What will Google’s $3 billion deal mean for aging hydropower plants? – Latitude Media

Report on Corporate Hydropower Procurement and its Alignment with Sustainable Development Goals

Executive Summary

A recent 20-year Power Purchase Agreement (PPA) between Google and Brookfield Asset Management represents the world’s largest corporate clean energy deal for hydropower. This agreement, valued at $3 billion for up to 3 gigawatts of electricity, provides a significant financial lifeline to the U.S. hydropower industry and establishes a new model for corporate contributions to the United Nations Sustainable Development Goals (SDGs), particularly in the areas of clean energy, infrastructure, and climate action.

Advancing SDG 7: Affordable and Clean Energy

The agreement directly supports the targets of SDG 7 (Affordable and Clean Energy) by ensuring the continued operation and financial viability of large-scale renewable energy infrastructure. The hydropower sector has faced significant economic pressures, threatening the stability of this carbon-free energy source.

• Deal Specifics: Google will purchase up to 3 GW of carbon-free electricity from two hydropower plants in Pennsylvania.
• Industry Context: The deal arrives as the hydropower industry confronts substantial challenges, including competition from cheap natural gas and the high costs associated with relicensing.
• Impact: This investment helps maintain existing clean energy capacity, contributing to a resilient and diverse renewable energy mix, which is a core objective of SDG 7.

Strengthening SDG 9: Industry, Innovation, and Infrastructure

This partnership serves as a critical investment in resilient infrastructure, a key component of SDG 9 (Industry, Innovation, and Infrastructure). By committing to a long-term PPA, Google is underwriting the modernization and maintenance of crucial energy assets that may have otherwise been decommissioned.

1. Relicensing Crisis: Nearly one-quarter of U.S. hydroelectric stations are approaching a costly and lengthy relicensing process, with approximately 17 GW of capacity at risk.
2. Preventing Decommissioning: In recent years, upwards of 60 hydroelectric plants have surrendered their licenses, highlighting the urgent need for new financial models to preserve this infrastructure.
3. Innovative Financial Model: The scale of this PPA establishes an innovative precedent for private sector financing to sustain and upgrade critical public infrastructure, aligning corporate growth with national infrastructure goals.

Contributions to Climate Action and Sustainable Communities (SDG 13 & SDG 11)

The agreement is a significant corporate action toward SDG 13 (Climate Action) by securing a massive supply of zero-emission electricity to power energy-intensive data centers. Furthermore, it enhances grid stability, which is foundational to SDG 11 (Sustainable Cities and Communities).

• Grid Stability: Hydropower provides dispatchable, baseload power that complements intermittent renewable sources like wind and solar, strengthening the grid and enabling a deeper penetration of renewables.
• Water Management Synergy: The deal highlights a potential synergy related to SDG 6 (Clean Water and Sanitation), as water from hydropower facilities can be used for sustainable data center cooling, addressing a growing environmental concern.

A Framework for SDG 17: Partnerships for the Goals

The Google-Brookfield agreement exemplifies SDG 17 (Partnerships for the Goals), showcasing a powerful collaboration between the technology and energy sectors to achieve shared sustainability objectives. It moves beyond smaller, previous agreements and sets a new standard for corporate environmental responsibility.

• Previous Benchmark: A 2023 PPA between Iron Mountain and Rye Development for 150 MW of hydropower was a notable step, but the Google deal is 20 times larger in volume.
• A Replicable Model: Experts view this PPA as a potential blueprint for future deals, coupling patient customers with a high willingness to pay for reliable, clean power. This model can be replicated to ensure the long-term viability of the global existing hydropower fleet and accelerate progress on the SDGs.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses several issues that connect to a range of Sustainable Development Goals. The primary focus on a large-scale hydropower deal directly links to goals concerning energy, infrastructure, and climate action. The secondary themes of water usage and partnerships also bring other goals into scope.

