Amazon.com Inc. signed an agreement with utility giant Dominion Energy Virginia on Wednesday to pursue small modular reactor (SMR) nuclear development in the commonwealth to help meet the surging demand for energy.
The memorandum of understanding calls for Amazon (NASDAQ: AMZN) and Dominion to explore ways to support the development and financing of SMRs, which can generate the same constant and reliable carbon-free power that a typical nuclear plant offers but with a much smaller footprint, lower capital costs and quicker build times.
The Seattle tech giant formally announced the agreement during an event at its second headquarters in Arlington. U.S. Energy Secretary Jennifer M. Granholm, Virginia Gov. Glenn Youngkin, Virginia Sens. Mark Warner and Tim Kaine and others attended the event.
Amazon is committing more than $500 million commitment toward the Dominion effort and two other related ones in the Pacific northwest.
These small plants could prove critical to companies such as Amazon, which maintains sprawling data centers with high energy demands that the infrastructure of the utility grid has struggled to meet in recent years. It's estimated that 20% of the energy that Dominion provides Virginia, home to more data centers than any other state, is consumed by these computing warehouses.
“Small modular reactors are a huge piece of how we're going to solve this puzzle of getting to 100% clean electricity by 2035 while responding to all of the demand that will be created as a result of the data centers and the new factories, etcetera, that are coming online,” Granholm said during the event.
She then announced that applications are now open for $900 million in federal funding, established in part from the clean energy provisions in the Infrastructure Investment and Jobs Act, that's been set aside for companies looking to deploy SMRs across the U.S.
Dominion said its agreement with Amazon is designed to keep potential cost and development risks associated with the effort from affecting its customers and capital providers as it remains "committed to the credit and risk profile objectives" of these developments.
In a statement, Dominion President and CEO Robert Blue said the partnership follows other carbon-free power generation developments the utility provider has pursued in Virginia. In July, Dominion began requesting proposals from SMR nuclear technology companies to analyze the feasibility of developing an SMR at its North Ana Power Station in Louisa County.
Amazon reached this agreement with Dominion during a broader rollout of partnerships with others across the country to develop innovative nuclear energy projects to meet growing energy demands.
In Washington state, Amazon entered an agreement with Energy Northwest, a consortium of state public utilities, to develop four advanced SMRs that can generate roughly 320 megawatts of capacity upon the completion of this project's first phase by the early 2030s. Related to this, Amazon also announced an investment in X-energy, a developer of SMR reactors and fuel, to help provide energy capacity for this project in the Pacific Northwest.
