Google Invests in Venture to Build Energy Parks for Data Centers

(Bloomberg) -- Alphabet’s Google is investing in mega energy parks that will generate renewable power as the company races to fuel its data centers.

The technology behemoth entered into a partnership with Intersect Power, an independent power producer, and investment firm TPG Rise Climate LP to design and build big energy plants next to data center campuses, the companies said Tuesday.

The aim is to have enough renewables, battery storage capacity and related transmission infrastructure to support multiple gigawatts of data centers for Google, which will cost about $20 billion.

To support this, Google also made an equity investment in Intersect Power, which raised more than $800 million in a corporate fundraising round. TPG led the round that included CAI and Greenbelt Capital Partners. Together their stakes serve as an equity investment that helps Intersect raise debt for the energy campuses.

The energy parks would provide a much-needed reliable source of power as aging US grids struggle to meet demand from artificial intelligence and electrification of homes, vehicles and factories. Google, Microsoft Corp., Amazon.com Inc. and other big data center developers will require billions of dollars of investments to meet their AI needs.

Google’s plan is to build the data centers and new power supplies so they connect to the same substation within a state or regional grid, which should help speed up the process to get them online, said Amanda Peterson Corio, global head of data center energy at Google. The company would pay 100% of the charges needed to upgrade the grid related to these projects, she said. 

Think of it as BYOP: Bring Your Own Power, said Sheldon Kimber, chief executive officer of Intersect Power. An AI campus that would use about 1 gigawatt of electricity would require a gigawatt each of wind, solar and battery storage with two to four hours of duration, sprawled over at least 10,000 acres. A gigawatt is typically enough to power 200,000 homes in Texas, and about four times that in other parts of the country.

Intersect is in the market raising debt for its first project with Google, which is slated to come online in 2026. Google, TPG and Intersect declined to state size and location of the project.