Microsoft and Brookfield Sign Largest Clean Energy Deal Ever

(Bloomberg) — Microsoft Corp. and the green energy arm of Brookfield Asset Management have signed the largest corporate clean energy purchase agreement ever announced, as the technology giant increases its investment in artificial intelligence.

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Brookfield Renewable Partners will provide more than 10.5 gigawatts of renewable energy capacity in the U.S. and Europe starting in 2026, according to a statement released Wednesday. This is comparable to around 10 nuclear power plants and reflects the accelerated demand for electricity from data centers and artificial intelligence.

Tech companies are calling for more clean energy to meet their own climate goals at a time when global energy demand is rising.

“It’s absolutely the biggest announcement of a corporate clean energy purchasing agreement ever,” BloombergNEF analyst Kyle Harrison said in a message. “This cements Microsoft as the second largest corporate buyer of clean energy” through power purchase agreements, after Amazon.

It is difficult to estimate the cost of 10.5 gigawatts of new capacity because development costs vary significantly by energy type and location. But if all development consisted of solar farms in the US, they would cost more than $11.5 billion to build, according to BloombergNEF. Building that much wind power in the US would cost almost $17 billion.

Shares of Brookfield Renewable Partners rose as much as 8.5% in New York, the biggest intraday increase since mid-November. Microsoft rose up to 1.6%.

After minimal growth over the past two decades, US energy consumption is expected to expand rapidly in response to demand for the new data centers needed to develop and operate AI, as well as new factories and electric vehicles. Last month, power generator Exelon Corp. predicted a 900% jump in power demand from planned data centers in the Chicago area.

Such a dramatic forecast poses a challenge for technology companies to secure additional energy sources while reducing emissions. Microsoft aims to match all of its electricity consumption with zero-carbon energy purchases by 2030.

Read more: AI’s growing energy use has data centers seeking clean energy

Microsoft is investing billions in developing its AI capabilities and the data centers needed to support them because it sees the technology as a key tool for attracting customers to its cloud computing services.

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Running AI tools is resource-intensive, and many companies do not have the data center capacity to support their own large-scale AI operations. Instead, they are turning to big technology companies like Microsoft, Google and Amazon.com Inc. for help running AI programs in the cloud.

Last week, Microsoft reported a 17% jump in third-quarter revenue to $61.9 billion, thanks to a surge in corporate demand for its cloud and AI offerings. On Tuesday, Amazon’s cloud unit reported its biggest sales growth in a year.

Microsoft and Brookfield said the deal is nearly eight times larger than any other corporate power purchase agreement, and could later be expanded to include new renewable energy capacity in Asia and Latin America.

The deal will focus on wind and solar energy, but will also include “new or impactful carbon-free power generation technologies,” the companies said.

(Updates with stock movement in sixth paragraph. An earlier version corrected the timing of the announcement in the seventh paragraph.)

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