Far from the nation's established data hubs and tethered to a power source that has long raised public concerns, the data center at the Susquehanna nuclear plant in rural northeastern Pennsylvania attracted few takers in recent years.
Then, Amazon arrived.
In March, the tech giant agreed to purchase the facility for $650 million and laid out plans to expand operations at the site, contracting to draw up to 960 megawatts from the neighboring nuclear station in the coming years, nearly 40% of its output.
The deal illustrates data centers' new-found interest in nuclear power. The industry has become increasingly aggressive in trying to secure large, reliable sources of energy at a time when its torrid growth has outstripped the ability of the electric grid to keep up.
Totaling nearly 100 gigawatts, the nation's fleet of nuclear plants offers an enormous reservoir of power — and an opportunity that data centers have increasingly sought to seize on. One gigawatt is enough power to light up about 340,000 residential homes, according to the US Energy Information Administration.
Nuclear has another important attribute for the image-conscious data center business: negligible carbon emissions that allow operators to credibly claim their fast-expanding operations won't come at the cost of worsening the climate crisis.
Wes Swenson, the chief executive of the Utah-based data center operator Novva, said that for years, data center operators had largely steered away from nuclear power "because public opinion had always been fairly negative."
The Amazon "deal really shocked me," he said, explaining that he believed it represented the growing reappraisal of nuclear power by the industry.
"I don't see this stopping," Swenson said.
There are signs it isn't.
Joe Dominguez, the CEO of Constellation, the nation's largest operator of nuclear plants, said in a March earnings call that powering data centers with nuclear energy was "kind of a perfect marriage."
"There's a huge team at Constellation that is involved in these discussions," he said.
Vistra, another nuclear owner, also indicated it was arranging data center deals for a nuclear plant it owns in Ohio and one in Texas.
"We're seeing customers approach us at a rate that we haven't seen in my history with this industry," Jim Burke, the company's CEO, said in a March earnings call.
On an April 30 earnings call, Ralph La Rossa, CEO of the New Jersey utility Public Service Enterprise Group, said that it too was considering nuclear power sales to data centers.
"Our New Jersey nuclear units could provide access to a highly reliable, carbon- free source of baseload power," La Rossa said, noting that nuclear facilities were increasingly being viewed as "mission critical for the large data center developers and hyperscalers."
PSEG operates two nuclear plants in New Jersey that currently provide nearly half of the state's electricity.
The enthusiasm is shared by a growing number of data center operators.
In January, Microsoft announced that two veteran energy industry executives had been hired to fill the newly created roles of director of nuclear acceleration and director of nuclear technology at the company – signaling its intent to pursue the power source. Last summer, Microsoft, which is one of the largest data center operators, signed a deal with Constellation to buy nuclear power for one of its Virginia facilities when wind and solar aren't available.
Data centers go "behind-the-fence"
Large power customers typically light up their operations by plugging into the energy grid.
The profligate energy consumption of data centers, however, has made their task of sourcing electricity more complicated.
Driven by the widespread adoption of cloud computing and now demand for immense storage and computer processing needed to develop and commercialize artificial intelligence, data center power use is expected to double in the next two years, according to an International Energy Agency report.
JLL estimates that the power footprint for data centers in the US could grow to 79 gigawatts by the end of 2030 from about 22 gigawatts today – if the electricity is available.
As operators rush to capitalize on the boom, they have increasingly found that the electric grid can't keep up. In 2022, for instance, Dominion Energy, a utility based in Virginia, told developers in the state, which is the largest data center market in the world, that it would be delayed in powering up new projects, sending alarms through the industry.
While utilities unveil expansion plans that may take years to realize, data centers are seeking to avoid the wait by going straight to the source.
Amazon's operations at Susquehanna will siphon power directly from the nuclear plant, which is owned by Talen Energy, steering around the utility system altogether. Such arrangements are known as "co-location" and operate "behind-the-meter," bypassing utility power meters that measure and toll the electricity that flows off the grid.
