An $800 million funding round for US-based IPP Intersect Power will see Google take an equity stake in the company alongside other infrastructure funds as part of what the tech giant described as “a new approach to data centre siting and power”.
Google joins existing institutional shareholders TPG Rise Climate, Climate Adaptive Infrastructure and Greenbelt Capital Partners in the funding round, although the split between the quartet is undisclosed.
CAI and Greenbelt – then under its Trilantic Energy banner – initially invested in Intersect in 2020, before TPG joined the base in 2022, with further commitments from the original duo, as part of a $750 million funding package.
The new partnership with Google will see Intersect catalyse a targeted $20 billion investment by the end of the decade, with projects to be co-located with Google’s data centres. Intersect said in a statement it has already begun financing the partnership’s first co-located project, expected to be operational in 2026 and fully complete by 2027.
It is the second time this year Google has sought to take an equity stake in a renewable energy developer, investing in July in the BlackRock-backed Taiwanese group New Green Power.
“The tri-party partnership brings a new approach that can enable US leadership in AI development, while thoughtfully building data centre load next to new additional power generation where possible – reducing both the timeline to operation and the amount of new transmission required,” Ruth Porat, president and chief investment officer of parent company Alphabet and Google, said in a statement.
“There is a fundamental recognition on Google’s part that change is coming and I think we’ve spent quite some time with the Google team talking about this change,” Bill Green, managing partner at CAI, told Infrastructure Investor. “In addition to the obvious economic benefit of investing in this company, the equity investment is predicated on the fact this set of projects is going to come into existence very quickly. That is one of the hallmarks of this first phase of the Google-Intersect partnership. Because of the speed of delivery, the additional equity is important to the company.”
‘Certainty of delivery’
Green said the scale of Intersect’s projects is one reason why it can claim a speed of delivery through the US’s notorious interconnection queues, which stood at 2.6TW at the end of last year. Intersect’s portfolio includes the 639MW and 1GWh Oberon solar-plus storage site, as well as the 828MW/640MWh Lumina project and the 415MW/320MWh Radian project. Oberon is based in California, while the latter two are in Texas.
“When you have projects that size, you end up with a certain control over land, interconnection and utility relationships that are quite different from smaller projects,” explained Green.
He added: “Intersect and CAI made a decision when we bought the company from SoftBank that we would focus on domestic content, well before there was any conversation around economic incentives to do so. As a result of the company becoming a leader in the procurement of domestic content and is now one of, if not the single largest owner of domestic content modules, the company can move very quickly to put projects in the ground without regard to some of the supply chain issues that have plagued some of their competitors. I believe it’s been a key part of the reason why Google and others have been so attracted to Intersect. It’s the certainty of delivery.”
Indeed, pressure for US solar projects to contain domestic content increased last week when the Biden administration doubled tariffs on Chinese solar wafers and polysilicon from 25 percent to 50 percent, while President-elect Donald Trump has also promised increased tariffs on Chinese content.
Google’s Porat said that to address grid constraints, the partnership will deliver energy that is “purpose-built and right-sized for the data centre”. She said that when Intersect has projects in regions of interest, Google will be able to provide power offtake as an anchor tenant in the co-located site, meaning the data centre would come online alongside its own power.
“Projects through this agreement will serve grid through grid connection and initially, the co-located data centres built for Google. Over time, I would expect other tenants to take advantage of this behind the meter thesis of co-location,” Green maintained.
However, Green is also looking beyond Google and data centres in a bid to replicate this arrangement elsewhere in the US.
“We see this as the first step in what feels inevitable to us in this new behind-the-meter conversation,” he said. “When you see the scale of this, we can see this type of arrangement serving all other forms of high-demand, high-load industries, such as steel, glass, controlled environment agriculture. All of these utilise significant amounts of energy that can be powered through renewables. Intersect is uniquely well-positioned for this, as it is currently in late-stage development or early-stage construction on over 4GW of large projects, any one of which could easily replicate this approach for other partners.”
Intersect owns a total portfolio of 2.2GW of operating solar and 2.4 GWh of battery storage in operation or construction, while it will begin construction on 4GW of solar and 10GWh of storage next year.
