Amazon Buys 1.92 GW of Nuclear Power for AWS

Amazon's Nuclear Energy Investment

This week marked a significant move by Amazon, aligning with a growing pattern of large technology companies directly procuring power from nuclear energy facilities.

Powering AWS with Nuclear Energy

The company will utilize 1.92 gigawatts of electricity sourced from Talen Energy’s Susquehanna nuclear power plant, located in Pennsylvania, to operate portions of its AWS cloud and AI server infrastructure. Amazon joins Microsoft and Meta as a leading hyperscaler engaging directly with major nuclear power operators.

From Behind-the-Meter to Front-of-the-Meter

While announced on Wednesday, Amazon’s agreement represents a modification of a pre-existing arrangement with Talen. Initially, the plan involved constructing a data center adjacent to the Susquehanna plant, drawing power directly without it first entering the electrical grid.

Regulators previously halted this initial proposal due to concerns about potential inequities, specifically that general customers would bear the costs associated with grid maintenance and upgrades. Currently, Susquehanna delivers power to the grid, incorporating transmission fees that support its ongoing operation and development.

The revised agreement positions Amazon’s power purchase agreement as a front-of-the-meter arrangement. This means the AWS data center will be billed similarly to other grid-connected customers. Talen anticipates reconfiguration of transmission lines in spring 2026, with the agreement extending through 2042.

Expanding Nuclear Capacity

Beyond the power purchase agreement, the two companies intend to explore the construction of small modular reactors (SMRs) “within Talen’s Pennsylvania footprint” and to increase power generation at existing nuclear plants.

Increasing output from established nuclear facilities is often a more streamlined process for adding capacity. Potential methods include utilizing more enriched fuel, optimizing operational settings for increased power output, or upgrading turbines for enhanced efficiency.

Industry Trend: Hyperscalers and Nuclear Power

Microsoft initiated this trend last year with an announcement of collaboration with Constellation Energy to reactivate a reactor at Three Mile Island, a project valued at $1.6 billion and capable of generating 835 megawatts. Meta followed suit earlier this month, also partnering with Constellation, to acquire the environmental benefits associated with 1.1 gigawatt of nuclear power from a plant in Illinois.

Amazon and Talen’s commitment to developing new SMRs represents a more ambitious undertaking. Numerous startups are actively pursuing this technology, aiming to reduce construction expenses through mass production of components. Amazon has already invested in X-energy, an SMR startup, which plans to add 300 megawatts of nuclear generating capacity in the Pacific Northwest and Virginia.

Addressing Grid Concerns

The expansion of existing reactors and the deployment of new SMRs are designed “to add net-new energy to the PJM grid,” according to Talen. This statement likely serves as a proactive measure to mitigate potential regulatory scrutiny regarding the financial impact on ratepayers.