How Amazon is De-Risking its Supply Chain with Nuclear

Research firm BloombergNEF has ranked Amazon as the world's leading corporate purchaser of carbon-free energy for the fifth year running.

According to the research firm, Amazon now holds the largest such portfolio of any company in the global economy.

The online retailer has committed to developing more than 40 GW of total carbon-free energy capacity. This spans more than 700 projects in 28 countries.

The portfolio comprises utility-scale solar and wind farms, offshore wind installations, on-site solar, battery storage and a fast-growing nuclear footprint.

Kara Hurst, the firm's Chief Sustainability Officer, notes that these investments go beyond securing power for internal operations.

"When companies like Amazon invest in new carbon-free energy projects, we're not just helping to power our own operations," Kara explains.

"We're adding brand-new sources of carbon-free energy to the power grid that everyone uses – the same grid that powers homes, hospitals and schools."

Amazon states the combined capacity is sufficient to power the equivalent of more than 12.1 million US homes.

However, the procurement strategy is vital for the energy-hungry data centres central to its cloud computing and AI businesses.

Amazon backs nuclear expansion

Perhaps the most consequential development in the energy strategy at Amazon is a deepening commitment to nuclear power.

The company is specifically interested in small modular reactors (SMRs) which produce nuclear energy at a smaller scale.

In Washington state, Amazon has agreed with Energy Northwest to fund the development of four advanced SMRs with an initial capacity of 320 MW.

Eventually, it will be possible to expand the capacity of these reactors to 960 MW. Amazon says this is enough to power more than 770,000 homes.

While the first units are not expected to come online until the early 2030s, SMR technology could mature into a commercial solution by then.

Furthermore, Amazon has invested US$500m in X-Energy, a reactor developer. They target bringing more than 5 GW of new nuclear capacity online in the US by 2039.

Maria Korsnick, President and CEO of the Nuclear Energy Institute, believes nuclear energy could play a role in powering digital infrastructure.

"Nuclear energy is the nation's largest source of clean electricity, providing reliable baseload power essential to meeting our energy goals," Maria says.

"As electricity demand continues to grow due to AI and data centres, corporate investments in nuclear technologies like small modular reactors are critical to fuelling innovation while reducing emissions."

AI manages energy storage

While solar and wind make up the largest part of the portfolio, they face issues regarding intermittency.

To address this, Amazon is investing in energy storage projects to ensure supply when the sun does not shine or the wind does not blow.

To date, Amazon has 11 utility-scale battery projects and hopes to procure more.

At the Baldy Mesa solar installation in the Mojave Desert, the company is deploying AI-driven software.

This technology analyses up to 33 billion data points annually to determine when to store and release energy based on live grid conditions.

This combination of digital and physical technology could help smooth out supply during moments of peak demand.

Procurement aids grid reliability

Amazon believes its clean energy investments benefit regional grid infrastructure.

In Mississippi, Amazon has a partnership with Entergy to develop 650 MW of new renewable energy capacity.

Amazon is also contributing to the US$300m "Superpower Mississippi" campaign by Entergy, which aims to reduce outage frequency for residential customers.

Ray Long, President and CEO of ACORE, suggests such deals are significant for national energy security.

"Corporate renewable energy procurement has become one of the largest drivers of new carbon-free energy projects in the US," Ray says.

"Companies like Amazon that commit to long-term power purchase agreements provide the financial certainty that enables developers to build new renewable generation at scale."

Ray adds that this helps "to meet America's growing electricity demands while establishing economies of scale that benefit all communities by adding low-cost carbon-free energy to the grid."

Regarding internal efficiency, the Seattle-based firm had a global Power Usage Effectiveness (PUE) score of 1.15 in 2024.

Regarding water usage, Amazon had a Water Usage Effectiveness figure of 0.15 litres per kilowatt-hour in 2024, a 17% improvement on its 2023 score.

"Amazon is committed to maximising energy efficiency across our global operations, including our data centre network, electric delivery fleets and hundreds of fulfilment centres," Kara says.