Brookfield Asset Management Ltd (NYSE:BAM), Brookfield Renewable Partners LP (NYSE:BEP), and Microsoft Corp (NASDAQ:MSFT) have reached a global renewable energy framework agreement.
Under the terms of the five-year agreement, Brookfield is set to deliver over 10.5 gigawatts of new renewable energy capacity between 2026 and 2030, primarily in the U.S. and Europe.
There's also potential for further expansion into regions like Asia-Pacific, India, and Latin America.
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Microsoft stands to benefit from access to this enhanced renewable energy capacity, which will support the growing demand for its cloud services while fostering grid decarbonization.
The move highlights the urgency to meet clean energy targets while addressing the soaring energy needs of cloud computing and artificial intelligence, according to a report from Financial Times.
The report noted that adding 10.5GW of new capacity would cost more than $10 billion, based on recent industry trends.
This agreement surpasses the previous record set by Rio Tinto plc (NYSE:RIO) for the largest corporate renewable electricity purchase.
By 2026, data centers are projected to consume over 1,000 terawatt-hours of electricity globally, more than double the levels seen in 2022, the report further noted, citing the International Energy Agency.
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The U.S., housing a third of the world's data centers, experiences a significant uptick in electricity demand, driven partly by these energy-intensive facilities.
The endeavor aligns with Microsoft's goal to ensure all its electricity consumption is matched by zero-carbon energy purchases by 2030, reinforcing its commitment to sustainability.
Microsoft stock has gained more than 29% in the past 12 months. Investors can gain exposure to the stock via Technology Select Sector SPDR Fund (NYSE:XLK) and IShares U.S. Technology ETF (NYSE:IYW).
Price Action: MSFT shares are trading higher by 1.36% at $394.64 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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