{An electrical} substation close to the LC1 CloudHQ knowledge heart in Ashburn, Virginia, on March 27, 2024.
Nathan Howard | Bloomberg | Getty Photos
Tech corporations’ push to instantly energy synthetic intelligence with nuclear energy vegetation hit a significant roadblock after a federal regulator rejected Amazon’s request to extend knowledge heart capability.
The Federal Vitality Regulatory Fee on Friday rejected a request to extend the quantity of energy the Susquehanna Nuclear Energy Plant in Pennsylvania can ship to an Amazon knowledge heart campus.
Unbiased energy producer Talk about energy in March bought the information heart campus to Amazon for $650 million, which shall be powered by the nuclear plant in a first-of-its-kind deal.
Shares of Talen closed down greater than 2% on Monday because of the FERC waiver order. Constellation energy and Vistra Corp. tumbled greater than 12% and about 3%, respectively, in sympathy as traders. Traders count on the businesses to announce such offers sooner or later. Constellation had its worst day for the reason that firm spun off from Exelon in February 2022
Grid operator PJM Interconnection and the Susquehanna plant, which Talen owns, had filed a request to extend the quantity of energy despatched to Amazon’s knowledge heart from the present 300 megawatts to 480 megawatts.
The association, referred to as co-location by the vitality business, “may have monumental implications for each grid reliability and shopper prices,” FERC Commissioner Mark Christie mentioned in his opinion supporting the order.
Talen mentioned FERC’s choice could have a “chilling impact on financial growth in states like Pennsylvania, Ohio and New Jersey” in a press release Monday. The vitality firm mentioned it’s evaluating its choices with a “industrial options focus”.
Amazon’s knowledge heart campus can nonetheless use 300 megawatts of energy from the Susquehanna nuclear plant, in line with Talen. The corporate mentioned the deal was “honest and cheap and in the very best curiosity of shoppers”.
FERC’s choice doesn’t instantly have an effect on Constellation’s plans to restart the Three Mile Island nuclear plant in 2028. by means of an influence buy settlement with Microsoft. Three Mile Island will ship energy to the facility grid as an alternative of instantly powering Microsoft’s knowledge facilities.
However Constellation and Vistra have expressed curiosity in offers with tech corporations which can be much like the deal between Talen and Amazon.
Information facilities that energy AI and cloud computing eat rising quantities of electrical energy. Utilities are scrambling to search out methods to energy the rising electrical load. Know-how corporations are more and more turning to nuclear energy as a result of it’s dependable, fossil-free and carbon-free.
Vistra and Constellation are two of the best-performing shares within the S&P 500 this yr as traders guess on a possible windfall from the expertise sector’s rising vitality wants.
Vistra shares have greater than tripled this yr, outpacing even Nvidia to turn out to be the very best performing inventory out there. Constellation has greater than doubled and is the fourth-best performing inventory within the S&P 500 this yr.
