Clearway Energy Leaps into AI Power Boom with Google Deal

Clearway Energy (NYSE:CWEN) is flying under the radar as investors focus on trendy energy technologies like advanced fuel cells and small modular reactors. However, the company's parent recently signed a nearly 1.2-gigawatt deal to build renewable power for Alphabet's Google, with Clearway set to drop down assets from its parent at higher rates than before.

The deal represents over $2.4 billion of investment in energy infrastructure and marks a significant expansion of Clearway's existing partnership with Google. The company has also signed new power purchase agreements (PPAs) with hyperscalers, including two contracts that will pay more than double the prior contracted or merchant pricing.

Clearway Energy Group owns or controls a 32 GW development pipeline, providing a long runway of drop-down investment opportunities. The company expects to grow its cash available for distribution (CAFD) per share at the top end of its 5%-8%+ target range through 2030 and has identified 3.5 GW of investment opportunities through 2028.

A new opportunity is emerging in co-located digital infrastructure power investments, with Clearway Energy Group developing over 17 GW of projects across five sites to build on-site power generation capacity at data center campuses.