Clearway Energy, Inc. (NYSE:CWEN) announced a significant expansion of its renewable energy portfolio through new long-term power purchase agreements (PPAs) with Alphabet Inc.’s Google, targeted for execution in 2025. The agreements encompass three separate carbon-free energy projects, collectively amounting to 1.17 gigawatts, situated in Missouri, Texas, and West Virginia. These projects represent a capital investment exceeding $2.4 billion dedicated to advancing clean energy infrastructure supporting Google’s data center operations.
Under the terms of these contracts, Clearway Energy will deliver carbon-free electricity to regional grids serving Google’s data centers, specifically within the Southwest Power Pool (SPP), Electric Reliability Council of Texas (ERCOT), and the Pennsylvania-New Jersey-Maryland Interconnection (PJM) grids. The PPAs extend up to 20 years, reinforcing a long-term supply commitment between the two companies.
Clearway is poised to commence construction on over 1 gigawatt of capacity during the current year. The first projects from this initiative are expected to become operational in the years 2027 and 2028. This development marks an expansion of Clearway’s existing collaboration with Google, elevating the total contracted renewable capacity under their partnership to approximately 1.24 gigawatts.
The announcement follows Clearway Energy’s recent capital market activity, where its subsidiary completed an upsized debt offering. Initially targeting $500 million, the company ultimately priced $600 million in senior notes bearing a 5.750% coupon and maturing in 2034 at par value. This infusion of capital is likely intended to support the construction phases of the newly contracted projects.
Financial performance released in November provides additional context to Clearway’s operational strength. The company reported a net income of $60 million for the third quarter, alongside an adjusted EBITDA of $385 million, operating cash flow amounting to $225 million, and cash available for distribution (CAFD) of $166 million.
Following these developments, Clearway Energy’s shares closed higher, trading at $34.67, up 4.63% on the reporting day, reflecting market acknowledgment of the company’s growth and strategic progress.
Key Points:
- Clearway Energy secured three long-term PPAs with Google totaling 1.17 GW of carbon-free power projects across Missouri, Texas, and West Virginia.
- The agreements, valued at more than $2.4 billion, span up to 20 years, supplying energy to regional grids supporting Google’s data centers in SPP, ERCOT, and PJM.
- Construction on over 1 GW of renewable energy capacity will begin within the current year, with initial projects expected to be operational by 2027 and 2028.
- Clearway’s partnership with Google now extends to a total contracted capacity of 1.24 GW, reflecting an increase from prior agreements.
- The company’s subsidiary recently completed a $600 million upsized senior note offering at 5.750% coupon, maturing in 2034, indicating enhanced capital resources for project investments.
- Financial results for Q3 include $60 million in net income, $385 million adjusted EBITDA, $225 million operating cash flow, and $166 million CAFD, supporting the company’s financial stability.
- The timeline for construction and commissioning of over 1 GW of renewable projects depends on various factors that could affect start and completion dates.
- Changes in regional grid regulations or market conditions in SPP, ERCOT, and PJM could impact project operation or contract performance.
- Interest rate fluctuations may influence the cost of servicing the $600 million senior notes issued for financing these projects.
- Operational risks inherent to large-scale infrastructure projects—such as permitting, construction delays, or unforeseen technical challenges—could affect expected outcomes.