Will Co-locating Renewable Energy with New Data Centers Solve the Power Crunch?: Google, Intersect Power Trying Options
Artificial intelligence, machine learning and connected devices are quickly becoming ingrained in our daily lives, proliferating everything from our smartphones to our household appliances.
While we wonder at the conveniences these technologies provide, the data centers that house the infrastructure behind the modern marvels are facing two significant problems – to keep pace with demand, developers need to build more data centers, and they need more electricity to power them.
A new Google-led partnership could ease some of the pressure. The technology company is joining with clean energy company Intersect Power and global impact investing platform and private equity investor TPG Rise Climate to co-locate high-capacity, low-cost, clean renewable energy power and storage solutions with new data center loads.
“To realize AI’s potential, the growth in electricity demand must be met with new, clean power sources,” said Amanda Peterson Corio, global head of data center energy at Google. “The scale of AI presents an opportunity to completely rethink data center development — by co-locating them where possible with the grid-connected carbon-free energy that keeps them up and running.”
The companies say this novel approach to data center siting and power will create gigawatts of new data center capacity by the end of the decade. Power utilities are struggling to keep up, so data center developers are working to innovate their way around the grid constraints.
“This partnership is an evolution of the way hyperscalers and power providers have previously worked together,” said Sheldon Kimber, CEO and founder of Intersect Power. “We can and are developing innovative solutions to expand data center capacity while reducing the strain on the grid.”
More power
Artificial intelligence training models are notoriously power-hungry, and the country’s aging power system is struggling to keep pace. Data center demand is projected to grow upwards of 21 GW in 2024 and double by 2030, thanks in part to the explosion of artificial intelligence.
With a power crunch looming, data center developers and operators are looking for new, innovative ways to ensure a reliable power supply.
Google, Amazon Web Service and Microsoft recently came to terms with utility AEP Indiana Michigan Power, the Indiana Office of Utility Consumer Counselor, ratepayer advocate Citizens Action Coalition and the Data Center Coalition on a settlement that requires new large load customers to make long-term financial commitments.
Others are looking to nuclear power, hydropower, energy storage systems and microgrids.
“Deep, collaborative partnerships combined with creative problem-solving are the only way that we can meet the explosion of AI growth, as well as society’s accelerating electricity demand,” Kimber said.
Intersect Power will build the clean energy assets at newly developed industrial parks that will feature Google data centers as anchor tenants.
A new approach
In addition to the new partnership, Intersect also announced it had raised more than $800 million in a funding round led by TPG Rise Climate and Google.
“Meeting the energy and computing demands of our next generation economy is necessitating the development of new models and partnerships,” added Jim Coulter, executive chairman of TPG and a managing partner of TPG Rise Climate.
The partnership’s first co-located clean energy project is currently being financed and is expected to be operational in 2026 and complete by 2027.
“By aligning capital, innovation and ambition, we expect this partnership to achieve unprecedented scale at our first co-located project, and we have set ourselves on a course to deliver several more large scale co-located data centers and clean energy power plants across the US,” said Ed Beckley, a managing partner at TPG Rise Climate.
