Google Invests in BlackRock’s New Green Power to Boost Taiwan’s Solar Capacity • Carbon Credits

Google has partnered strategically with BlackRock to develop a 1GW solar energy pipeline in Taiwan. In this collaboration, Google will make a significant capital investment in New Green Power, a leading solar developer in Taiwan, owned 100% by a fund managed by BlackRock’s Climate Infrastructure business. This move aims to boost energy capacity and cut carbon emissions, especially as the demand for AI continues to rise.

A Cool Deal for Hot Energy in Data Centers

The press release notes that Taiwan is the prime hub for Google’s cloud technology with data centers and offices. Certainly, the energy demand is insane for these data centers. However, the country still relies on fossil fuels for ~ 85% of its power generation. Thus, this deal promises to meet the electricity needs of Google’s operations in Taiwan. It further aligns with its 24*7 carbon-free electricity (CFE) demand round the clock in all regions it operates.

Subsequently, Amanda Peterson Corio, Google’s Global Head of Data Center Energy highlighted,

“We’re aiming to achieve net-zero emissions across our operations and value chain, supported by a goal to run on 24/7 carbon-free energy everywhere we operate. The path to achieving these goals is challenging, and requires both commercial efforts and broader energy systems change. We’re excited to partner with BlackRock and New Green Power to advance the build out of clean energy on Taiwan’s electricity grid.”

source: Google

In this deal, Google has taken a stake in New Green Power to buy nearly 300 megawatts of renewable energy from BlackRock. It will be purchased through power purchase agreements (PPAs) and Taiwan Renewable Energy Certificates (T-RECS). Google and BlackRock did not disclose the size of their equity stake in NGP.

• However, Amanda mentioned that the investment is expected to drive both equity and debt financing for the development of NGP’s 1-gigawatt solar pipeline.

David Giordano, Global Head of Climate Infrastructure at BlackRock noted,

“As we witness growth in demand for digital services, powered by AI and data-centric technologies, it becomes imperative to invest in the infrastructure that not only supports this growth but also aligns with our strategy to invest in clean energy. This partnership is a testament to our shared commitment to driving the transition to a low-carbon economy.”

Mutual Gains with Robust Solar Capacity

Google plans to extend this clean energy capacity to its semiconductor suppliers and manufacturers. The semiconductor industry is a significant emissions hotspot due to energy-intensive chip manufacturing and operation. This deal directly supports Google’s clean energy objectives and would reduce Scope 3 supply chain emissions. The new solar capacity will directly power Google’s data centers and cloud region in Taiwan. It will also offer clean energy choices to nearby chip suppliers and manufacturers.

In 2023, Google’s Scope 3 emissions totaled ~10.8 mtCO2e, accounting for 75% of its overall carbon footprint. Some of these emissions significantly come from upgrading data center infrastructure and AI initiatives. Google has stated that reducing Scope 3 emissions depends on diverse suppliers across countries with varying clean energy access, posing greater challenges in the Asia-Pacific region.

Since last year Google has been investing continuously in their prime manufacturing hubs to achieve their goal of 5 GW of CFE. The tech giant aims to secure clean energy availability across its supply chain through this energy target.

New Green Power (NGP), headquartered in Taipei, is a prominent solar developer and EPC firm. It finances, builds, owns, and operates solar projects in Taiwan and Japan. It has efficiently built and managed more than 500 MW of domestic projects. These include the largest inland floating project (approximately 35 MW) and rooftop projects (around 15 MW) in Taiwan, alongside multiple utility-scale ground-mounted projects in southern Taiwan. With its strong local and international experience, NGP is taking charge of the renewable energy transformation in the region.

Speaking of the investment, it would foster Taiwan’s renewable energy grid and assist Google in achieving net-zero emissions throughout its operations and value chain by 2030.

BlackRock’s Role in Taiwan’s Energy Revolution

BlackRock’s Infrastructure Equity platform oversees over US$39B in client assets as of March 31, 2024, spanning its Climate and Diversified Infrastructure franchises. The largest asset manager company offers global investment opportunities and tailored solutions across energy sectors and asset classes. Furthermore, it leverages the significant investment potential of the energy transition valued at over US$100 trillion.

Ross Mackey, Portfolio Manager, Climate Infrastructure at BlackRock said:

“This is a pivotal moment for energy infrastructure in Taiwan. BlackRock’s Climate Infrastructure business is a leading investor in Taiwan’s solar industry and we are delighted to partner with Google to provide a scalable and sustainable energy solution for their operations in Taiwan.”

Similarly, Singapore is advocating for green data centers to manage the increasing energy demands of AI. It aims to provide at least 300 MW of additional capacity through green energy initiatives in the coming years.

This partnership represents a significant step towards sustainable energy solutions in the tech industry, promising a greener future for data centers and digital services in Taiwan.

Addressing Taiwan’s Energy Challenge

Taiwan leads global semiconductor production, producing nearly 60% of the world’s chips and a significant portion of advanced AI processors. However, the country heavily depends on non-renewable energy sources to sustain its industrial output.

About 97% of Taiwan’s energy comes from coal and natural gas, underscoring the urgency to shift towards renewable sources. This is the reason behind the country’s strive towards sustainable digital growth.

• Taiwan aims to reach 20GW of solar capacity by 2025 and up to 80GW by 2050 to achieve its net zero goals.

Taiwan’s renewable energy future looks sunny with rapidly expanding solar developers like NGP, supported by strong partners such as BlackRock and Google. Undoubtedly, it’s a significant step towards sustainable energy solutions in data centers, digital services, and the entire tech industry.