Amazon said in a statement that the agreement with Talen Energy was one project toward its goal to be net-zero carbon by 2040. "As part of that goal, we're on a path to power our operations with 100% renewable energy by 2025," the company said, adding that it has been the world's largest corporate purchaser of renewable energy for the last four years.
Burke, Vistra's CEO, said that the customers it was speaking with were "interested in also being behind-the-meter."
Dominguez, Constellation's CEO, noted its talks were focused on "behind-the-fence line opportunities with data centers."
PJM, a regional transmission manager that oversees a large portion of the nation's electric grid spanning from Chicago to New Jersey, said in April that it has 5,000 megawatts of such behind-the-meter agreements waiting to be approved. That's almost as much power as New York City requires on an average day.
PJM did not specify which types of customers or power sources were involved in the approval requests, but suggested they included data centers, cryptocurrency mines, and hydrogen power producers.
Energy experts said the bulk of it is likely between data centers and nuclear power plants and that the scale of the pipeline of transactions was unprecedented.
"New customers signing up with existing power plants like this – no one has ever done anything like this," said Michael Jacobs, a senior energy analyst at the Union of Concerned Scientists.
"The data centers are looking for sites that are gigawatt-scale. It just so happens that some nuclear sites can provide that."
Nuclear power plants have another characteristic that is helpful in securing data center deals. They're generally surrounded by generous safety buffers of land, providing the necessary adjacent space to accommodate sprawling, warehouse-like data center facilities. Nuclear plants also generally produce significantly more power per facility than natural gas-fired electric stations, making them more capable of accommodating the data center industry's accelerating power needs.
"The data centers are looking for sites that are gigawatt-scale," said Brian Janous, a former Microsoft energy executive who launched an energy development company earlier this year. "It just so happens that some nuclear sites can provide that."
Concerns that costs could shift to consumers
The growing ties between the data center and nuclear industries have raised concerns.
If more data centers contract power directly from merchant nuclear plants that normally sell their electricity off to the grid, it could punch an atomic-sized hole in the energy supply.
Such a scenario could leave ratepayers to pick up a hefty tab for new power plants and transmission infrastructure to make up for the shortfall – adding to the utility charges that data centers may already be heaping on consumers and businesses around the country.
Greg Poulos, the executive director of a PJM watchdog group, said that "one of my highest priority, highest radar items" is how data centers could push costs onto consumers and also whether nuclear data centers deals could reduce grid reliability.
Nuclear is "one of our most reliable resources," Poulos said. "We're going down one step down in the reliability."
Plant operators, however, argue that data centers are a white knight for a flagging industry.
Faced with steep competition from cheap natural gas, many domestic nuclear plants have struggled financially in recent years.
In 2022, Talen Energy declared bankruptcy, emerging last year after shedding $2.7 billion in debt.
At least one commercial nuclear plant has shuttered every year since 2013, a decline that has alarmed policymakers who see the power source as key to decarbonization. As part of a $1 trillion infrastructure plan passed in 2022, the Biden administration committed $6 billion to save American nuclear power plants at risk of closing.
Beyond the nuclear option
Not all data centers, of course, are seeking out nuclear power to seize their energy independence.
Swenson said his firm Novva is building two new data centers just outside of Salt Lake City for a "Fortune 50 tech company," which he declined to identify. One of the two will be powered by an array of onsite natural gas generators capable of producing up to 200-megawatts of electricity.
"I will eventually get more grid power, but it could be a few years," Swenson said. "So to bridge that to get the client up and running, I'm going to bring in natural gas power."
Swenson said that nuclear power isn't proximate to the site and that buying enough battery storage units and renewable energy to power the facility without carbon emissions would have cost hundreds of millions of dollars.
The natural gas generators, he said, are efficient – waste heat will be used to generate cooling for the facility. Because they're onsite, almost no power is lost in transmission.
"It is still a fossil fuel, but a lot of measurements can be taken to clean it," Swenson said. "For communities that never had a reactor, the next path of least resistance is gas."
