Storyline
Looking for a quick fix for their fast-growing electricity diets, tech giants are increasingly looking to strike deals with power plant owners to plug in directly, avoiding a long and expensive process of hooking into a fraying electric grid that serves everyone else.
It’s raising questions over whether diverting power to higher-paying customers will leave enough for others and whether it’s fair to excuse big power users from paying for the grid. Federal regulators are trying to figure out what to do about it, and quickly.
Front and center is the data center that Amazon’s cloud computing subsidiary, Amazon Web Services (AWS), is building next to the Susquehanna nuclear plant in eastern Pennsylvania.
The arrangement between the plant’s owners and AWS is the first such to come before the Federal Energy Regulatory Commission (FERC). For now, FERC has rejected a deal that could eventually send 960 megawatts—about 40% of the plant’s capacity—to the data center. That’s enough to power more than a half-million homes.
Big Tech also wants to stand up their centers fast. But tech’s voracious appetite for energy comes at a time when the power supply is already strained by efforts to shift away from planet-warming fossil fuels. Plugging directly into a power plant would take years off their development timelines.
The profit potential is one that other nuclear plant operators, in particular, are embracing after years of financial distress and frustration with how they are paid in the broader electricity markets. Many say they have been forced to compete in some markets against a flood of cheap natural gas as well as state-subsidized solar and wind energy.
Power plant owners also say the arrangement benefits the wider public, by bypassing the costly buildout of long power lines and leaving more transmission capacity on the grid for everyone else.
Susquehanna’s owners say the data center won’t be on the grid and shouldn’t have to pay to maintain it.
But critics contend that the power plant itself is benefiting from taxpayer subsidies and ratepayer-subsidized services, and shouldn’t be able to strike deals with private customers that could increase costs for others.
This article was provided by The Associated Press.
Script
[Amazon data center and Susquehanna nuclear power plant]
Benjamin Lee (interview): “The Amazon plan with the nuclear power plant here is interesting because Talen Energy operates the nuclear power plant and they essentially built a data center next to its power plant and sold it to Amazon. And they have been authorized to build up to 300 megawatts of data center capacity next to the power plant. And they wanted to increase that capacity out to 480 megawatts. And that was it… that was in a goal to increase the amount of computing that would be done and connected directly to a nuclear nuclear power plant, but also to to increase the cash flow going to to Talen Energy and and its infrastructure. So this is an advantage for Amazon because it gets direct access to a very large amount of energy. It can build two, three, maybe four very large AI-based data centers within that power budget, and it helps the nuclear power plant with with its revenue streams.”
[Susquehanna nuclear power plant and Amazon data center]
Benjamin Lee (interview): “FERC (Federal Energy Regulatory Commission) has rejected the decision to increase that out to 480. So there was an initial approval for 300 megawatts and a rejection at 480 megawatts. This decision really reflects increasing concerns about the extent to which this connection between Amazon and the nuclear power plant is truly independent of the broader grid. There are concerns that connecting that much data center power could compute directly to nuclear imposes a risk to grid stability. And it also may pose a risk to ratepayers who may have to share some of these significant costs associated with the grid, for example, interconnection costs, transmission line costs, etc.”
[Front view of cooling towers at Susquehanna nuclear plant]
[Side view of cooling towers at Susquehanna nuclear plant]
[Amazon data center and Susquehanna nuclear plant]
Benjamin Lee (interview): “Now, this is a departure from how data centers normally procure energy, because normally a data centers would connect with the grid operator and say, I would like to build a data center here and you will give me the electricity that we’ve contracted to purchase. And they could be coming from any source. They could be coming from nuclear, they could be coming from wind or solar, and they’re just electrons flowing through the grid. This setup with Amazon and the nuclear power plant is a more direct connection that we are beginning to see data centers explore.”
[Steam coming from cooling towers at Susquehanna nuclear plant]
[Susquehanna nuclear plant and fence]
Benjamin Lee (interview): “I think in the near term AI is moving so quickly. We are moving beyond language models to multiple modalities. So in encountering video and audio and other forms of data, and we don’t yet know the extent of the AI model’s capabilities. So I would be concerned if we start artificially constraining our analysis of what these models are capable of simply because we are constrained by the energy being used. I think we need to extend the frontier. We need to be on that frontier. And that means supplying the right amount of energy for these 100 megawatt data centers or larger. So I think we need to be able to build these data centers and supply them with energy. And in the near term, this may be continued investment in wind and solar. This may be refurbishing existing power plants that might have been decommissioned. Ideally, they are nuclear and not coal or or other other dirtier forms of energy. And to be honest, natural gas may have a role to play here because the US is so abundant in natural gas.”
[Susquehanna nuclear plant and homes]
This script was provided by The Associated Press.
