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

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.”
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But there’s still plenty of room for regional grid operators to set their own rules.
Almost eight months have passed since the Federal Energy Regulatory Commission was tasked by the Trump administration with conjuring up with new rules to help speed up interconnection of large loads without increasing retail electricity costs. On Thursday, FERC finally responded with “major reforms,” in the words of Chair Laura Swett, putting the onus on America’s restructured electricity markets — PJM Interconnection, Midcontinent Independent System Operator, Southwest Power Pool, California Independent System Operator, ISO New England, and New York Independent System Operator — to figure out how to implement their suggested solutions.
Using what’s known as “show cause” orders, FERC presented those in charge of these electricity markets, known as regional transmission organizations and independent system operators, with what was essentially a menu of ideas that have been percolating in electricity policy circles since the rise of data-center-driven load growth has started putting pressure on the existing grid and told them to get to work. Secretary of Energy Chris Wright’s original “advance notice of proposed rulemaking,” published in late October, was more proscriptive and specific, whereas FERC essentially said to regional electricity markets, “do whatever you have to, just make it work.”
In a brief email, former FERC chair Neil Chatterjee described this as “a very FERC-y approach!” Or as Gretchen Kershaw, the chief operating officer of Grid Strategies and a former FERC legal advisor, explained to me that “it’s much faster to act on a region-specific basis instead of going through a full notice and comment rulemaking process.”
The commission’s proposed reforms fall into five categories:
1. The markets need “clear transmission service application and study rules” for large load customers seeking to connect to the grid, Swett said in her remarks. The commissioners specifically called out the use of “grid-enhancing technologies” to expand the capacity of America’s existing electricity infrastructure — things like reconductoring, which adds transmission capacity along existing wires, and dynamic line rating, which adjusts capacity based on local weather and conditions. “The cheapest transmission line is the one that already exists,” Commissioner David Rosner said, speaking after Swett at Thursday’s meeting.
2. The RTOs and ISOs will also have to show that they have “adequate safeguards against cost-shifting or take steps to create them,” Swett said. This will require “cost recovery agreements,” Rosner added, “which are designed to ensure that large loads pay their fair share of the costs incurred to serve them, regardless of whether the large load comes online as planned.” In other words, “If new infrastructure is built to accommodate a data center, and that data center doesn’t show up, residential customers are not left on the hook to pay the costs,” he said.
3. The third area that the electricity markets will have to address is co-location and behind-the-meter power, specifically coming up with rules that facilitate purpose-built generation facilities to support new large loads. This would allow data centers and big power users to be less of a burden on the grid, thus requiring less in the way of grid upgrades and additional costs that would be borne by all ratepayers.
4. The orders tells markets “to prove or develop new transmission services to reflect large load flexibility,” Swett said. Load flexibility is another idea designed to lower the system cost of data centers. Grids have to be built out to accommodate the peak demand of the system, but with flexibility, data centers could shave off how much power they demand during, say, a hot summer day, thus lowering that demand peak. To get there, however, they need to be properly incentivized. FERC is telling the RTOs and ISOs to come up with rules that would allow large loads to come online without necessarily requiring vast new buildouts of grid infrastructure and generation. “Legalizing flexible transmission service options for more large load customers can speed interconnection, avoid constructing unnecessary transmission upgrades, reduce strain on the grid, and make power bills cheaper for everyone,” Rosner said.
5. Finally, the orders will require the markets to come up with rules and procedures for generation that’s “proximate” to new load. This will encourage “bring your own new generation,” Rosner said. That stands in contrast to proposals requiring or encouraging new large sources of demand to place generation on their own premises. “Literal co-location is not the only way to facilitate faster, more efficient, and more cost-effective connections to the grid,” Rosner said.
The markets will have to come back in a month to explain how they “intend to ensure that adequate generation will be available to serve existing and new large loads,” a FERC staffer explained at Thursday’s meeting, then again a month later to explain either how their existing rules conform to the new requirements or how they plan to charge their rules to do so.
The commission’s decision is not a formal rulemaking. Instead, the commissioners argued that tasking each RTO and ISO with specific orders would result in a more tailored set of reforms. “Today we’re engaging those to act with more speed, more durability, and more precision than we would get with our proposed rulemaking,” Commissioner David LaCerte said.
The action was strikingly bipartisan, with Democratic and Republican commissioners approving it in a 5-0 vote. It also won plaudits from clean energy and environmental groups. The Sierra Club said in a statement the action was “responsive to Sierra Club’s requests on several fronts,” while the clean energy trade group Advanced Energy United lauded the orders as “potentially creating much-welcome regulatory certainty and transparency, as well as some safeguards to ensure that co-location won’t negatively impact the electric rates and system reliability of all other customers.”
Federal energy regulators have been mulling these reforms as the Trump administration and state and local government officials have grown increasingly restless with rising electricity prices, utilities, and data center developers. Swett herself has scolded America’s largest electricity market, PJM Interconnection, for its inability to meet its own preferred level of excess capacity to ensure it can maintain continuous service, as well as continual high capacity costs, which have translated into tens of billions of dollars of added costs for electricity customers in the mid-Atlantic. Swett has even gone so far to suggest that PJM “ simply has grown too big to function,” leading some market observers to speculate that a forced breakup may be nigh.
Electricity prices nationwide have risen 5.3% in the last year, according to the Bureau of Labor Statistics, while overall prices were up 4.2% — a number that includes gasoline price increases stemming from the war in Iran. In PJM territories like New Jersey, average bills have increased from about $91 to $140 over the past five years, while prices are up some 52%, according to the Heatmap-MIT Electricity Price Hub.
