Can This Google Partnership Hurry Power Project Development?

Google is spearheading an energy initiative to streamline the integration of clean power with data centre expansion.

The company has forged a strategic partnership with Intersect Power and TPG Rise Climate, aiming to closely link the growth of data centres with the generation of clean energy.

This collaboration seeks to mitigate the extensive timeline and infrastructure demands typically associated with new power projects.

How will it work?

The novel strategy, outlined by Ruth Porat, President & Chief Investment Officer of Alphabet and Google, promises to synchronise new clean power generation with the expansion of data centres.
Ruth explains how this approach will "enable US leadership in AI development."

The initiative involves Google, Intersect Power, and TPG Rise Climate collaborating to develop industrial parks in the US.

These parks will feature gigawatts of data centre capacity, co-located with new clean energy facilities designed to power them.

Ruth says: “The first phase of the first co-located clean energy project is expected to be operational by 2026 and fully complete in 2027.”

She adds that Google, TPG Rise Climate and other investors are contributing capital to Intersect Power, bolstering this forward-thinking enterprise.

Addressing Grid Challenges and Project Delays

Robert Little, Sustainability Strategy Lead – gTech at Google, draws attention to the critical need for faster deployment of power projects.

“More than four years — that's how long it takes to build power projects in the US, more than double the time it took just 15 years ago," he shares.

“This lag in electricity grid planning, coupled with the urgent need for sustainable solutions, presents a significant challenge to economic growth, especially with AI's potential to add over a trillion dollars annually to US GDP by 2030.”

Ruth adds: “This partnership was motivated by the reality that resources are necessary to capture AI’s extraordinary potential to advance scientific breakthroughs and solve critical challenges in healthcare, education and beyond — and generate economic growth.”

Ruth emphasises the benefits of harnessing the power of AI, sustainability and swiftly. They include:

• Economists estimate the GDP uplift of AI in the US could be in excess of a trillion dollars annually by 2030
• The upside from two additional catalysts for the US economy and job creation: onshoring of manufacturing operations and the electrification of the transport, heating and cooling sectors

Ruth continues: “These profound opportunities require expanding electricity capacity with reliable, secure power sources.

“But to capture the upside, the public and private sector each need to do their part to support the development of job-creating power infrastructure.”

Jim Coulter, Executive Chairman of TPG and Managing Partner of TPG Rise Climate, says: “The convergence of two megatrends – decarbonisation and digitisation – is creating unique opportunities for innovative partnerships.

“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 capitalise on this opportunity, we are committed to delivering carbon-free data centres at lower cost and greater scale.”

Benefits of co-location

Ruth continues exploring the broader impact on America's electric grid, which currently lags in accommodating the rapid economic growth.

She says: "Many regional grids face generation capacity and transmission bottlenecks, leaving them unable to accommodate load increases.

“As a result, for US power projects, the typical time from proposal to construction has more than doubled, from less than two years for projects built in 2000-2007 to more than four years for those built in 2018-2023.”

By constructing new clean energy assets in key regions, Intersect Power aims to align with Google, which will serve as an anchor tenant, offering power offtake that supports data centre development within the industrial parks.

Ruth says: “Once built, this means the Google data centre would come online alongside its own clean power, bringing new generation capacity to the grid to meet our load, reduce time to operation and improve grid reliability.”

Robert adds: “This innovative approach: synchronises clean power generation with data centre growth, ensuring reliable and carbon-free energy for AI; reduces the timeline to operation by bringing data centres online alongside their dedicated power source; minimises the need for new transmission infrastructure by building where power is generated.

“This strategy not only accelerates the transition to a carbon-free future for AI but also helps alleviate grid constraints and improve overall reliability.”

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