BlackRock has secured an investment from tech giant Google into one of its renewable energy portfolio companies, as operators of data centres continue to seek clean energy to power their assets.
Google will provide an undisclosed amount of capital to help BlackRock-backed New Green Power build out its planned 1GW solar portfolio.
Under the arrangement, announced earlier this month, NGP will also provide Google with up to 300MW of clean energy to power its data centres, cloud region and offices in Taiwan.
BlackRock co-head of Asia-Pacific climate infrastructure Charlie Reid said the partnership could be a sign of things to come as demand for green power plays an increasing role in digital infrastructure.
The NGP partnership marks the first time that BlackRock has brought a technology company into the capital structure of one of its developers.
“This is an interesting innovation where you have such demand for green power from technology companies – companies that need significant power for their data centres – which are actually starting to provide investment to developers as well,” Reid said.
The BlackRock-Google relationship dates back to 2016, when Google agreed to buy power from the BlackRock-financed 160MW Tellenes wind farm in Norway.
“We’ve spent time building the relationship since then, but we really looked to bring it to a head through a concrete transaction – and this is that transaction.”
Reid said BlackRock aims to work with Google more broadly in the future.
A Google representative said both the Taiwan and Tellenes deals brought new clean energy to their respective grids.
“The Taiwan deal takes it a step further with the investment in NGP expected to catalyse additional critical equity and debt financing from other investors for its pipeline of projects, and gives Google the opportunity to direct some of the clean energy offtake to our suppliers in the region to help them advance their sustainability goals.”
The representative said the 300MW arrangement will “significantly uplift our carbon-free energy percentage in Taiwan”.
By comparison, Google’s last solar deal in Taiwan in 2019 – also the first ever solar PPA in the country – was for just 10MW.
Google aims to run on carbon-free energy in every grid where it operates, while also reducing 50 percent of its 2019-level combined scope 1, 2, and 3 emissions by 2030.
However, in its latest environmental report the company noted that its total emissions last year represented a 48 percent increase compared to the 2019 base level.
“To match our electricity use with [carbon pollution-free electricity] on an hourly basis, we will also need to explore clean energy technologies beyond solar,” the representative said.
Solar focus
BlackRock made its first investment in Taiwan in 2018 when it acquired 28 solar projects with a total capacity of 70MW from J&V Energy.
In 2019, it acquired a further 14 solar projects totalling 115MW capacity from New Green Power and J&V Energy.
Infrastructure Investor understands that BlackRock then acquired a 70 percent stake in New Green Power through its Global Renewable Power Fund III for about NT$6.8 billion ($209.8 million; €193.9 million) in 2020.
Through NGP, BlackRock has built up a pipeline of solar assets, along with some battery storage and investments in electric vehicle charging infrastructure.
Reid said while other global players have focused on opportunities in Taiwan’s offshore wind industry, BlackRock’s primary focus there is solar energy.
“If you look at the scale of the solar market in Taiwan, it really dwarfs the offshore wind market,” he said, pointing to Taiwan’s target of 20GW by 2025 and up to 80GW by 2050.
Meanwhile, Taiwan’s offshore wind targets are 5.7GW by 2025 and up to 55GW by 2050.
NGP currently has about 300MW in operation and a further 100MW under construction.
With a target of 1GW construction-ready by the end of 2025, Reid said the firm has some “very large projects in the pipeline”.
BlackRock views the wider Asia-Pacific region as a major destination for renewable energy investments given its growth trajectory.
The International Energy Agency predicts global data centre electricity consumption could exceed 1000TWh in 2026 – about the same electricity consumption as Japan – and Reid expects about half of that demand to be within APAC.
“This is going to be a multi-gigawatt opportunity across Asia-Pacific,” he said.