The existing rules, Swett said, are “unjust and unreasonable because they do not adequately address how to integrate large and co-located loads onto the transmission system.”
“Free-riding on other customers is not an option,” she added.
Senior executives at EDP, Apex, Pattern, and other large renewables companies did something remarkable in a recent court filing: They publicly criticized the administration.
Major energy developers are going all in against the Trump administration in court, in what appears to be the first time many are publicly challenging the president in spite of any potential risk of retaliation.
As I chronicled, Trump is now effectively blocking any new wind projects in the U.S., utilizing federal authority over American aerospace to stop what was once a run-of-the-mill approval process for the height of turbines through the Federal Aviation Administration. They’ve done this by using the Defense Department to gum up the interagency review process, with the Pentagon holding up bureaucratic machinations citing vague, alleged national security concerns. Earlier this month, regional renewable energy trade groups filed a lawsuit against the Pentagon and FAA seeking a judicial order akin to what they’ve already won against the Interior Department’s anti-renewables permitting freeze. The case argues Trump can’t hold these routine processes up because, well, they’re mandated by law to ultimately clear things if they meet basic specifications. It arrives as the Trump administration appeals a separate lawsuit against the Interior Department’s de facto permitting freeze, which was formally filed today.
Last week, the renewables trades filed a motion to immediately end this de facto national freeze. Attached to this motion: a murderer’s row of on-the-record statements from senior executives for large U.S. energy developers seeking to build their wind projects. I’ve honestly never seen anything like it – declarations railing against the Pentagon from top personnel for Pattern Energy, Apex Clean Energy, EDP Renewables, Triple Oak Power, Bordas Renewable Energy, Nova Clean Energy and Palmer Capital.
The declarations describe each company’s individual experiences struggling to get these routine height clearances. Adam Clark of Pattern Energy said the Pentagon’s inaction has “jeopardized committed capital, threatened project viability” and “delayed or blocked local and state permitting.” Thomas LoTuro at EDP Renewables said the military’s behavior “effectively halted” a “substantial portion of [EDP] North America’s project portfolio,” stalling some proposals for so long that it risks violating existing local road agreements for construction.
Some of these executives – such as those for Invenergy, Bordas, and Triple Oak – only describe themselves as representatives of the subsidiaries or LLCs developing individual wind projects affected by the freeze. Those filings do not make any reference by name to their parent companies. But quick background checks revealed each of these individuals holds broader development or management roles at the parent companies and I understand from conversations with individuals involved in this litigation that their statements were a significant step not taken likely.
“You are very observant,” one senior renewable energy industry insider told me when I asked about the executives’ statements.
This insider – who has firsthand knowledge about the litigation – told me the companies going on the record are largely doing so because of the extent they’re at risk. Often the height clearance for turbines is one of the final procedural steps before starting construction, and the incoming sunset of tax credits under the Inflation Reduction Act has made construction start dates key to projects’ budgets. Wind development has been drastically undermined by Trump’s permitting freezes. American Clean Power has said turbine orders halved in the first half of 2025, reaching their lowest levels since the COVID-19 pandemic lockdowns.
There’s also the sheer magnitude of the freeze. Before the Pentagon ruined the lives of wind developers, the Trump renewable permitting freeze was an obstacle companies could design around by avoiding wetlands, species habitat, and federal lands. It should’ve been a relief, for example, that the Trump administration dropped its legal defense of the president’s Day 1 executive order going after wind permitting. But the military’s hold on approvals had nothing to do with that and its scope reaches further than just the federal government, as height clearances are often needed for state, county, and municipal permits too.
Ultimately the Pentagon wind freeze represents an existential threat to renewable energy developers’ businesses and reputations in the investment community. Sean Stocker, head of development for Apex Clean Energy, stated in a declaration submitted in the Pentagon wind litigation that more than $133 million in project costs incurred were at risk of being lost, including over projects that had already been determined “do not pose an unacceptable risk to national security.” This has resulted in “impacts and losses” that are “not fully recoverable” even if the companies win in the litigation because of the damage to wind energy’s reputation.
“If Apex is forced to cancel projects as a result of DoD inaction, the resulting economic, reputational, and business losses could irreparably harm the company,” Stocker stated.
Since the start of Trump 2.0, wind energy developers have been skittish to publicly challenge the president in any way for fear of retribution. Trump could hypothetically make wind energy life hell in fresh new ways. Like for example, targeting energy companies critical of the administration in an ongoing crackdown on bird deaths at operational wind farms. A reasonable fear! “Companies are still risk averse and they’re afraid. The knock-on business impacts could hypothetically be worse than the loss on the wind project itself,” said the industry insider, who requested anonymity because they did not have permission to speak on the record about the litigation.
Based on the statements submitted in court, it appears energy companies are now emboldened after winning myriad legal battles against the administration via trade group campaigns and lawsuits filed by supportive Democratic attorneys general. Time will tell whether putting all their chips onto the table will work out in the end.
A representative for the groups involved in the litigation did not respond to a request for comment.
And more of the week’s top fights around development.
1. Apache County, Arizona – Renewables developers are trying to head off restrictions in a coveted region of the sun-swept Arizona desert.
2. Montgomery County, Alabama – A so-called “AI watchman” has won the GOP nomination for Alabama Public Service Commission, indicating how deeply frustrations run in red states against the nascent infrastructure buildout for artificial intelligence.
3. Goodhue County, Minnesota – The mayor of a small city at the center of a significant data center conflict abruptly resigned, indicating further municipal dominoes will fall because of the AI data center backlash.
4. Reno County, Kansas – We close this week’s Hotspots with a county rejecting a data center moratorium.