Exclusive: UAE, U.S. partnership to invest to power data centers
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The Abu Dhabi-based wealth fund ADQ and U.S. heavyweight Energy Capital Partners aim to invest over $25 billion in projects to power data centers and other industrial consumers.
Why it matters: Their new U.S.-focused, 50-50 partnership unveiled Wednesday is stark evidence that AI's voracious power demand is attracting fresh capital as the nation's electricity needs rise.
Driving the news: A major goal is new, gas-fired generation co-located with data centers, rather than connected to wider power grids, ECP's Doug Kimmelman said.
- "What we don't want to do is be taking power off of the grid, which certainly could impact, for the average consumer, reliability and prices. So we need additionality," Kimmelman, the firm's founder and executive chairman, told Axios in an interview.
What's next: The partnership envisions 25 gigawatts worth of projects, with the first coming online in around three years. One gigawatt is enough to power at least 700,000 homes for a year.
- Data centers require the predictability that gas plants provide, but could be "selectively" supplemented with renewables and storage, Kimmelman said.
- The U.S. will be the main focus for building generation and related infrastructure, but the partnership may venture into international markets later, the announcement states.
- The partners are initially planning to provide a combined $5 billion.
The big picture: Analysts see U.S. power demand poised for a prolonged rise after many years of stasis.
- A late 2024 Energy Department study projects data centers accounting for 6.7% to 12% of U.S. electricity use by 2028, up from 4.4% in 2023, though estimates vary and it's a moving target as AI evolves.
- Data centers for AI and other powerful computing are the snazziest but far from the only thing behind the rise. Electric vehicles, new manufacturing and other sectors are all in the mix.
State of play: It's a new partnership, but the two entities are hardly starting from scratch.
- "We have relationships with the hyperscalers, and certainly ADQ and UAE, they have significant relationships with the hyperscalers as well," Kimmelman said.
The intrigue: Kimmelman said Trump 2.0 economic and infrastructure policies — including support for new fossil fuel generation and pipelines — provide strong tailwinds.
- "The environment has changed dramatically to encourage what we're doing," he said.
- "This is also going to spur production of natural gas, which is also on the president's agenda," he said.
What we're watching: When and where the planned projects take shape.
- "You want a constructive regulatory environment in the state," Kimmelman said, as well as access to gas and skilled energy work forces.
- He name-checked Texas and Ohio as good candidates.
