The Federal Energy Regulatory Commission has denied Amazon’s request for an increased power supply from the Susquehanna nuclear plant, which aimed to boost capacity from 300 to 480 megawatts to support its expanding data center operations. Regulators expressed concerns that the approval could jeopardize grid reliability and escalate energy costs. As demand for data center power, driven by AI workloads, is projected to rise by 160 percent by 2030 according to Goldman Sachs, tech firms are increasingly considering co-locating data centers near nuclear facilities. Meanwhile, companies like Constellation Energy and Microsoft have formed partnerships to revive dormant nuclear sites, reflecting the ongoing challenges in securing reliable energy for tech operations.
Why do we care?
Partnerships with nuclear providers or other localized energy sources, while complex, could offer stability in a landscape where grid reliance is becoming unsustainable. Expect an increase in partnerships with energy providers, particularly those in nuclear and renewable sectors, as companies look to secure power while aligning with sustainability commitments.
As regulatory and cost pressures mount, data centers will be pressed to maximize energy efficiency. This could drive innovation in cooling technologies, server optimization, and AI-driven energy management systems, making energy efficiency a strategic differentiator for data center operators.
That has a number of second-order effects worth tracking.