Google strikes $3b hydropower deal for its AI data centers

Google has entered a US$3 billion agreement with Brookfield Asset Management to use hydropower for its data centers in the mid-Atlantic region.

The 20-year contract will draw 670 megawatts from Brookfield’s Holtwood and Safe Harbor hydroelectric facilities in Pennsylvania.

This agreement is the first initiative under Brookfield’s “Hydro Framework Agreement,” which aims to supply 3,000 megawatts of carbon-free hydropower to Google.

The deal is noted as the largest corporate hydroelectric agreement in the world.

Google also plans to invest US$25 billion in data centers across Pennsylvania and nearby states over the next two years.

The move is part of Google’s broader effort to run entirely on carbon-free energy by 2030.

🔗 Source: Quartz

🧠 Food for thought

1️⃣ Google’s shift to hydropower marks a strategic evolution in its renewable portfolio

Google’s latest hydropower deal represents a significant shift in its renewable energy strategy that has evolved over 14 years of clean energy investments.

The company began with wind energy in 2010, signing its first 114 MW wind farm agreement in Iowa, before gradually expanding to solar as prices fell by 80% over a six-year period 1.

By 2019, Google had built a renewable portfolio of 5,500 MW that was predominantly wind and solar-based, with its largest purchase being a 1,600 MW deal that increased its renewable energy portfolio by 40% 2.

This new 3,000 MW hydropower framework agreement represents an important diversification toward hydropower, which offers more consistent generation than intermittent sources like wind and solar, providing crucial reliability for power-hungry data centers.

The move specifically addresses a key challenge in Google’s 100% carbon-free energy goal: finding renewable sources that can provide reliable baseload power, something hydroelectric facilities excel at compared to weather-dependent alternatives.

2️⃣ Corporate power purchase agreements are reshaping energy markets

Google’s $3 billion hydropower contract exemplifies how large corporations are fundamentally transforming renewable energy markets through long-term power purchase agreements (PPAs).