Amazon, Apple, Google, Meta and Microsoft are among the major tech companies known as hyperscalers that rely heavily on datacenters as part of their core business. As a result of the enormous energy demand from datacenters, along with commitments to be 100% renewable, these five companies alone account for over 45 GW of corporate renewable purchases worldwide — over half of the global corporate renewables market.[1]
Virginia, specifically the northern part, remains the datacenter hub, not just in the U.S., but the world. Combined with the massive operating fleet of datacenters, planned facilities would push energy demand from datacenters alone to nearly 9 GW in Virginia. Dozens of other markets are emerging as focal points for datacenter development, including Texas, Ohio, Arizona, Iowa, Washington and the Southeast. Corporate renewable purchases and utility-led renewable procurement programs have increased in activity in response to these growing datacenter markets.
The renewable energy team at this large energy company is charged with implementing a strategy to penetrate the U.S. power market more aggressively. Given the size and growth of datacenters, the team needed insights into this segment of the market to make informed decisions about where to place new plants and at what price point for development or acquisition.
Pain Points
Members of the renewable development team lacked a clear view on the demand side of the U.S. power market, especially for datacenters. They were also spending many hours combing the Internet for potential locations for new sites and paying consultants to do valuation models. Any information that was available came from unstructured, disparate sources requiring substantial time to collate and analyze. They knew there was a better way to handle these activities and wanted to identify an information provider that could help:
- Assess current and future datacenter demand for renewable energy.
- Understand co-location facilities.
- Prospect for potential new build sites and evaluate the value these plants could bring to the company.
- Get a handle on current and potential future energy prices.
The team was familiar with S&P Global Market Intelligence ("Market Intelligence") and reached out to learn about its capabilities in this area.
The Solution
Specialists from Market Intelligence discussed 451 Research Datacenter KnowledgeBase that can help determine power demand in critical datacenter regions and make well-informed trading decisions.
To have an accurate view of energy usage, detailed information on the demand side of the power market was also required. S&P Capital IQ Pro was introduced to enable the team to value, originate and benchmark U.S. power plant projects. The Power Forecast service on S&P Capital IQ Pro offers 20-year power price and renewable energy credit forecasts to help understand the demand and supply fundamentals across U.S. power markets and forward prices. The specialists also discussed Power Evaluator, a cutting-edge valuation suite on S&P Capital IQ Pro that helps deliver reliable, lightning-fast valuations on U.S. power plants by leveraging machine-learning-powered nodal forecasts to accurately project power prices. Together, these services would enable the renewable development team to:
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Determine power demand in datacenter regions through energy consumption data |
The Datacenter KnowledgeBase provides details on 10,000+ colocation and wholesale datacenter facilities across North America, EMEA, Asia-Pacific and Latin America. It covers 100+ data points per facility, including location, facility type, services provided, capacity and current utilization. This client would receive North America colocation facility metrics from 2017 – 2028, along with “best efforts” data for the hyperscale facilities in the top five use markets. The historical datacenter power consumption metrics can identify changes to energy consumption and how it would evolve in the future to assess potential opportunities. |
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Evaluate the renewable energy landscape in datacenter regions and identify new projects and project sites | S&P Capital IQ Pro integrates best-in-class U.S. power sector data, electricity price forecasting and energy market and regulatory research on a single platform to:
Use interactive mapping and embed overlapping utility, power transmission and other infrastructure layers to quickly visualize the competitive landscape. |
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Understand forward power prices of power markets and power plants to make well-informed investment decisions |
Power price forecasts on S&P Capital IQ Pro enable clients to value assets with 20-year power-forward curves projecting electricity prices and renewable energy credit (REC) forecasts drilled down to the hourly level, supported with research insights. |
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Conduct quick, reliable valuations for project finance execution |
Power Evaluator is a cutting-edge valuation suite on S&P Capital IQ Pro that integrates with best-in-class asset-level data, 40,000+ machine-learning-powered nodal forecasts and physical risk metrics to deliver reliable, lightning-fast valuations. Built with multiple power forecasting scenarios and adjustable financial assumptions, the completely customizable valuation suite unlocks the true value of power plant investments from start to finish. Clients can:
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Members of the renewable development team appreciated the depth and breadth of the services that were presented and subscribed to all that were discussed. They felt this would help support critical decision-making regarding the number and location of new plants to support the market penetration strategy for datacenters and are benefitting from having:
- A systematic and quantitatively based approach for understanding the demand side of the equation for renewable energy at datacenters with energy consumption data.
- Important insights into datacenters, including capacity and co-location facility metrics and best-efforts data on hyperscale facilities in important regions of the country.
- The analytical tools needed to quickly understand the power market dynamics of datacenter regions, evaluate power plant projects and identify new projects for investment.
- A valuation tool leveraging machine-learning-powered nodal forecasts to conduct reliable and speedy power plant assessments.
- A refreshed view of every trailing quarter with energy consumption data and templates to help ingest new data for the analysis.
- The ability to avoid paying for external consultants to screen for power projects and run valuation models.
The project is ongoing and will involve regular check-ins by Market Intelligence specialists to evaluate the progress of data implementation and address any questions about the services and results.