Amazon Web Services (AWS) has acquired a nuclear powered, carbon-free data center campus from Talen Energy Corp. for $650 million. Talon will receive $350 million upfront, and $300 million assuming the campus achieves expected development milestones in 2024.
Talen will use the proceeds to pay down various debt and to pay various expenses. The deal's expected net proceeds will be roughly $361 million, Talen estimated.
Details surfaced in a Talen financial presentation.
This is M&A deal number 108 that Sustainable Tech Partner has covered so far in 2024. See all M&A deals involving sustainability, climate tech and green IT services listed here.
Talen: Energy Business Background
Talen, based in Houston, Texas, owns and operates approximately 12.4 gigawatts of power infrastructure in the United States. The company produces and sells electricity, capacity and ancillary services into wholesale U.S. power markets.
Talen will supply long-term, carbon-free power to the data center campus. Under a separate agreement, Talen will receive additional revenue from AWS related to sales of carbon-free energy.
In a prepared statement about the deal, Talen CEO Mac McFarland (pictured, top of page) said: "We are pleased today to have sold our Cumulus data center campus, unlocking significant value for Talen. This transaction provides an attractive return on Talen's investment and vision in building Cumulus, and creates value through the sale of clean carbon-free power from our top-decile Susquehanna nuclear plant."
We have not seen a statement from AWS about the deal. We've asked the company for comment.
Amazon Web Services (AWS): Carbon Reduction Strategy
The campus acquisition appears to align with Amazon's larger sustainability strategy.
Amazon ($AMZN) expects to achieve net-zero carbon emissions across its business by 2040. Moreover, Amazon is marching toward powering its operations with 100% renewable energy by 2025, five years ahead of its original 2030 target, the company said in January 2023.
Moreover, the AWS business promotes dozens of Partner Sustainability Solutions to help customers "build towards net-zero carbon, mitigate climate risk, and drive business growth," the cloud giant assets. And the AWS Clean Energy Accelerator aligns energy organizations to work with startups on "solving their clean energy and decarbonization challenges."
See Amazon's detailed sustainability strategy and timeline here.
Nuclear Power, Clean Energy and Data Centers
Nuclear power continues to face social and political hurdles from some U.S. citizens. Still, numerous proponents believe nuclear power can fill a key energy void as the world moves away from fossil fuels and power-hungry data centers that run AI applications.
Key nuclear power investors include Microsoft co-founder Bill Gates.
