This article was published by The Energy Mix on May 3, 2024.
By The Energy Mix staff
Toronto-based Brookfield Asset Management will deliver 10.5 gigawatts of new renewable energy capacity to help power tech giant Microsoft’s data centres in the United States and Europe, in what news reports describe as the biggest-ever corporate renewables procurement by far.
The estimated US$11.5-billion power purchase agreement “underscores the race to meet clean energy commitments while satisfying the voracious power demands of cloud computing and artificial intelligence,” the Financial Times reports.
“It is absolutely the largest single announcement for a corporate clean power purchase agreement (PPA) ever,” BloombergNEF analyst Kyle Harrison told PV Magazine. “It cements Microsoft as the second-largest corporate buyer of clean energy through PPAs, after Amazon.”
For Brookfield, “the agreement reduces the risks inherent in a huge pipeline of renewable energy projects, which are underpinned by a combined US$25-billion the asset manager has raised so far through two transition funds launched by its renewables unit,” the Globe and Mail writes. “As Brookfield builds out wind and solar energy projects, it can do so knowing it has a reliable customer in Microsoft.”
From Microsoft’s point of view, the “global framework agreement”, as the deal has been styled, “means more dependable access to a growing supply of clean energy, as demand for data and computing power explodes in the race to build ever more powerful AI models and move more businesses to cloud computing platforms,” the Globe adds. PV Mag says data centres and AI are rapidly driving up U.S. electricity demand, with one Chicago-area utility looking ahead to a 900% increase.
That growth “has raised alarm from energy watchdogs over whether antiquated power grids can meet the surge in consumption without slowing the move to renewables or posing a threat to reliability,” the Times adds.
Brookfield said the procurement is about eight times larger than the previous record, a PPA between a solar farm in Australia and mining giant Rio Tinto. “The companies said the agreement will focus largely on solar and wind generation but will also include ‘new or impactful carbon-free energy generation technologies’,” PV Magazine states.
Microsoft is also setting out to reduce power demand by installing liquid immersion cooling and grid-interactive uninterrupted power supply (UPS) batteries at its data centres, the industry publication adds.
“Though many of the agreement’s details have yet to be outlined, it is a major signal of intent from one of the world’s foremost technology companies and one of its largest asset managers,” the Globe says. “It could account for about 30% of Brookfield’s renewable energy capacity growth between 2026 and 2030,” with the company’s investments in Spain, Colorado, and Virginia all expected to contribute.
“As the global trend of digitalization and the adoption of AI continues to drive growth in demand for electricity,” the Microsoft deal “is a testament to our ability to reliably deliver clean power solutions at scale to our corporate partners and accelerate the energy transition,” said Brookfield President Connor Teskey, who also serves as CEO of its renewable energy division.
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