Talen sells carbon-free data centre to Amazon cloud company

05 March 2024

Talen Energy Corporation has announced the sale of its 960 MW Cumulus data centre campus in northeast Pennsylvania to Amazon Web Services, with a long-term agreement to provide power from Talen's Susquehanna nuclear power plant.

Susquehanna (Image: Talen Energy)

The Cumulus campus is directly connected to the two-unit nuclear power plant. The data centre's four substations have a total potential 960 MW of redundant capacity, including 200 MW that is currently associated with the Nautilus cryptocurrency facility, in which Talen will retain its 75% interest. A further 240 MW of redundant capacity for data centres is expected to be ready this year. The campus features a "robust and redundant" fibre network.

In addition to the USD650 million for the sale of all of Cumulus's tangible and intangible assets - which is to be paid in stages (USD350 million on closing and USD300 million to be released on the attainment of development milestones later this year), Talen will receive additional revenue from Amazon Web Services (AWS) related to sales of Susquehanna's energy to the grid.

AWS plans to develop a 960 MW data centre at the site and has minimum contractual power commitments ramping up in 120 MW increments over several years, starting in 2025. Each step up in capacity commitment is at a fixed price for an initial 10 years, after which it will be based on a fixed margin above prevailing prices. AWS will have a one-time option to cap commitments at 480 MW and has two 10-year extension options, which are tied to the renewals of the two nuclear units' licences in 2042 and 2044.

"We are pleased today to have sold our Cumulus data centre campus, unlocking significant value for Talen," said Talen President and CEO Mac McFarland. "This transaction provides an attractive return on Talen's investment and vision in building Cumulus, and creates value through the sale of clean carbon-free power from our top-decile Susquehanna nuclear plant."

"Power demand is growing for the first time in years, and AI and data centres are at the heart of that growth," McFarland said. "Data from the International Energy Agency suggests that energy demand from data centres, AI and cryptocurrencies could more than double over the next three years." In the US alone, studies suggest that could mean an extra 38 GWe of additional demand by 2028, he said. "Reliable power is scarce - and reliable, carbon-free power even more so."

The transaction will benefit the wider community by creating jobs and catalysing economic development as well as strengthening the Susquehanna plant itself as a major employer and significant tax payer, McFarland said.

Amazon subsidiary AWS describes itself as the world's most comprehensive and broadly adopted cloud, offering some 200 services for a wide range of technologies, industries and use cases.

The Susquehanna plant, in Salem Township, comprises two boiling water reactors and is 90%-owned and operated by Talen subsisidiary Susquehanna Nuclear, LLC. Allegheny Electric owns 10% of the 2475 MWe plant.

Researched and written by World Nuclear News