- Federal body vetoes AWS’s nuclear power demands.
- Data centres will draw too much juice.
- Big tech invests in nuclear electricity generation.
The Federal Energy Regulatory Commission (FERC) has vetoed a deal between Amazon and the Susquehanna nuclear power plant in Pennsylvania, citing issues around the stability of the power distribution network, and the future ability of infrastructure to continue function equably.
Amazon acquired a data centre complex near the nuclear power plant earlier this year, paying $650 million for the facility, with plans to add at least 12 more DCs over the next decade. The facility was earmarked to host AWS services, part of the company’s expansion that’s driven by demand for workload-intensive AI services.
Co-location defined
The phrase ‘co-location’ in terms of data centres usually refers to the renting of a third-party’s data centre resources to provide apps and services. On the larger scale of entire DC facilities, however, co-location means the placing of data centres close to power sources. Amazon’s application to the regional electricity grid provider, PJM Interconnection, was for a total co-located load increase from 300 MW to 480 MW, extra capacity to run the existing complex near Susquehanna and, in time, the planned extra facilities AWS would build.
However, objections were raised by utility companies American Electric Power and Exelon, who claimed that the Susquehanna power plant might offer Amazon preferential treatment in power allocation, which would have negative impact on availability for other grid users. Additionally, there would be threats to the overall reliability and stability of the grid. The FERC found that the requested rise in power draw to from around 300 MW to 480 MW would not be likely to affect overall grid stability, but higher current draw above that level would be likely problematic.
The FERC ruling emphasised the need for oversight of AWS’s operations in order not to affect other grid users. AEP and Exelon had complained about lack of monitoring of Amazon’s power use during any increase in supply, but the two companies failed to provide evidence backing their concerns to the satisfaction of the FERC.
The ruling should, therefore, be seen as a pre-emptive measure by the FERC. Demand for data centre services seems unlikely to flatten out at any time in the future, and by vetoing the application for greater power capacity in this single case, the FERC has made its position clear: overall grid stability comes before the demands of data centres, regardless of their ownership.
FERC Commissioner Mark Christie said that approving the amendment to the agreement between Amazon and Susquehanna would have set a precedent, allowing future deals that might stress the distribution grid.
Nuclear power investments
Large technology companies that operate data centres, particularly those serving AI workloads, are currently investing in power generation to meet demand – a demand they work hard to create. Both Google and Microsoft have recently signed agreements with nuclear power operators. Amazon continues to seek additional power sources, investing most recently in the construction of four small modular (nuclear) reactors (SMRs), to be built by Energy Northwest.
In a statement dated October 16, 2024, Matt Garman, CEO of AWS, said, “Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, […] It’s an important area of investment for Amazon. Our agreements will encourage the construction of new nuclear technologies that will generate energy for decades to come.”
Energy production (and distribution grid stability) aside, the UN Trade and Development’s Digital Economy Report 2024 notes that by 2026 the amount of power consumed by the world’s data centres will double from 2022’s levels to 920 terawatt hours. The current boom of interest in artificial intelligence is increasing power demanded by the technology industry, with big tech rolling back its carbon emission targets in favour of profits.
