Shares of AES Corporation (NYSE:AES) rose 2% on Tuesday after the company disclosed a set of agreements with Google to provide on-site power and energy services for a new data center in Wilbarger County, Texas.
The transaction framework includes 20-year Power Purchase Agreements (PPAs) that cover co-located power generation adjacent to Google’s planned campus. Under the terms, AES will own and operate the generation assets supplying that capacity.
In addition to the PPAs, AES will deliver retail services, cost optimization and related offerings to Google under a long-term energy management agreement tied to the data center campus. The company said it has secured both the land and the necessary interconnection agreements and will construct the shared electrical infrastructure for the co-located facility.
By providing "powered land and energy," AES said it will enable Google to expand its operations at the site. Andrés Gluski, AES President and CEO, commented that the expanded partnership with Google illustrates AES’s ability to accelerate data center development by delivering powered land and energy at scale.
The company highlighted the scale of its engagements with data center customers, noting it has signed agreements for nearly 12 gigawatts of energy with such clients; roughly 9 gigawatts of that total are PPAs signed directly with hyperscalers, according to AES.
From Google’s side, Amanda Peterson Corio, Global Head of Data Center Energy, said the collaboration brings new clean generation online directly alongside the data center to reduce local grid impact and help preserve energy affordability. The planned facility will employ advanced air-cooling technology to eliminate operational water use.
Separately, AES referenced industry recognition in noting that BloombergNEF’s Corporate Energy Market Outlook ranked the company as the leading clean energy provider for U.S. corporations over the last five years.
Key points
- AES announced 20-year PPAs and will own and operate generation assets co-located with Google’s Wilbarger County data center.
- The company will supply powered land, construct shared electricity infrastructure, and provide long-term energy management and cost optimization services.
- AES has nearly 12 GW of agreements with data center customers, with approximately 9 GW of PPAs directly tied to hyperscalers; the project incorporates air-cooling to remove operational water use.
Risks and uncertainties
- Execution risk in constructing the shared electricity infrastructure and integrating generation assets with the data center campus - this affects the utilities and construction sectors.
- Long-term contract exposure - 20-year PPAs and extended energy management agreements can leave both parties sensitive to changes in future energy markets and costs.
- Concentration risk from a large portion of AES’s signed capacity being with hyperscalers (about 9 GW of 12 GW), which could influence revenue stability if demand dynamics with these customers change.
Impacted sectors: Energy and utilities, data center and cloud infrastructure, corporate renewables procurement.