Solar

Intersect Power partners with Google, TPG to scale clean energy for data centers

Intersect Power would invest $20 billion in renewable and storage assets the end of the decade.
Intersect Power partners with Google, TPG to scale clean energy for data centers
(Credit: Intersect Power)

Intersect Power, Google and TPG Rise Climate are partnering to scale renewable power and storage solutions for new Google data centers.

The partners plan to develop industrial parks with gigawatts of data center capacity in the U.S., co-located with new clean energy plants to power them. The first phase of the first clean energy co-located project is expected to come online by 2026 and be fully complete in 2027, Google said. 

The partnership includes a planned $20 billion investment by Intersect Power in renewable power infrastructure by the end of the decade. Intersect Power has already begun financing the partnership’s first project.

The “power-first” approach to data center development is intended to increase the speed of infrastructure deployment, ease grid burden, and improve overall reliability and affordability for energy customers, Intersect Power said. The companies argue that by co-locating data center load with large amounts of high capacity factor clean electricity and added battery storage, data centers can achieve high percentages of renewable energy while reducing the transmission required to connect generation to load over longer distances.

“This partnership is an evolution of the way hyperscalers and power providers have previously worked together. We can and are developing innovative solutions to expand data center capacity while reducing the strain on the grid,” said Sheldon Kimber, CEO and Founder of Intersect Power.

Under the terms of the partnership, Intersect Power will build new clean energy assets, with Google providing offtake via newly constructed data center campuses as an anchor tenant in co-located industrial parks. Once built, the Google data center would come online alongside its own clean power, bringing new generation capacity to the grid to meet its own load.

Intersect Power also announced a more than $800 million funding round led by TPG Rise Climate and Google, with participation from Climate Adaptive Infrastructure and Greenbelt Capital Partners. Additionally, Google, TPG Rise Climate and other investors are making a capital investment in Intersect Power.

According to a study published by EPRI in May, data centers could consume up to 9% of U.S. electricity generation by 2030 — more than double the amount currently used. Demand for computing power from data centers, fueled by artificial intelligence and other new technologies, requires enormous amounts of power. Ohio is seeing unprecedented demand from data center customers, especially in the central part of the state.

 In the U.S., data center demand is expected to reach 35 GW by 2030, up from 17 GW in 2022, McKinsey & Company projects. Grid operators and utilities are projecting significant load growth driven by electrification, new manufacturing, and data center development. 

Utilities across the U.S. are grappling with how to equitably address growing data center demand through tariff structures. In late August, the Federal Energy Regulatory Commission (FERC) rejected a proposal from Basin Electric Power Cooperative that requested to create new wholesale power sales rate schedules for cryptocurrency centers and other large loads.

Some utilities are attempting to collaborate with technology providers, however. Amazon, Google, and Microsoft supported an effort by Duke to develop new tariffs designed to support the long-term sustainability goals of data center owners. The proposed Accelerating Clean Energy (ACE) tariffs would enable large customers to directly support carbon-free energy generation investments through financing structures and contributions that address project risk to lower costs of emerging technologies. ACE tariffs would facilitate onsite generation at customer facilities, participation in load flexibility programs, and investments in clean energy assets.

The idea of co-locating data centers with power generation is not new. Several power producers and data center developers are exploring it. Last month the Federal Energy Regulatory Commission (FERC) rejected a revised Interconnection Service Agreement (ISA) proposal that would have allowed expanded co-located load at an Amazon Web Services (AWS) data center connected to Talen Energy’s Susquehanna Nuclear plant in northeast Pennsylvania. The proposal has raised concerns about cost-sharing and grid reliability.

Originally published in Renewable Energy World.