The U.S. Federal Energy Regulatory Commission (FERC) recently rejected a collaborative proposal from Amazon and Talen Energy, denying Pennsylvania nuclear plants the ability to directly supply electricity to Amazon's AI data centers, hindering Amazon's plan to obtain stable power directly from the nuclear plant through a behind-the-meter model. This also highlights the mismatch between the continuously increasing power demand from the tech industry and the pace of development of existing power infrastructure, similar to the situation currently faced by Bitcoin miners.
FERC's ruling has undermined the stock prices of nuclear companies, and nuclear site sharing still needs to be evaluated.
FERC's decision caused stock prices of several large nuclear companies to drop. The industry had hoped to address the massive power demand of data centers through 'nuclear site co-location', but FERC believes that direct power supply cooperation like this may affect the stability of power supply for other users, so more time is needed for assessment.
The industry believes the ruling is temporarily obstructed, and they are looking forward to a clearer plan from FERC.
Although this ruling has temporarily stalled Amazon's 'behind-the-meter' plan, nuclear operators have not given up. They believe this is just a temporary setback, and FERC should provide clearer guidelines regarding 'nuclear site co-location' in the future. As the electricity demand from AI data centers grows, tech companies' urgency for power is quite pressing, and they are even willing to invest their own money to help bear the construction costs to accelerate the progress of power infrastructure projects.
(Note: Behind-the-meter storage refers to energy storage devices installed behind the user's electricity meter, typically set up at businesses, factories, or residences, used to manage and optimize their own electricity demand. Unlike traditional 'front-of-the-meter' storage, behind-the-meter storage is not directly connected to the public power grid and is only for internal use.)
Both Bitcoin mining and the AI industry are high electricity consumers, facing a common bottleneck in power supply.
This ruling situation is also similar to the problems faced by Bitcoin miners. Whether it is AI data centers or Bitcoin mining, these high electricity consumption industries are now under the same pressure to quickly find a large and stable power supply source.
Bitcoin mining usually chooses areas with lower electricity costs while seeking locations that can directly connect to power supply facilities (such as hydropower or nuclear plants) to avoid issues of 'unstable power supply' and 'peak hour' electricity costs from the grid. FERC's ruling this time restricts nuclear site sharing, indicating that future similar 'behind-the-meter' cooperation projects may face stricter scrutiny.
(The U.S. Treasury Department has released a 2025 tax proposal, aiming to impose a 30% electricity tax on mining companies.)
FERC stated that the U.S. power grid is becoming increasingly unmanageable, and they rejected the proposal out of concern that electricity cost pressures would be transferred to the public.
FERC's ruling actually reflects concerns about the stability of the national power grid, as the rapid growth of electricity demand from AI and data centers will inevitably increase the load on the grid. In its ruling, FERC stated that while AI development is one of the key factors related to national security and economic development, the rapid establishment of large-scale data centers would exacerbate the already aging power grid and increase electricity cost pressure, which would then be passed on to households and small businesses. FERC indicated that this consideration is why it decided to reject the proposal.
The Three Mile Island project demonstrates the potential for nuclear power sharing, and the industry is looking forward to new directions.
It is worth mentioning that Amazon's 'nuclear site co-location plan' is not the only nuclear sharing case. In September this year, a collaboration plan between Microsoft and Constellation was approved by U.S. authorities to restart the Three Mile Island nuclear plant for supplying power to data centers. However, since Three Mile Island is currently closed, the power supply after restarting will not affect existing users, which may be why this plan was not blocked by FERC. This case shows that if new power sources can be added for data centers instead of reallocating existing power, 'nuclear site co-location' still has feasibility.
Amazon needs to find alternative solutions in the short term to cope with the increasing electricity demand from AI.
Currently, Amazon has been authorized to extract 300 megawatts of electricity from the Susquehanna nuclear power plant, and this supply is not affected by the new FERC ruling. However, due to the increasing power demand from data centers driven by AI development, Amazon still needs to look for alternatives and reassess its future nuclear power supply strategy.
(AI assists in nuclear power development, Vistra has surged nearly 2 times this year, outperforming Nvidia.)
This article discusses the U.S. government's rejection of Amazon's nuclear power supply application, which may impact electricity demand for AI and Bitcoin mining. It first appeared in Chain News ABMedia.
