Big Tech Wants Big Power Plants

AS they look for possible quick fix for their fast-growing electricity diets, tech giants are considering to strike deals with power plant owners to plug in directly, avoiding a potentially longer and more expensive process of hooking into a fraying electric grid that serves everyone else.

It's raising questions over whether diverting power to higher-paying customers will leave enough for others and whether it's fair to excuse big power users from paying for the grid. Federal regulators are trying to figure out what to do about it, and quickly.

Front and center is the data center that Amazon’s cloud computing subsidiary, Amazon Web Services, is building next to the Susquehanna nuclear plant in eastern Pennsylvania.

The arrangement between the plant's owners and AWS — called a "behind the meter" connection — is the first such to come before the Federal Energy Regulatory Commission (FERC). For now, FERC has rejected a deal that could eventually send 960 megawatts — about 40 percent of the plant's capacity — to the data center. That's enough to power more than a half-million homes.

That leaves the deal and others that likely would follow in limbo. It's not clear when FERC, which blocked the deal on a procedural ground, will take up the matter again or how the change in presidential administrations might affect things.

"The companies, they’re very frustrated because they have a business opportunity now that’s really big," said Bill Green, the director of the MIT Energy Initiative. "And if they’re delayed five years in the queue, for example — I don’t know if it would be five years, but years anyway — they might completely miss the business opportunity."

What's driving demand for energy-hungry data centers?

The rapid growth of cloud computing and artificial intelligence has fueled demand for data centers that need power to run servers, storage systems, networking equipment and cooling systems.

That's spurred proposals to bring nuclear power plants out of retirement, develop small modular nuclear reactors and build utility-scale renewable installations or new natural gas plants. In December, California-based Oklo announced an agreement to provide 12 gigawatts to data center developer Switch from small nuclear reactors powered by nuclear waste.

Federal officials say fast development of data centers is vital to the economy and national security, including to keep pace with China in the artificial intelligence race.

For AWS, the deal with Susquehanna satisfies its need for reliable power that meets its internal requirements for sources that don't emit planet-warming greenhouse gases, like coal, oil or gas-fueled plants.