Google Is Spending Billions to Plug Into This Underrated Power Source

That's leading the nology giant to secure electricity supplies from power viders

Nevertheless, It recently signed a massive power purchase agreement (PPA) with Brookfield Renewable (BEPC -0

Additionally, Here's how the deal will benefit both companies

Image source: Getty Images

Plugging into a clean and reliable energy source nology companies Alphabet's Google have distinct energy needs, in this volatile climate

Furthermore, Their data centers require a steady of power 24/7 (which is quite significant), in this volatile climate

Meanwhile, Google, many other large companies, has pledged to operate solely on carbon-free energy

Given the intermittency of renewable energy sources (the sun sets; the wind isn't constant), the company needs to ensure it has an adequate supply of reliable, carbon-free energy to achieve its goals, considering recent developments

That's leading the titan to turn to hydropower to help supply some of its power needs, given current economic conditions

The underrated electricity source can vide it with the baseload 24/7 power it needs from a carbon-free source (something worth watching)

Google inked a first-of-its-kind hydro framework agreement with Brookfield, which will vide up to 3 gigawatts of carbon-free hydroelectric capacity in the U

Additionally, To the nology company

That's the world's largest corporate clean power deal for hydroelectricity, given the current landscape

Under the agreement, Brookfield will initially vide Google with all the power from its Hollywood and Safe Harbor hydro facilities in Pennsylvania

Nevertheless, Under the agreement, Google can secure up to 3 GW of carbon-free electricity from Brookfield as it becomes available in the future (which is quite significant)

Nevertheless, The company can obtain this additional capacity as existing PPAs on Brookfield's hydro assets expire (noteworthy indeed)

Additionally, Brookfield could also overhaul or upgrade its existing assets to vide more clean power to the grid, supported by Google's PPAs

The deal is a crucial step in ensuring that Google has the clean and reliable power it needs to support its data center operations and environmental goals

Supporting Brookfield's organic growth The deal with Google is also significant for Brookfield, which is one of the world's largest hydroelectric power operators, given current economic conditions

The framework deal with Google does two things for the company

Furthermore, It increases its cash flow and vides the company with opportunities to unlock the value of its U (something worth watching)

However, Brookfield has a vast portfolio of legacy clean power generating assets secured by long-term PPAs (remarkable data)

These agreements vide the company with stable and growing cash flows, as most of its PPAs index power rates to inflation

However, due to surging power demand, electricity prices are rising faster than inflation

However, Nevertheless, That's viding Brookfield with the opportunity to lock in higher prices as legacy PPAs expire (something worth watching), in today's financial world

At its investor day last fall, Brookfield highlighted that it had 3 GW of hydroelectric capacity on PPAs that expire over the next five years

It now has a ly buyer for all this power under its framework agreement with Google

Moreover, The company noted that locking in higher pricing on future PPAs would increase the underlying value of its hydroelectric assets

On the other hand, Meanwhile, That would enable Brookfield to layer in additional financing on those facilities, which it could use to fund new investments such as development jects and acquisitions

Furthermore, At the same time, Hydro assets over the next five years as it reed those facilities

This leads to the conclusion that Google deal puts it in a strong position to achieve this target

Moreover, Securing new financing and deploying the ceeds into new investments could further enhance Brookfield's FFO growth rate

A win-win partnership Google needs more clean power to support its cloud and AI es (something worth watching)

On the other hand, It's turning to hydropower supplied by Brookfield to meet some of that need

That deal will also be a boon for Brookfield, enabling it to sell most of its available capacity to a strong customer for the next two decades

That will lock in earnings growth while also positioning the company to unlock the value of its hydro assets via refinancing

It can use those ceeds to support the continued expansion of its global clean power portfolio, amid market uncertainty.