According to the latest news, technology giants represented by the world's largest cloud computing company Amazon are waving their checkbooks to search for electrical power supplies, especially focusing on nuclear power plants that can provide uninterrupted and carbon-free energy 7x24 hours.

The problem is that these rich technology companies are not just purchasing new green energy, but trying to "dig" a piece of dedicated data center from the stockpile of nuclear power supply.

Nuclear power plants are becoming a "hot cake".

In order to meet the power demand of the artificial intelligence "fever", about one-third of the owners of nuclear power plants across the United States are negotiating power supply with technology giants.

Insiders revealed that Amazon AWS is approaching a direct power supply agreement with Constellation, the largest nuclear power plant owner in the United States. Earlier this year, the cloud computing giant spent $650 million to buy a 1,200-acre "nuclear data center park" from energy operator Talen Energy - the data center is located next to two nuclear reactors.

(Source: Talen Energy)

An Amazon spokesperson responded that the company is exploring new technologies and innovations, and investing in other clean and carbon-free energy sources to supplement the wind and solar energy projects that rely on the weather.

At the same time, the alliance between these technology giants and nuclear power plants has also caused tension in several states such as Pennsylvania, Connecticut, Maryland, and New Jersey.

Patrick Cicero, consumer advocate in Pennsylvania, warned that he would be concerned about the cost and reliability of electricity if the biggest energy consumer can benefit from the priority of power supply. Cicero said, "No one has ever told the nuclear power plant that we can accept all the power you provide."

However, Cicero also admitted that it is not clear whether the state government has regulatory authority to intervene in such transactions.

"Behind-the-meter transactions" and disputes

The data center purchased by Amazon can accept up to 960 megawatts of power. This acquisition has also accelerated the so-called "behind-the-meter transactions", where the meter refers to an electrical meter, and refers to large customers purchasing power directly from power plants.

These transactions also mean that there is no need for new grid infrastructure, which means that data centers can be built faster and avoid transmission and distribution costs that constitute a major part of the public utility costs.

The nuclear power industry in the United States also has a special background: After the "overbuilding" in the 1990s, the entire industry has been in "hard times" for decades. At the same time, due to the difficulty in competing with wind, solar, and natural gas power plants in terms of cost, there has also been a wave of bankruptcies. However, with the arrival of technology giants willing to pay a premium to ensure uninterrupted and carbon-free power, these companies have also become a "hot cake" in the capital markets.

Vistra, the largest competitive power company supplier in the United States, has seen its stock price almost triple from the beginning of the year. The company is discussing "behind-the-meter transactions" with many technology companies. CEO Jim Burke said that customers have come to them and many industry insiders, shouting "I need as much power as possible".

(Vistra stock price daily chart, source: TradingView)

As mentioned earlier, this year's stock price of Alliant Energy has also risen by nearly 70%. The company owns 14 nuclear power plants in the United States, producing one-fifth of the country's nuclear power.

(Unified Energy Company stock price daily chart, source: TradingView)

Joseph Dominguez, President and CEO of the company, also emphasized the rationality of cooperation with technology giants. Dominguez introduced that there is an oversupply of electricity in a large area from Pennsylvania to Illinois, which leaves space for data centers.

From another perspective, signing contracts with data centers willing to pay a premium can cover the costs of re-licensing these nuclear power plants, extend their power generation life by another 20 years, and support potential investments to increase power generation capacity. Dominguez said: "If there were no such contracts, we would lose nuclear power again and return to the past."

The "power grab" war sparked controversy.

Although it is difficult to predict how much electricity data centers will use at present, related anxiety is constantly rising.

Connecticut Senator Norm Needleman supported fiscal incentives to data centers years ago, but he did not expect that this would cause power plants to disconnect from the existing power grid. Needleman publicly spoke to the media, asking, "If we lose zero-carbon energy, what can we use to replace it?"

In New Jersey, Ralph Izzo, CEO of the Public Service Enterprise Group (PSEG), said publicly that the institution is negotiating with data center vendors, including direct sales of electricity.

As a background, about 40% of New Jersey's electricity comes from nuclear power, including nuclear power plants owned by PSEG. Brian Lipman, director of the state's rate counsel office, questioned whether the state had spent $300 million over the past six years to help the company's power plants maintain operations, not to mention the billions of dollars spent before, and doesn't know how the investment is faring now.

Lipman said that New Jersey plans to achieve 100% clean energy generation by 2035, which cannot be achieved without nuclear energy.

Not only does the state government feel uneasy about the "power grab" war, but so do the US power grid and energy system. At the end of June, American Electric Power and ExxonMobil jointly requested that the Federal Energy Regulatory Commission hold a hearing on Amazon's acquisition of nuclear data centers, arguing that the tech giant may pass on "up to $140 million in costs" to other users, and emphasizing that data centers should not ride for free on grids paid for by others.

Talen Energy retaliated, calling the request a "misleading behavior that stifles innovation".

From another perspective, power supply from nuclear power plants is not 100% reliable, meaning data centers may still need to urgently obtain energy from the grid. Informed sources revealed that the nuclear data center bought by Amazon encountered a power plant shutdown event last autumn, resulting in the park having to obtain electricity from the grid.