Nuclear Woes for Proposed Data Centers - Amazon and Meta
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Regulators Reject Power Deal For Nuclear Amazon DatacentersMeta had plans to build an AI data center in the US that relies on nuclear power - it even already knew where it wanted the facility to be built. According to the Financial Times, though, the company had to scrap its plans, because the a rare bee species was discovered on the land reserved for the project. Company chief Mark Zuckerberg was reportedly ready to close a deal with an existing nuclear power plant operator that would provide emissions-free energy to the plant. The Times said he told staff members at an all-hands last week that pushing through wouldn't have been possible, because the company would encounter numerous regulatory challenges due to the bees' discovery.
Zuckerberg reportedly told his staff that Meta would've had the first nuclear-powered AI if the deal had gone ahead. It still might come true if the company could find a way, but it has to move quickly because its biggest rivals are investing in nuclear energy, as well. In September, Microsoft revealed that it intends to revive the Three Mile Island nuclear power plant to provide energy for its AI efforts. Meanwhile, Google teamed up with startup Kairos Power to build seven small nuclear reactors in the US to power its data centers starting in 2030. And then there's Amazon, which announced three agreements with different companies to build small modular reactors in mid-October.
The Times didn't say whether Meta is looking for a new site - one that doesn't have rare bees living in its vicinity. One of its sources only said that Meta is still exploring various deals for emissions-free energy, including nuclear, to power its future AI data centers.
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Amazon has hit a roadblock in its plans for nuclear-powered US datacenters. Federal regulators rejected a deal that would let it draw more power from a Susquehanna plant to supply new bit barns next to the site, on the grounds this would set a precedent which may affect grid reliability and increase energy costs.
The Federal Energy Regulatory Commission (FERC) issued an order on November 1 rejecting an amended Interconnection Service Agreement (ISA) that would have increased the amount of co-located load from 300 to 480 MW, and to "make revisions related to the treatment of this co-located load."
Co-located load means the Cumulus datacenter complex that Talen Energy built next to the 2.5 GW Susquehanna nuclear plant in Pennsylvania which it operates, and which Amazon acquired in March via a deal worth $650 million.
The online megamart announced plans in May to expand the site with more than a dozen new datacenters for its Amazon Web Services (AWS) cloud subsidiary over the next decade.
Soon after that, official objections were filed by two utility companies, American Electric Power (AEP) and Exelon. They argued that the revised agreement between Talen and PJM Interconnection, the regional power grid operator, would give the Cumulus site preferential treatment and may result in less energy going to the grid in some circumstances.
Exelon and AEP also argued that the amended ISA should be subject to an official hearing because "it raises many factual questions," and, in the absence of any such hearing, that FERC should reject the amended ISA. It seems a majority of the commissioners agreed.
Specifically, Exelon and AEP said the amended ISA had not been adequately supported, meaning no good reason was given as to why the amendments were necessary.
The FERC ruling notes that PJM says up to 480 MW of power could be delivered to "the co-located load" without a material impact on the grid, and any additional load beyond that would result in "generation deliverability violations" and require installation of system upgrades.
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