Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Technology

What Does Amazon Want With Nuclear?

The tech giant’s $650 million deal with Talen Energy has a lot to unpack.

A nuclear tower.
Heatmap Illustration/Getty Images

When Talen Energy, which owns a 90% interest in the Susquehanna nuclear power plant in Northeastern Pennsylvania, announced it was selling a data center site adjacent to its power plant to Amazon Web Services, it raised some eyebrows in the energy world. The surprise was not because a large tech company made a big deal with a carbon-free power provider, or even that a tech company made a deal to buy power generated by a nuclear power plant. It was because Amazon was making this deal.

Amazon is a massive buyer of renewable power — it claims to be the world’s largest and says it’s responsible for 28 gigawatts of clean energy capacity — signing contracts with new wind and solar projects all over the world.

But a divide has opened up among tech giants when it comes to energy, with Amazon on one side and Alphabet and Microsoft on the other. The difference hinges on how much it matters where and when the new carbon-free power a company buys in order to match its electricity use.

What’s odd about the Talen deal is that it fits awkwardly into either approach, especially Amazon’s. Amazon does not count nuclear towards its renewable power goals, and in any case, it’s not a “new” source of carbon-free power. Instead, it allows Amazon to siphon somewhere between 480 and 960 megawatts of capacity from the 2,500 megawatt plant.

“Amazon needs power, they’re getting it at cheap rates. They don’t even want to talk about it like a climate thing,” Mark Nelson, the founder of Radiant Energy Group, told me.

In the past decade or so, technology companies have gone on a clean-power buying spree, funding new wind and solar projects all over the world. But there has been a divergence in what is thought to be the best way to go about it.

In 2019, Amazon announced a goal to add enough renewable power to the grid to match its own emissions by 2030 (since moved up to 2025) and to reach net zero by 2040.

Google has been 100% renewable in terms of buying clean power in the same amounts that it consumes since 2017. So in 2020, it set a new goal: to “run on 24/7 carbon-free energy on every grid where we operate by 2030.” This would mean not just matching total renewable purchases with total emissions, as Amazon is seeking to do, but also trying to get every hour of data center operation “matched” with an hour of renewable generation on the same grid.

Microsoft has a similar goal, and as a result, both companies have shown much more interest in nuclear power of late than is typical in the technology world.

“A huge bottleneck for growth for Amazon, Google, Microsoft, Facebook is access to constant electricity,” Nelson told me. Nuclear is a carbon-free electricity resource that can run at a steady output 24 hours a day, whereas wind and solar are both inherently variable.

Microsoft signed a deal with Constellation to supply power to data centers in Virginia and hired an official from the Tennessee Valley Authority to be its director of nuclear and energy innovations, while Microsoft founder Bill Gates and Sam Altman, the head of Microsoft-backed OpenAI have both invested in nuclear startups, as has Google.

Amazon’s approach — which it shares with several other large companies, including Meta — is not to match 24 hours of its operations with clean power bought locally, but rather to develop and purchase new wind and solar at the same scale of the power it consumes, especially in areas with dirty grids, thus matching the emissions from its consumption with the emissions reductions of new renewables projects. While a 24/7 matching approach may be naturally complementary with nuclear power, Amazon’s strategy doesn’t require it.

“We believe a focus on emissions is the fastest, most cost-effective and scalable way to leverage corporate clean energy procurement to help decarbonize global power grids at the fastest pace,” an Amazon spokesperson told me. “This includes procuring renewable energy in locations and countries that still rely heavily on fossil fuels to power their grids, and where energy projects can have the biggest impact on carbon reduction.”

Contracting out new renewable energy projects can have more bang for your buck in dirty grids, according to proponents of the Amazon philosophy, known as carbon matching. The hypothesis is that a renewable project in a fossil fuel-heavy grid will displace more dirty power than one that’s located near a datacenter in an already relatively clean grid like California or Washington State.

