New supply agreement expands Talen-Amazon partnership

Thursday, 12 June 2025

The new power purchase agreement will see Talen supply electricity to Amazon for operations that support AI and other cloud technologies at Amazon's data centre campus adjacent to Susquehanna, a two-unit boiling water reactor plant in Salem Township, with the ability to deliver to other sites throughout Pennsylvania. "The power delivery schedule will ramp over time, expected to achieve the full volume no later than 2032, with the potential to meaningfully accelerate," Talen said: it will run until 2042, with options to further extend its duration.

Talen and Amazon will also explore building new small modular reactors (SMRs) "within Talen's Pennsylvania footprint" and "pursue expanding the nuclear plant's energy output through uprates, with the intent to add net-new energy to the PJM grid," Talen said. PJM Interconnection is the regional transmission organisation that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

"Our agreement with Amazon is designed to provide us with a long-term, steady source of revenue and greater balance sheet flexibility through contracted revenues," Talen President and CEO Mac McFarland said. According to the company, the transaction will significantly decrease Talen's market risk and minimise its reliance on federal nuclear production tax credits.

Last year, Talen announced the sale of its 960 MW Cumulus data centre campus to Amazon Web Services (AWS), with a long-term agreement to provide power from Talen's Susquehanna nuclear power plant to which the data centre has a direct connection. But later that year, the US Federal Energy Regulatory Commission rejected a proposed agreement between regional transmission organisation PJM, PPL Electric Utilities and Talen to increase the amount of load it is allowed to transfer directly from the plant to the data centre.

The existing Susquehanna co-located load arrangement between Talen and Amazon will transition to a so-called "front-of-the-meter" arrangement after the completion of transmission reconfigurations expected in Spring 2026, alongside the plant's refuelling outage, Talen said. Under the terms of the new agreement, Susquehanna will provide its power to the PJM grid, Talen will act as the retail electric generation supplier to Amazon, and PPL Electric Utilities will be responsible for transmission and delivery.

"Amazon is proud to help Pennsylvania advance AI innovation through investments in the Commonwealth's economic and energy future," said AWS Vice President of Global Data Centers Kevin Miller. "That's why we're making the largest private sector investment in state history - USD20 billion - to bring 1,250 high-skilled jobs and economic benefits to the state, while also collaborating with Talen Energy to help power our infrastructure with carbon-free energy."

Earlier this year Amazon was among a group of major energy users that signed a pledge supporting the goal of at least tripling global nuclear capacity by 2050.