Amazon Acquires Nuclear Data Centre Campus for $650 Million
Published on Bloomberg
Amazon, the renowned e-commerce giant, has recently made a significant investment in the acquisition of a nuclear data centre campus. The deal, valued at a staggering $650 million, will enable Amazon Web Services (AWS) to have access to direct-connect, carbon-free power sourced from the Susquehanna power plant owned by Talen, the buyer of the nuclear data centre site.
It’s important to note that the transaction does not include Talen’s crypto-mining facility. However, the Susquehanna power station, now owned by Talen through a merger with a business owned by Riverstone Holdings since 2015, stands as the third-largest power station in the United States, generating a substantial 2.5GW of power.
Amazon’s investment in this data centre campus reflects an impressive Multiple on Invested Capital (MIC) of 2.5x for Talen. AWS has ambitious plans for the development of a cutting-edge 960 MW data centre campus, with incremental power commitments to Talen increasing by 120 MW, allowing for potential expansion up to a capped 480 MW.
The agreements between AWS and Talen specify that each capacity increase will maintain a fixed price for a decade, following which it will be adjusted based on PJM energy and capacity prices. PJM, an organization responsible for managing wholesale electricity in Pennsylvania and nearby regions, will play a crucial role in the pricing mechanism.
Talen, having already completed a hyperscale facility of 48 MW in January 2023, also possesses the power station initially built in the 1980s by PPL. These assets were included in Talen’s acquisition.
In terms of payment, Amazon will provide $350 million to Talen at the closing of the deal, while an additional $300 million will be held in escrow. The latter amount is contingent upon the achievement of specific development milestones, to be reached by 2024.
Amazon’s investment in this nuclear data centre campus signifies the company’s commitment to advancing its technological infrastructure. With the growing demand for data processing and storage capabilities, this move positions Amazon as a leading player in the data centre industry.
Analyst comment
Positive news. Amazon’s acquisition of a nuclear data centre campus reflects their commitment to advancing their technological infrastructure. The investment positions Amazon as a leading player in the data centre industry. Expect increased market presence and potential for further expansion in the future.
