Constellation seeks to install data centers in power plants despite regulatory setback – 11/04/2024 at 8:49 p.m.

Constellation seeks to install data centers in power plants despite regulatory setback – 11/04/2024 at 8:49 p.m.
Constellation seeks to install data centers in power plants despite regulatory setback – 11/04/2024 at 8:49 p.m.

((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))

(Added details on Constellation’s co-location plans in paragraph 5, background and Talen’s statement from paragraph 10)

Constellation Energy will continue seeking deals to develop data centers at its U.S. power plant sites, days after federal regulators dealt a blow to so-called co-location agreements, company executives said Monday .

The Federal Energy Regulatory Commission on Friday rejected a deal to increase the energy capacity of an Amazon data center connected directly to Talen Energy TLN.O’s nuclear power plant in Pennsylvania, a decision seen as a hindrance to the conclusion of similar agreements.

Constellation said it was seeking guidance from regulators after FERC’s decision on co-location, which had become a promising prospect for Big Tech’s plans to quickly access large amounts of energy for its expansion of the AI instead of waiting years to connect to the network.

“We will work to achieve this regular clarity while pursuing colocation business strategies permitted by our existing rules,” Joseph Dominguez, Constellation’s chief executive, said on a company earnings call at the address.

Mr. Dominguez outlined the outlines of future co-location agreements, including the requirement for nuclear energy directly powering data centers to switch to grid power in the event of a supply emergency and the possibility of reselling emergency power for regional market centers.

“There are multiple regulatory and commercial pathways to address co-location issues, and we will work quickly with our customers and other stakeholders to put them in place”

Constellation CEG.O, which is the largest operator of nuclear power plants in the United States, had backed Talen in the regulatory battle. Shares of nuclear power plant operators have soared this year, driven in part by the prospect of developing co-located data centers.

Constellation stock was down about 10% on Monday.

FERC was approached by electric companies Exelon and American Electric Power, which opposed the Talen-Amazon data center interconnection deal, saying it threatened to increase electricity bills for ordinary customers and erode network reliability.

Talen’s nuclear data center in Susquehanna, sold to Amazon this year, would have a capacity of 960 megawatts, enough electricity for all Philadelphia homes.

By a 2-1 vote, FERC rejected Talen’s request to expand the data center’s capacity beyond 300 megawatts. This vote follows a FERC technical conference () which aimed to discuss broader issues related to data center co-location.

Diverting this electricity, which is currently routed from the nuclear plant to the broader grid, could unfairly shift costs to the public and worsen a supply-demand imbalance in the regional electricity market PJM Interconnection, a declared the majority of voting commissioners.

In a statement posted on its website Sunday, Talen Energy said it would consider various methods to quickly power data centers.

“The data center economics will require a holistic approach to meeting increased demand, including colocation,” the company said.

-

-

PREV Two Beauceronnes become millionaires
NEXT Nuclear energy companies fall after US regulators block Amazon-Talen deal – 04/11/2024 at 8:58 p.m.