Monday, March 11, 2024

Amazon Pays $650 Million for Nuclear-Powered Data Center in Pennsylvania

 By Mark Heschmeyer CoStar News

Amazon Web Services bought a northeast Pennsylvania data center site in the shadow of a nuclear power plant, a source of carbon-free energy for the digital hub to help the tech giant meet its emission goals.

The deal comes as data center demand surges, driven by the rapid growth of artificial intelligence, and pushes developers into new markets.

AWS paid $650 million for the 1,200-acre property, making it the largest individual U.S. commercial sale of the year. The cloud computing business of Seattle-based e-commerce giant Amazon is one of the world's largest providers of those services with more than 100 data centers in over 20 countries.

Houston-based Talen Energy sold the site as-is with one data center on the property. AWS expects to expand the campus to up to 960 megawatts of data center capacity, or the equivalent of the energy consumption of nearly 900,000 houses. Data centers are measured in their power-handling ability as opposed to square footage.

Amazon has set a goal to reach net-zero carbon emissions by 2040 — 10 years ahead of the Paris Agreement deadline, a legally binding international accord on climate change.

“We’re on a path to power our operations with 100% renewable energy by 2025 — five years ahead of our original 2030 target,” Erika Reynoso, an Amazon spokesperson, said in an email to CoStar News. “To supplement our wind and solar energy projects, which depend on weather conditions to generate energy, we’re also exploring new innovations and technologies, and investing in other sources of clean, carbon-free energy. This agreement with Talen Energy for carbon-free energy is one project in that effort.”

Data centers are attracting a broad swath of investors across the globe. Blackstone acquired data center developer and owner QTS Data Centers in 2021 for $10 billion and, just last year, QTS signed at least $8.5 billion of development deals preleased to major technology companies that need more AI capabilities.

The sites generate significant heat and humidity that must be mitigated to keep equipment functioning and prevent fire hazards and other safety issues. While cost-effective, cooling data centers takes a significant amount of water. The average data center uses 1 million to 5 million gallons of water per day, equivalent to the daily water use of a town with a population of 10,000 to 50,000 residents, according to a study this month by Frederick County, Maryland.

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