1. SDG 7: Affordable and Clean Energy
   • The entire article is centered on a major clean energy deal. It describes hydropower as “carbon-free electricity” and a “proven, low-cost technology,” which directly aligns with the goal of ensuring access to affordable, reliable, sustainable, and modern energy for all.
2. SDG 9: Industry, Innovation, and Infrastructure
   • The article highlights the challenges facing U.S. hydroelectric infrastructure, noting that “nearly one-quarter of U.S. hydroelectric stations are coming up for relicensing” and that facilities are closing. The Google deal is presented as a “lifeline” that supports the maintenance and viability of this “dependable” infrastructure. It also touches on the infrastructure needs of the tech industry (data centers).
3. SDG 13: Climate Action
   • By focusing on hydropower as a “carbon-free” energy source that complements other renewables like wind and solar, the article addresses the core of climate action: transitioning away from fossil fuels to mitigate climate change. The deal is a significant corporate action to secure clean energy and reduce carbon footprint.
4. SDG 6: Clean Water and Sanitation
   • The article explicitly mentions the connection between energy and water. It notes that hydropower offers a potential advantage where “the water can be diverted to quench data centers’ thirst for ambient cooling.” It also references a negative case where a data center’s water usage led to a community’s wells running dry, highlighting the importance of sustainable water management.
5. SDG 17: Partnerships for the Goals
   • The deal itself—a “20-year power purchase agreement” between Google and Brookfield Asset Management—is a prime example of a private-sector partnership to achieve sustainability objectives. The article suggests this deal could be a “model for future deals,” emphasizing the role of such collaborations in advancing clean energy.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, several specific SDG targets can be identified:

1. Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • The article details a deal for “up to 3 gigawatts of electricity” from hydropower, a renewable source. This directly contributes to increasing the proportion of renewable energy consumed by a major corporation, reflecting the aim of this target.
2. Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.
   • The discussion about the relicensing crisis, where “17 GW of hydropower generation is up for relicensing,” and the risk of facilities closing, directly relates to the need to maintain and develop resilient energy infrastructure. The Google deal is framed as a “massive boost for hydro” that helps “maintain the existing fleet.”
3. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies…
   • The article discusses the need to keep the existing hydropower fleet operational through new financial models like the Google PPA. This is a form of retrofitting the industry’s business model to make the underlying clean technology infrastructure sustainable for the long term.
4. Target 6.4: By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater…
   • The article points to the high water consumption of data centers (“data centers’ thirst for ambient cooling”) and the negative consequence of unsustainable water use (“a community’s wells ran dry”). This directly connects to the need for greater water-use efficiency in the technology industry.
5. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships…
   • The agreement between Google and Brookfield Asset Management is presented as a landmark private-private partnership. The article notes it “sets a different standard” and “could be a model for future deals,” directly aligning with the goal of promoting effective partnerships to achieve sustainable development.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article provides several quantitative and qualitative indicators that can be used to measure progress:

1. For SDG 7 (Clean Energy):
   • Amount of renewable energy capacity: The article specifies the deal is for “up to 3 gigawatts of electricity.” It also mentions the total national fleet size (“100 GW”) and the portion at risk (“17 GW”). These figures are direct measures of renewable energy capacity.
2. For SDG 9 (Infrastructure):
   • Investment in sustainable infrastructure: The deal is valued at “$3 billion,” a clear financial indicator of investment in maintaining and supporting clean energy infrastructure.
   • Number of operational facilities: The article mentions that “Upward of 60 hydroelectric plants have surrendered licenses in recent years.” A reduction in this number would indicate progress in maintaining resilient infrastructure.
3. For SDG 6 (Water):
   • Water consumption by industry: While no specific numbers are given, the reference to “data centers’ thirst for ambient cooling” and wells running dry implies that the volume of water used by data centers is a key indicator for measuring water-use efficiency.
4. For SDG 17 (Partnerships):
   • Value and scale of partnerships: The article details the specifics of the partnership: a “$3 billion” value and a “20-year power purchase agreement.” These metrics indicate the magnitude and commitment of the partnership.
   • Number of partnerships: The quote “I was expecting more of these deals earlier” implies that the frequency and number of such large-scale agreements are an indicator of progress.

4. Summary Table of SDGs, Targets, and Indicators

Source: latitudemedia.com