Amazon Expands Data Center Plans Tied to Pa. Nuclear Plant

Amazon announced that it plans to spend at least $20 billion to build two AI data center complexes in Pennsylvania, one of which will be adjacent to a nuclear power plant in Luzerne  County.

The complexes will get their power from that nuclear plant after Talen Energy announced that Amazon had entered into a power purchase agreement for 1,920 megawatts (MW) from its Susquehanna nuclear plant. Talen expected to earn about $18 billion from the contract, which runs through 2042 and calls for delivering 840 to 1,200 MW of power in 2029 scaling to 1,920 MW in 2032.

Gov. Josh Shapiro said Amazon’s commitment represents “the largest private sector investment in the history of Pennsylvania” that will create 1,250 highly-skilled, good-paying jobs. The first two campuses will be in Luzerne and Bucks counties, with the Luzerne data center located near the Susquehanna plant. The second complex will be at a redevelopment project in Bucks County.

The deal comes as the state and Mid-Atlantic regional electric grid operator PJM Interconnection are facing increasing demand for electricity, much of it coming from data center operators, and trying to balance that with maintaining an adequate supply for residential customers and ensuring that electric rates do not continue their upward trend.

The Susquehanna plant generates 2,228 MW of energy, which is fed into the PJM grid. There has been discussion of requiring new data centers to provide their own power supplies from new generating capacity in order to ensure adequate supply for homes and businesses and minimizing price increases as demand increases while supply tightens.

Talen announced earlier this year that it had sold its Cumulus data center campus adjacent to the Susquehanna nuclear plant to Amazon, Initial plant were for the center to receive its power directly from the plant in what is known as a “behind the meter” arrangement, where the power does not come from the electric grid. However, that arrangement was rejected by the Federal Energy Regulatory Commission over legal and grid reliability concerns.

The new power purchase deal is a “front of the meter” arrangement, where the power flows to the PJM grid and Amazon agrees to purchase it from the electric distribution company at a set price.

Data center development in Pennsylvania has been picking up momentum as companies search for sites with available power sources. Pennsylvania has an abundant energy supply and is a net exporter of energy to the PJM grid, meaning the state produces more electricity than it uses.

TECfusions, a global data center operator, recently announced a new data center project in Upper Burrell, Westmoreland County, proposed to have 3 gigawatts (GW) of electric capacity through on-site natural gas generation. A typical nuclear power plant generates 1 GW of electricity, so the scale of this project is massive. TECfusion said in a release that excess power may be directed to the regional electric grid.

 Microsoft also recently signed a 20-year agreement to buy power from a Three Mile Island nuclear reactor near Harrisburg that will be restarted. The electricity will be used to power Microsoft’s data centers.

As cloud computing and AI demands increase, so will data center development, and state and federal regulators, as well as regional transmission organizations and utilities need to quickly put in place policies to guide how the electric supply will be safeguarded to ensure reliability and fair prices.