growth," McFarland said. "Data from the International Energy Agency suggests that energy demand from data centres, AI and cryptocurrencies could more than double over the next three years."

He added that the transaction will benefit the wider community by creating jobs and catalysing economic development as well as strengthening the Susquehanna plant itself as a major employer and significant taxpayer.