TLDR:
- Amazon will power AWS operations with 1.92 GW from a Pennsylvania nuclear plant through a new deal with Talen Energy.
- The agreement includes plans for future small modular reactor projects, reflecting a long-term clean energy strategy.
- Nuclear provides Amazon with a reliable carbon-free alternative as cloud and AI demands grow.
- The shift aligns Amazon with Microsoft and Meta, marking a broader trend in big tech’s energy transition.
In a move to meet the soaring energy demands of its cloud computing and artificial intelligence operations, Amazon has inked a long-term deal with Talen Energy to draw nearly 2 gigawatts of electricity from the Susquehanna nuclear power plant in Pennsylvania.
The agreement places Amazon among a growing circle of tech giants like Microsoft and Meta included, turning to nuclear energy as a scalable, carbon-free solution for powering data centers.
Notably, the revised power purchase agreement, announced this week, modifies a prior arrangement that would have allowed Amazon to draw power directly from the plant through a behind-the-meter setup.
That earlier plan was scrapped after regulators raised concerns that it could let Amazon bypass grid-related transmission fees, effectively shifting infrastructure costs to other users. The new structure ensures Amazon pays standard transmission charges, keeping the utility model intact and addressing regulatory pushback.
Data Center Energy Needs Surge
Amazon Web Services (AWS), the company’s dominant cloud arm, continues to fuel Amazon’s overall growth, and with it, demand for electricity. While Amazon has already hit its 100% renewable energy match goal for global operations ahead of schedule, the next phase in its decarbonization strategy requires dependable, always-on sources of power. Nuclear, with its constant output and long operational life, offers precisely that.
Talen Energy said grid infrastructure will be updated by spring 2026 to support the energy transfer, and the deal stretches through 2042. Beyond supplying clean electricity, the two companies have also agreed to collaborate on the development of small modular reactors (SMRs) within Pennsylvania, laying groundwork for new sources of nuclear generation that can be added to the grid over time.
SMRs: The Next Frontier in Clean Tech Infrastructure
SMRs are compact nuclear reactors designed for faster deployment and lower construction costs than traditional nuclear plants. They also offer a flexible path to scaling power generation without requiring massive new installations. Amazon has already backed X-energy, a leading SMR technology firm, which is spearheading several projects, including a multi-phase deployment in Washington state that could eventually generate nearly one gigawatt of capacity.
In Virginia, Amazon is also working with Dominion Energy on a potential SMR project that could bring at least 300 megawatts of nuclear power to a region expecting an 85% increase in energy demand over the next 15 years. These moves reflect a strategic pivot from solely investing in solar and wind, which remain intermittent by nature, to energy systems that can run uninterrupted regardless of weather or time of day.
Preserving Existing Reactors
Nuclear expansion isn’t just about building new technology. It’s also about maintaining existing assets. Amazon’s arrangement with Talen Energy not only secures a long-term source of carbon-free power but also helps preserve the economic lifeline that the Susquehanna plant provides to its surrounding community. That includes 900 existing jobs and additional employment opportunities linked to the development of Amazon’s data center campus nearby.
