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

[August 01, 2024]  By Laila Kearney

NEW YORK (Reuters) - Talen Energy is looking to sell its stake in a cryptocurrency mining operation powered by its Pennsylvania nuclear plant in a process marketed to both data center developers and cryptominers, three sources familiar with the process said.

The Nautilus facility is the first digital coin mining operation directly supplied with on-site nuclear energy, which recently became a premium power source as the world's largest companies race to expand their artificial intelligence and cloud computing businesses.

Many technology companies have climate pledges to power their data centers with clean energy, but the companies also require those centers to run uninterrupted. With top renewable energy sources only producing electricity when the wind blows and the sun shines, nuclear has become appealing for its ability to run around-the-clock without producing direct carbon emissions.

Talen is aiming to attract potential buyers of its share of Nautilus after selling an adjacent data center and the surrounding land to Amazon Web Services in a deal announced in March.

The $650 million sale allowed AWS to tap into more than 900 megawatts (MW) of electricity from Talen's 2.5 gigawatt Susquehanna nuclear plant in a phased-in process over several years.

The full coin mining facility, of which Talen owns 75% and cryptominer TeraWulf the remaining 25%, has a capacity of 200 MW, or enough power for about 160,000 homes.

The deal also turned AWS into the landlord of its cryptominer neighbors, which have a remaining nine-year lease and power purchase agreement on the site, said the sources, who asked not to be named due to the confidentiality of the discussions.

Cryptocurrency miners are seen in a liquid immersion cooling mining tank at the TMG Core stand during the Bitcoin Conference 2022 in Miami Beach, Florida, U.S. April 6, 2022. REUTERS/Marco Bello/File Photo

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

If AWS buys out its tenants, the giant tech company could swiftly access the 200 MW of electricity instead of waiting years, the sources said. Other buyers might only be able to ride out the remaining nine-year lease and then require an extension granted by AWS, the sources said.

The scramble by the technology industry has driven up the cost of powering their operations.

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

Growth in the sector has also increased share prices of power companies expected to be able to cash in on rising demand, particularly independent power companies with nuclear fleets that can strike deals like the one between AWS and Talen.

Talen's share price has risen by more than 90% this year.

(Reporting by Laila Kearney; Editing by Marguerita Choy)

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