An influence substation close to the LC1 CloudHQ knowledge heart in Ashburn, Virginia, on March 27, 2024.
Nathan Howard | Bloomberg | Getty Photos
Know-how corporations’ push to instantly energy synthetic intelligence with nuclear crops hit a serious roadblock, after a federal regulator rejected a request to extend energy for an Amazon knowledge heart.
The Federal Power Regulatory Fee on Friday rejected a request to extend the quantity of energy the Susquehanna nuclear plant in Pennsylvania can dispatch to an Amazon knowledge heart campus.
Unbiased energy producer Talen Power in March bought the info heart campus to Amazon for $650 million, which might be powered by the nuclear plant in a first-of-its-kind deal.
Talen’s inventory closed greater than 2% decrease Monday within the wake of FERC’s denial order. Constellation Power and Vistra Corp. tumbled greater than 12% and about 3%, respectively, in sympathy as traders Buyers anticipate the businesses to announce comparable offers sooner or later. Constellation posted its worst day for the reason that firm spun off from Exelon in February 2022.
The grid operator PJM Interconnection and the Susquehanna plant, which Talen owns, had filed a request to extend the quantity of energy dispatched to the Amazon knowledge heart from 300 megawatts presently to 480 megawatts.
The association, known as co-location by the facility business, “might have big ramifications for each grid reliability and shopper prices,” mentioned FERC Commissioner Mark Christie in his opinion backing the order.
Talen mentioned FERC’s resolution can have a “chilling impact on financial improvement in states reminiscent of Pennsylvania, Ohio, and New Jersey” in a press release Monday. The facility firm mentioned it’s evaluating its choices with a “give attention to business options.”
The Amazon knowledge heart campus can nonetheless use 300 megawatts of energy from the Susquehanna nuclear plant, in line with Talen. The corporate mentioned the deal is “is simply and affordable and in the most effective curiosity of customers.”
The FERC resolution doesn’t instantly have an effect on Constellation’s plans to restart the Three Mile Island nuclear plant in 2028 by way of an influence buy settlement with Microsoft. Three Mile Island will dispatch energy to the electrical grid, reasonably than instantly energy Microsoft’s knowledge facilities.
However Constellation and Vistra have expressed curiosity in hanging offers with tech corporations which are just like the settlement between Talen and Amazon.
Knowledge facilities that energy AI and cloud computing are consuming rising quantities of electrical energy. Utilities are scrambling to seek out methods to energy the rising electrical load. Tech corporations are more and more turning to nuclear energy as a result of it’s dependable, fossil free and doesn’t emit carbon dioxide.
Vistra and Constellation are two of the best-performing shares within the S&P 500 this yr, as traders wager on a possible windfall from the tech sector’s rising vitality wants.
Vistra’s inventory has greater than tripled this yr, outpacing even Nvidia to grow to be the best-performing inventory out there. Constellation has greater than doubled and is the fourth-best inventory within the S&P 500 this yr.
