Amazon Just Locked In 20 Years of Nuclear Power. AI's Electricity Bill Now Runs to 2046.

On September 30, Amazon and Constellation Energy announced a 20-year agreement for Amazon to buy 690 megawatts of power from the Calvert Cliffs nuclear plant in Maryland. The deal will also pay for an upgrade that adds about 190 megawatts of new capacity to the plant, and gives Constellation the financial certainty to seek another 20 years of operation for reactors whose licences currently run out in the 2030s.

For a sense of scale: 690 megawatts is on the order of the electricity used by hundreds of thousands of homes. Amazon wants it for data centres, and it wants it fixed for two decades.

What happened

The confirmed terms, from Constellation's announcement and coverage by World Nuclear News, Maryland Matters, the Baltimore Sun and others:

• The power: 690 megawatts from Calvert Cliffs, a 1,790-megawatt plant in Lusby, on the western shore of the Chesapeake Bay. It is Maryland's only nuclear plant.
• The length: 20 years.
• The upgrade: about 190 megawatts of new, emissions-free capacity, expected to come online between 2030 and 2032. The companies say the agreement enables more than $3 billion of investment, including improvements across the whole plant.
• The licences: the plant's two reactors are licensed through 2034 and 2036. Constellation says the long-term revenue supports its plan to seek 20-year extensions for both.
• The wider supply: a separate retail electricity agreement covers Amazon's operations across PJM, the 13-state grid region that includes Maryland and Virginia.
• Further out: the companies say they are exploring whether next-generation reactors, including small modular reactors, could be built at the site.

The electricity will keep flowing into the regional grid as it does today. In effect, Amazon gets a fixed-price arrangement for power used by its facilities in the region, and Constellation gets a guaranteed buyer for two decades.

One correction to some headlines: several outlets described this as a "$3 billion deal". The $3 billion is the investment the agreement supports at the plant. None of the coverage we reviewed reports the price Amazon will pay for the power.

Why it matters

AI needs power that never switches off. Data centres run day and night, and the newest AI facilities use far more power than earlier generations. Wind and solar are cheap but vary with the weather. Nuclear plants run around the clock with almost no carbon emissions, which is why the largest tech companies have become their most eager customers.

The cheapest new nuclear power is at old plants. Building new reactors takes many years and has a history of overruns. An uprate, which upgrades an existing plant's equipment so the same site produces more power, and a licence extension, which keeps a working plant open longer, are faster and less risky. This deal does both.

It is part of a pattern. Amazon already has an agreement with Talen Energy for 1,920 megawatts from the Susquehanna nuclear plant in Pennsylvania, running to 2042. It has invested in X-energy, a developer of small modular reactors, and backs a planned small reactor project with Energy Northwest in Washington State. Amazon expects to spend about $220 billion on capital projects this year, much of it on AI data centres, and power is now one of the main limits on how fast those can be built.

What is still unclear

• The price. As above, the cost of the power has not been reported.
• The licence extensions. Constellation still has to apply for and receive them from the US Nuclear Regulatory Commission.
• The small reactors. "Exploring" is not a plan. There is no design, date or budget for new reactors at Calvert Cliffs.
• The effect on everyone else's bills. Data centre demand is a live political issue in the PJM region. In January, Maryland Governor Wes Moore joined other governors in pushing the grid operator to make large new data centres pay for the power they need, saying "Marylanders should not be asked to subsidize the soaring energy demands of large new data centers". Whether long-term deals like this one ease pressure on household and business prices, or add to it, is debated.

What it means for your business

1. Expect electricity to be a bigger part of AI costs. Power is now a major input to the cloud services you rent. If big providers are locking in supply for 20 years, energy costs are clearly on their minds, and over time they show up in prices.

2. If you are in a data centre region, watch your own bill. Businesses in the PJM states, from Virginia to Illinois, should follow utility rate cases. That is where the question of who pays for new data centre demand is decided.

3. Use reliable power as a selling point. In parts of Francophone Africa, unreliable electricity is the main obstacle to hosting data locally, and the same logic applies there as in Maryland: steady, around-the-clock power attracts digital investment. Businesses that can show dependable power, through solar with storage or a reliable connection, have an advantage in hosting, data services and remote work.

4. Check the green claims of your providers. Many cloud providers market their energy as clean. Deals like this one are how those claims are backed, so ask your provider which contracts cover the region where your data runs.

Questions You Should Be Asking

• How much of our cloud bill is, in effect, an electricity bill, and how exposed are we to rises?
• Is our local utility planning rate increases tied to data centre growth?
• Where does the electricity behind our cloud services come from?
• If our power went out for a day, what would it cost us, and what is our backup?

What To Watch Next

Constellation's licence extension filings for Calvert Cliffs, and whether the small modular reactor talks produce a concrete plan. Watch also for similar deals by Microsoft, Google and Meta: long-term contracts with existing nuclear plants are becoming a standard way for AI companies to secure power. For where the money behind all this hardware is going, see Amazon's reported plan to finance its AI chips.

Sources

• Constellation: Constellation and Amazon announce 20-year power purchase agreement adding 190 megawatts of nuclear capacity at Calvert Cliffs
• World Nuclear News: Constellation, Amazon agree nuclear-focused power purchase deal
• Maryland Matters: Large upgrade planned at Calvert Cliffs after power deal signed with Amazon
• Baltimore Sun: Amazon deal with Calvert Cliffs would extend nuclear plant's life, explore new reactors
• Data Center Dynamics: Amazon signs PPA with Constellation for Maryland nuclear plant
• ENR: Amazon deal backs $3B-plus Calvert Cliffs nuclear upgrade
• ANS Nuclear Newswire: Amazon, Constellation partner for Calvert Cliffs uprate
• Fox Business: Amazon locks in nuclear power for 20 years as energy demand surges
• Quartz: Amazon signed a 20-year nuclear power deal with Constellation Energy in Maryland
• Maryland Matters: Moore, other PJM governors push for changes at the nation's biggest electric grid
• Utility Dive: Talen to sell Amazon 1.9 GW from Susquehanna nuclear plant
• Amazon: 7 ways Amazon is thinking big about nuclear energy