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Talen Energy and Amazon Partner on Nuclear Power Deal to Fuel AWS Data Centers

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U.S. utility Talen Energy announced an expanded partnership with Amazon to supply up to 1,920 megawatts of carbon-free electricity from its Susquehanna nuclear plant in Pennsylvania to Amazon Web Services (AWS) data centers. The long-term agreement, lasting until 2042, provides Talen with a stable revenue stream while supporting Amazon’s growing energy needs for AI and cloud operations.

Both companies are also exploring the construction of new Small Modular Reactors within Talen’s Pennsylvania footprint and considering expanding the existing nuclear plant’s capacity. This deal comes amid rising U.S. electricity demand for data centers and AI workloads—the first increase in two decades—pushing Big Tech firms to secure reliable and sustainable power sources.

Earlier this month, Constellation Energy reached a similar deal with Meta Platforms to keep an Illinois nuclear reactor operational for 20 more years.

Following the announcement, Talen Energy shares rose nearly 8% in premarket trading.

Kevin Miller, AWS vice president of global data centers, highlighted the investment’s local economic impact, calling it the largest private sector investment in Pennsylvania’s history with $20 billion committed and 1,250 high-skilled jobs created. Miller also emphasized AWS’s commitment to powering its infrastructure with carbon-free energy through this collaboration.

Talen Energy Weighs New Data Center Power Plans After Amazon Deal Hits Regulatory Snag

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Talen Energy is exploring alternative methods to supply electricity to data centers after U.S. energy regulators restricted a groundbreaking co-location deal with Amazon, executives said Thursday.

The move follows a Federal Energy Regulatory Commission (FERC) ruling that capped electricity delivery from Talen’s Susquehanna nuclear power plant in Pennsylvania to Amazon’s data center at 300 megawatts, down from the 960 megawatts originally proposed. FERC cited potential risks to grid reliability and public electricity costs.

Context:

  • Co-located arrangements—where data centers are built near power plants to bypass grid delays—have become attractive to Big Tech and power producers amid surging data demands.

  • Talen’s Amazon deal, announced in early 2024, was a first-of-its-kind setup that aimed to rapidly scale power delivery without waiting for traditional grid connection queues.

Key Developments:

  • Talen CEO Mac McFarland said on Thursday’s earnings call that the company is now considering traditional grid-connected contracts and other commercial agreements to power future data center partnerships.

  • Despite the FERC setback, Talen is still supplying Amazon, with expectations to deliver 120 MW by year-end.

  • The company is appealing the FERC decision and expects a court schedule to be set soon.

Broader Industry Shift:

Talen isn’t alone. Constellation Energy, another major nuclear operator, also announced this week it is shifting focus to more conventional data center energy deals after facing similar challenges with co-location concepts.

Why It Matters:

The FERC ruling marks a pivotal moment in how power for AI and cloud-driven data centers is allocated—especially when nuclear plants are seen as low-carbon, high-capacity sources suitable for tech’s skyrocketing energy needs. The outcome of Talen’s appeal may reshape how future tech-power partnerships are structured.

Vanguard Group Increases Talen Energy Stake to 10.4% Amid Growing AI Demand

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Vanguard Group has raised its stake in Talen Energy Corp to 10.4%, according to a filing made public on Wednesday. The asset management firm, which is now the second-largest shareholder of the independent power producer, purchased over 4 million shares of Talen Energy’s common stock. Prior to this acquisition, Vanguard held about 9.9% of Talen Energy’s outstanding shares as of October.

The increase in Vanguard’s stake comes at a time when demand for electricity has surged due to the growing investment in artificial intelligence (AI) by major tech companies. Data centers, which are central to AI operations, require significant power, and utilities like Talen Energy are seeing the benefits. Talen Energy’s stock price has tripled in 2024, and it continued to show slight gains in after-hours trading on Wednesday.