The US government rejects Amazon's nuclear power supply application, potentially affecting AI and Bitcoin mining power needs.

The U.S. Federal Energy Regulatory Commission (FERC) recently rejected a partnership proposal from Amazon and Talen Energy, which aimed to have a Pennsylvania nuclear power plant directly supply power to Amazon's AI data centers. This rejection has halted Amazon's plan to secure stable power directly from the nuclear power plant through a behind-the-meter energy storage model. It also highlights the mismatch between the increasing power demands of the tech industry and the development speed of existing power infrastructure, a situation similar to what Bitcoin miners are currently facing.

FERC Ruling Causes Nuclear Companies' Stock Prices to Drop, Shared Nuclear Power Sites Still Under Evaluation

The decision by FERC has led to a decline in the stock prices of several large nuclear energy companies. The industry had hoped to address the significant power needs of data centers through "shared nuclear power sites." However, FERC believes that direct power supply partnerships like this may affect the stability of power supply for other users, thus requiring more time for evaluation.

Industry Views Ruling as Temporary Setback, Awaits Clearer Guidance from FERC

Although this ruling has temporarily delayed Amazon's "behind-the-meter energy storage" project, nuclear energy companies have not given up. They view this as a temporary setback and anticipate that FERC will provide clearer guidelines regarding "shared nuclear power sites" in the future. With the increasing power demands of AI data centers, technology companies are in urgent need of power, some are even willing to contribute financially to share construction costs and accelerate the progress of power infrastructure projects.

Note: "Behind-the-meter storage" refers to energy storage facilities installed behind a user's electric meter, typically in places like businesses, factories, or residences, to manage and optimize their own power needs. Unlike traditional "front-of-the-meter" storage, behind-the-meter storage is not directly connected to the public grid but is used internally.

Bitcoin Mining and AI Industry Both High Energy Consumers, Facing Power Supply Bottlenecks Together

The situation with this ruling mirrors the challenges faced by Bitcoin mining operators. Whether in AI data centers or Bitcoin mining, these high-energy industries are now facing the same pressure to quickly find large and stable sources of power.

Bitcoin miners typically choose areas with lower electricity costs and seek locations near power facilities such as hydroelectric or nuclear power plants to avoid issues like "unstable power supply" and "peak-hour" electricity costs. FERC's ruling restricting shared nuclear power sites indicates that similar "behind-the-meter energy storage" collaborations in the future may face stricter scrutiny.

The U.S. Treasury Department has proposed a 30% electricity tax on mining companies by 2025.

FERC StatesU.S. Grid Becoming Unsustainable, Fears Electricity Cost Pressure Being Shifted to the Public Led to Rejection

This ruling by FERC actually reflects concerns about the stability of the entire U.S. power grid. With the rapid growth in power demands from AI and data centers, the grid's burden is expected to increase significantly. FERC stated in the ruling that while AI development is critical for national security and economic growth, the rapid establishment of large-scale data centers will further strain the already aging grid, increase electricity costs, and eventually shift the burden to households and small businesses. FERC indicated that it was due to these considerations that the decision was made to reject the proposal.

Three Mile Island Project Demonstrates Shared Nuclear Power Potential, Industry Looks Forward to New Directions

It is worth noting that Amazon's "shared nuclear power site project" is not the only example of shared nuclear power. In September of this year, the collaboration project between Microsoft and Constellation received approval from U.S. authorities to repurpose the Three Mile Island nuclear plant in Pennsylvania to supply power to a data center. However, as the Three Mile Island plant is currently inactive, the restart of power supply will not affect existing users, which may be why this project was not blocked by FERC. This case demonstrates that if additional power sources can be added to data centers rather than diverting existing power, "shared nuclear power sites" remain feasible.

Amazon Needs to Find Alternative Solutions in the Short Term to Address Growing AI Power Demands

Amazon has been granted permission to extract 300 megawatts of power from the Susquehanna nuclear plant, a supply that is not affected by FERC's new ruling. However, as the power demands of data centers will continue to grow with AI development, Amazon still needs to find alternative solutions and reassess its future nuclear power supply strategy.

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