Princeton researchers who examined the carbon matching (Amazon) and temporal matching (Google and Microsoft) strategies argued that the carbon matching approach does not necessarily lead to more renewables — or less fossil fuels — on the grid than would have occurred in the absence of the tech companies, and thus does not actually greatly lower emissions. The temporal approach, on the other hand, can meaningfully displace fossil fuel power that would otherwise have to be on the grid to meet demand.

Nuclear advocates are clear-eyed that this deal won’t cause a new generating unit to sprout up out of the Susquehanna Valley. But they still see it as the kind of deal that can help ensure nuclear plants’ continued survival. Amazon’s $650 million buys it a 10-year agreement to purchase power from the plant, as well as “additional revenue from AWS related to sales of carbon-free energy to the grid,” which an Amazon spokesperson explained as a reference to the deal “ensur[ing] that the nuclear plant has stable revenues to continue generating clean power to the grid for the foreseeable future.”

Nelson, a passionate advocate for nuclear power, lamented the mass shutdown of nuclear power plants in the 2010s thanks to cheap natural gas knocking them out of power markets that didn’t value reliability or carbon-free energy. But now, he says, things are different.

“Now nuclear is getting valued for its climate properties, reliability, and low cost. We’re seeing nuclear plants cash in,” Nelson told me. “Long term PPAs with cold hard cash help me sleep better at night.”

Blue

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

Trump Administration Restarts Key Permitting Process for Wind Farms

The Fish and Wildlife Service has lifted its ban on issuing permits for incidental harm to protected eagles while also pursuing enforcement actions — including against operators that reported bird deaths voluntarily.

A golden eagle and wind turbines.
Heatmap Illustration/Getty Images

When Trump first entered office, he banned wind projects from receiving permits that would allow operators to unintentionally hurt or kill a certain number of federally protected eagles, transforming one of his favorite attacks on the industry into a dangerous weapon against clean energy.

One year later, his administration is publicly distancing itself from the ban while quietly issuing some permits to wind companies and removing references to the policy from government websites. At the same time, however, the federal government is going after wind farm operators for eagle deaths, going so far as to use the permitting backlog it manufactured to intimidate companies trying in good faith to follow the law, with companies murmuring about the risk of potential criminal charges.

Keep reading...Show less
Yellow
Climate Tech

Funding Friday: A Big Week for Batteries

Plus a pair of venture capital firms close their second funds.

Cyclic Materials.
Heatmap Illustration/Cyclic Materials, Getty Images

It’s been a big few weeks for both minerals recycling and venture capital fundraising. As I wrote about earlier this week, battery recycling powerhouse Redwood Materials just closed a $475 million Series E round, fueled by its pivot to repurposing used electric vehicle batteries for data center energy storage. But it’s not the only recycling startup making headlines, as Cyclic Materials also announced a Series C and unveiled plans for a new facility. And despite a challenging fundraising environment, two venture firms announced fresh capital this week — some welcome news, hopefully, to help you weather the winter storms.

Cyclic Materials Announces $75 Million in Series C Funding

Toronto-based rare earth elements recycling company Cyclic Materials announced a $75 million Series C funding round last Friday, which it will use to accelerate the commercialization of its rare earth recycling tech in North America and support expansion into Europe and Asia. The round was led by investment management firm T. Rowe Price, with participation from Microsoft, Amazon, and Energy Impact Partners, among others.

Keep reading...Show less
Green
AM Briefing

The Brittle Grid

On copper prices, coal burning, and Bonaire’s climate victory

Power lines.
Heatmap Illustration/Getty Images

Current conditions: The bomb cyclone barrelling toward the East Coast is set to dump up to 6 inches of snow on North Carolina in one of the state’s heaviest snowfalls in decades • The Arctic cold and heavy snow that came last weekend has already left more than 50 people dead across the United States • Heavy rain in the Central African Republic is worsening flooding and escalating tensions on the country’s border with war-ravaged Sudan.

THE TOP FIVE

1. Much of the U.S. is at high risk of blackouts by the end of the decade

A chart from the NERC report showing the grids most at risk between now and 2030. NERC

Keep reading...Show less
Blue