Google, Intersect Power, TPG Invest $20B In Clean Energy

In the pursuit of breaking ground, Google has joined a pioneering partnership with clean energy developer Intersect Power and alternative asset firm TPG, committing $20 billion in investment in renewable energy infrastructure by 2030. The initiative is a push to support the new data center capacity expansion in the U.S., with clean energy, as the tech giant seeks to curb the growing energy demands of artificial intelligence growth.

As part of this partnership, Intersect Power has raised $800 million in a new funding round, led by TPG's climate-focused fund, TPG Rise Climate, along with Google. This is a continuation of the significant support from TPG Rise Climate to Intersect Power, which had raised $750 million in financing in 2022. Founded in 2016, Intersect Power specializes in scalable clean energy projects, providing low-carbon electricity and fuels to North American markets.

Intersect Power CEO and Founder Sheldon Kimber highlighted the transformational nature of the partnership, which represents a new paradigm for how hyperscale technology companies and power providers collaborate. "We can and are developing innovative solutions to expand data center capacity while reducing the strain on the grid," Kimber said. He underlined the necessity of deep, collaborative partnerships and creative problem-solving to meet the demands of AI growth and society's increasing electricity needs.

Google's alliance with Intersect Power arrives in the midst of a steep spike in emissions related to the proliferation of data centers. These are primarily built for the operations of artificial intelligence and consume tremendous quantities of electricity, straining the power grid. While Google has been ambitious in its sustainability goals and set targets such as achieving net-zero emissions across its operations and value chain by 2030 and reducing its combined Scope 1, 2, and 3 emissions by 50% compared with 2019 levels, its emissions have increased 13% in 2023 and surged 48% since 2019. This rise has been attributed to data center electricity consumption outpacing the development of carbon-free energy projects.

This is achieved through the synchronized development of data center capacity along with new clean power assets in addressing the challenge. Intersect Power will lead in developing renewable energy and storage projects while Google would anchor in co-located industrial parks for new data centers to be run off existing renewable power infrastructure.

Amanda Peterson Corio, Global Head of Data Center Energy at Google, underscored the importance of aligning electricity demand with clean energy development. “To realize AI’s potential, the growth in electricity demand must be met with new, clean power sources,” she stated. Peterson Corio described the initiative as a unique opportunity to rethink data center development by integrating them with grid-connected carbon-free energy. She also said Google was looking to replicate this model throughout the U.S. and then around the world.

The first co-located clean energy project, under this partnership, will begin operations in 2026 and be fully complete in 2027. It is a new model aiming to show how data centers and renewable energy infrastructure could be developed together in the service of both digitization and decarbonization.

This is a perfect storm of two big trends: decarbonization and digitization," said Jim Coulter, Executive Chairman of TPG and Managing Partner of TPG Rise Climate. "Bringing together a leading carbon-free power producer, one of the world's largest hyperscalers, and the leading private equity investor in climate solutions to capitalize on this opportunity, we are committed to delivering carbon-free data centers at lower cost and greater scale," Coulter added.

This is a bold step forward in the tech sector's efforts to address its environmental concerns. Companies like Google, confronted with the challenges of AI demand on energy, have only a few options to stay on the path of growth and sustainability while fulfilling operational needs for advanced computing.