Brookfield Renewable Partners LP, a key player in the renewable energy sector, is strategically positioning itself to cater to the increasing demand for electricity from data centers. By leveraging its robust development pipeline and acquisition strategy, the renewable energy giant is empowering itself to offer comprehensive supply solutions to data center clients requiring continuous power.
Data centers, known for their high energy consumption, are expected to undergo significant expansion to meet the escalating needs driven by the artificial intelligence boom. Industry reports indicate that the demand for AI power is projected to grow at an annual rate of 70% through 2027. Estimates also suggest that by 2030, data centers’ power usage could surge by up to 13%, contributing to a predicted 6% share of global carbon emissions by the same year.
In response to this surge in demand, power companies, particularly those under regulatory frameworks, are heavily investing in renewable energy initiatives. Brookfield’s Renewable Power & Transition arm, managing $102 billion in assets and overseeing 7,000+ power facilities, stands out as one of the world’s largest investors in renewable and climate transition assets. With a power generation capacity of 33,000 megawatts, the company operates across five continents, offering a diverse portfolio of solar, wind, hydro, and sustainable solutions.
Brookfield Renewable’s parent company, Brookfield Asset Management, is set to develop over 10.5 GW of new renewable energy capacity globally in the next five years to meet the increasing energy demands worldwide. Partnering with tech giant Microsoft Corp., Brookfield has already secured contracts for 5.7 GW of US renewables capacity, with additional agreements for over 4,012.6 MW of capacity for data center use. Other industry leaders like Google and Amazon are also committing to reducing their emissions.
The recent framework agreement with Microsoft outlines the provision of renewable energy by Brookfield Renewable, starting in the US and Europe between 2026 and 2030. Following this announcement, Brookfield Renewable’s stock surged by 17% to close at $24.66 on May 2. In the first quarter of 2024, the company’s funds from operations reached $296 million, or 45 cents per unit, representing a slight increase compared to the prior-year period.
CEO Connor Teskey emphasized that a significant portion of the renewable energy capacity will be focused in the U.S., where Brookfield Renewable has acquired development pipelines from various companies. Teskey projected that by 2026 to 2030, the company could potentially generate well over 10 GW of renewable energy annually, highlighting the strong visibility on future demand and the company’s ability to scale up its operations.
As the U.S. and Canada witness a growth in renewable energy generation, Brookfield Renewable’s extensive portfolio and partnerships with industry giants like Microsoft underscore its crucial role in providing sustainable solutions to meet the evolving energy demands of the digital age. In March, both countries saw an expansion in generating capacity by 450 MW, with the majority coming from wind energy. Notably, there were no plant retirements during the month, and several new power plant units were announced, with solar energy leading the way.
Among the completed projects, the 190-MW Paintearth Wind Project in Alberta, under a 15-year power supply contract with Microsoft, and the 132-MW South Fork Offshore Wind Project off the coast of Long Island, NY, stand out. In addition, newly tracked projects like the 445-MW gas-powered Ripley Energy Center Plant facility in Oklahoma and the proposed 374-MW Solace Solar Project in Texas highlight the ongoing efforts to meet the surging power needs of data centers in the era of AI advancement.
