Google (GOOGL.US) and New Era Energy (NEE.US) join hands with supporting large-scale power plants to bind data centers

The Zhitong Finance App learned that Google Cloud Computing Platform (Google Cloud), a subsidiary of US tech giant Google (GOOGL.US), and US electricity supply giant New Era Energy (NEE.US) have reached a major agreement. The two sides will jointly develop AI data centers that are 100% directly supported by large-scale power plants. This is the latest example of the increasingly close intertwining of the technology industry and the power industry.

According to a recent statement released on Monday, the two companies are developing three large campuses and working to identify additional potential large power plant/supporting data center sites. In October of this year, they announced an agreement to restart a large NexTERA nuclear power plant in Iowa that has been dormant for a long time to supply power to a large AI data center that Google is building nearby.

The massive amount of electricity required for data centers and artificial intelligence has reshaped the US electricity industry, driving it to forge closer ties with the technology industry.

New Era Energy also said on Monday that it has signed a clean energy contract with Facebook parent company Meta Platforms Inc. (META.US) for about 2.5 gigawatts. One gigawatt is roughly equivalent to the power generated by a large nuclear reactor, which can supply electricity to approximately 750,000 homes in the United States.

Thanks to a major power supply agreement with Google and Meta, New Era Energy's stock price rose by about 4% before regular trading in the US stock market began. By the close of last week's US stock market, New Era Energy had a market capitalization of 173 billion US dollars, and its stock price has increased by 20% since this year.

New Era Energy Company (NextEra Energy) is an American giant with a dual core of “electric utilities + clean energy development”. The company manages traditional power supply and develops large-scale new energy projects such as wind power, photovoltaics, and energy storage. New Era Energy supplies electricity to approximately 12 million residents and businesses in Florida through its subsidiary Florida Power & Light (FPL), and is one of the largest regulated power utility companies in the US; in terms of clean energy and power infrastructure development, through NextEra Energy Resources (NEER), it develops, constructs, and operates various unregulated and competitive large-scale power plants and grid infrastructure across the US and Canada, focusing on the types of electricity supply including wind power, photovoltaics ( One of the world's leading wind and solar power generation), large-scale battery energy storage, and some natural gas, electric nuclear power units, etc.

NextEra Energy Resources (NEER), a subsidiary of New Era Energy, is not a regulated utility company like Florida Power & Light, but an “unregulated, competitive” power development and wholesale supplier, focusing on clean energy projects such as wind power, photovoltaics, energy storage, and nuclear power, and signing long-term power agreements (PPAs) with major customers such as Google and Meta.

Currently, the power agreements between US tech giants and energy companies such as NextEra can be described as “exclusive” in terms of contracts, or even restarting a separate nuclear power plant for their own use; however, in terms of physical power supply, the vast majority of projects are still connected to traditional power grids and realized through physical PPA, virtual PPA, or “co-location+grid connection”.

However, since this year, more and more tech giants have begun to look for “large-scale projects that are truly completely disconnected from the big grid and are supplied separately.” The US Department of Energy and FERC have even recently specifically promoted the new “load+power generation co-location connection” rule to give this “data center has its own large superpower plant, but is still connected to the big grid” model to give the green light to regulation and speed up grid connection.

The essence of the global AI competition is an AI computing power infrastructure competition, and the core foundation that drives AI computing power clusters is a stable and huge power supply system. Because of this, the demand for electricity in AI data centers is surging at an unprecedented rate, and AI seems to have become a “power devil.” The core foundation behind high-energy AI data centers, which are expanding exponentially in scale due to intense demand for computing power infrastructure such as AI chips, is inseparable from the core foundation of electricity supply. This is also the origin of the market view that “the end of AI is electricity.”

Wall Street financial giant Goldman Sachs recently revised its forecast of huge electricity consumption by 2030 driven by global data centers to a 175% increase in electricity consumption compared to 2023 (Goldman Sachs's previous forecast was +165%), which is equivalent to increasing the power resource load of one of the “world's top ten power consumers.” According to Goldman Sachs's team of strategy analysts, the end of the AI model is electricity — the agency emphasizes that AI, which can be called the “beast that swallows electricity,” will bring about an unprecedented “super bull market” for electricity.