Should Big Tech Plug Its Data Centers Directly Into Power Plants?

'Looking for a quick fix for their fast-growing electricity diets, tech giants are increasingly looking to strike deals with power plant owners to plug in directly,' reports the Associated Press, 'avoiding a potentially longer and more expensive process of hooking into a fraying electric grid that serves everyone else.' (It can take up to four years to connect a data center to the grid, one data center trade group says in the article — years longer than it takes to build a new data center.)

But the idea of bypassing the grid is 'raising questions over whether diverting power to higher-paying customers will leave enough for others and whether it's fair to excuse big power users from paying for the grid.'

Front and center is the data center that Amazon's cloud computing subsidiary, Amazon Web Services, is building next to the Susquehanna nuclear plant in eastern Pennsylvania. The arrangement between the plant's owners and AWS — called a 'behind the meter' connection — is the first such to come before the Federal Energy Regulatory Commission. For now, FERC has rejected a deal that could eventually send 960 megawatts — about 40% of the plant's capacity — to the data center. That's enough to power more than a half-million homes... [But the FERC's 2-1 rejection 'was procedural. Recent comments by commissioners suggest they weren't ready to decide how to regulate such a novel matter without more study.']

In theory, the AWS deal would let Susquehanna sell power for more than they get by selling into the grid... The profit potential is one that other nuclear plant operators, in particular, are embracing after years of financial distress and frustration with how they are paid in the broader electricity markets. Many say they have been forced to compete in some markets against a flood of cheap natural gas as well as state-subsidized solar and wind energy. Power plant owners also say the arrangement benefits the wider public, by bypassing the costly buildout of long power lines and leaving more transmission capacity on the grid for everyone else...

Monitoring Analytics, the market watchdog in the mid-Atlantic grid, wrote in a filing to FERC that the impact would be 'extreme' if the Susquehanna-AWS model were extended to all nuclear power plants in the territory. Energy prices would increase significantly and there's no explanation for how rising demand for power will be met even before big power plants drop out of the supply mix, it said.

Read more of this story at Slashdot.