Talen Energy offers up nuclear-powered crypto mining campus stake, sources say

By Laila Kearney

NEW YORK (Reuters) – Talen Energy is considering selling its stake in a cryptocurrency mining operation powered by a Pennsylvania nuclear power plant in a transaction marketed at both data center developers and crypto miners, three people familiar with the process said.

The Nautilus facility is the first cryptocurrency mining operation to be directly supplied by on-site nuclear energy, which has recently become a premium power source as the world’s largest companies race to expand their artificial intelligence and cloud computing businesses.

Many tech companies make climate commitments to power their data centers with clean energy, but the companies also require those centers to run uninterrupted. Since the best renewables only generate electricity when the wind blows and the sun shines, nuclear has become attractive because of its ability to run 24/7 without producing direct carbon emissions.

Talen aims to attract potential buyers for its stake in Nautilus by selling its adjacent data center and surrounding land to Amazon Web Services in a deal it announced in March.

The $650 million sale allows AWS to acquire more than 900 megawatts (MW) of electricity from Talen’s 2.5-gigawatt Susquehanna nuclear power plant over a phased process spanning several years.

The full cryptocurrency mining facility, which is 75% owned by Talen and the remaining 25% by crypto miner TeraWulf, has a capacity of 200 MW, which is enough power for around 160,000 homes.

The deal also makes AWS the owner of the crypto mining neighbors, who have nine remaining years of lease and power purchase agreements on the site, the people said, speaking on condition of anonymity because the talks are confidential.

Talen did not respond to requests for comment. AWS declined to comment.

If AWS buys out its tenants, the tech giant would get quick access to 200 MW of electricity instead of having to wait years, the sources said. Other buyers might only be able to afford the remaining nine years of the lease and then need an extension granted by AWS, the sources said.

The rush in the technology sector has increased the cost of supporting the operations of these sectors.

National average asking prices for data center capacity increased by about 19% in 2023 from the previous year, and growth is expected to continue in double digits this year, according to a report by CBRE Group.

The growth in the sector has also boosted the share prices of energy companies that are expected to cash in on the increased demand, particularly independent energy companies with nuclear fleets that can strike deals similar to the one between AWS and Talen.

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Talen’s share price has increased by more than 90 percent this year.

(Reporting by Laila Kearney; Editing by Marguerita Choy)