Google firms power sector position after finalising $4.8bn Intersect deal and co-launching Utilize with Tesla

Google is stepping deeper into the power sector as rising electricity demand from data centres pushes technology companies to secure and shape their own energy supply.

The company has acquired energy and data centre infrastructure developer Intersect for $4.75 billion in cash plus the assumption of debt and has, alongside Tesla, launched a new industry coalition, Utilize, which aims to improve how existing electricity infrastructure is used across the US.

Intersect acquisition

Google’s parent company Alphabet announced the acquisition in December 2025, saying at the time that it would help bring new data centre and power generation capacity online more quickly while accelerating energy development and innovation.

Google had already owned a minority stake in Intersect from a previous funding round, with the transaction including Intersect’s team and multiple gigawatts of energy and data centre projects in development, or under construction, from its successful existing partnership with Google. 

Intersect will also explore a range of emerging technologies to increase and diversify energy supply, while supporting Google’s US data centre investments to meet its Cloud customers’ and users’ demand. 

Sundar Pichai, CEO of Google and Alphabet, commented on the acquisition at the time, saying the company would help them “expand capacity, operate more nimbly in building new power generation in lockstep with new data centre load, and reimagine energy solutions to drive US innovation and leadership.”

Under the agreement, Intersect will remain a separate operation under its existing brand and will continue to be led by Founder and CEO Sheldon Kimber. The company will work closely with Google’s technical infrastructure teams while continuing to develop joint energy and data centre projects.

That includes the companies’ first announced co-located data centre and power site, under construction in Haskell County, Texas. 

However, not all of Intersect’s existing projects will be included in the transaction. Their operating assets in Texas and their operating and in-development assets in California will remain outside the acquisition and will continue operating independently.

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Those assets will remain supported by existing investors, including TPG Rise Climate, Climate Adaptive Infrastructure, and Greenbelt Capital Partners.

Greenbelt Capital Partners, when confirming completion of the sale, described it as a “landmark transaction in the evolution of one of the nation’s leading clean energy platforms”.

IPX Power launches

At the same time, with the acquisition, the independent power producer IPX Power was launched from certain Intersect assets and will operate separately with backing from Greenbelt and other investors.

IPX begins operations with a portfolio that includes approximately 4.4GW of solar photovoltaic capacity and 8.8GWh of battery storage in construction or operation, as well as a multi-gigawatt development pipeline across California and Texas.

The company will continue to develop, own, and operate utility-scale clean energy projects serving utilities, aggregators, corporate buyers, and other energy customers.

Said Glenn Jacobson, Managing Partner of Greenbelt Capital Partners: “The successful closing with Google underscores the strength and strategic value of the Intersect franchise and the dynamic leadership of its CEO, Sheldon Kimber. 

“As a standalone company, IPX can focus on scaling its operating fleet and development pipeline as a well-capitalised independent power producer with a premier portfolio of solar and storage assets. We look forward to continuing to support IPX as it delivers reliable, affordable clean power at scale.”

Coalition focused on improving grid utilisation

Alongside its efforts to secure energy supply through infrastructure development, Google is also participating in initiatives focused on how the existing electricity grid is used.

The company, alongside Tesla, HVAC major Carrier, virtual power plant platform Renew Home, utility services company Sparkfund, electricity tech company SPAN, and data centre company Verrus, launched Utilize, a coalition that will promote policies aimed at increasing the utilisation of existing grid infrastructure.

The group argues that the US electricity system has historically been built to meet short periods of peak demand, leaving large parts of the network underused for much of the year.

Utilize says improving the use of existing infrastructure could help states meet growing electricity demand from sectors such as data centres, manufacturing and electrification without significantly increasing costs.

The coalition plans to work with governors, legislatures, utilities, regulators, and stakeholders across the political spectrum to support technology-neutral policies that increase grid utilisation.

“For decades, we’ve built the grid to meet peak demand, even though large portions of it sit unused for most hours of the year,” said Ian Magruder, Executive Director of Utilize. “It’s like building an airplane that only flies with full passengers a few times a year.”

Research cited by the coalition indicates that the opportunity could be significant.

A Duke University analysis of 22 US regional power systems found that the electric grid operates at 53% of capacity on average, meaning that generation, transmission, and distribution infrastructure is underused for much of the year. 

Another study from Stanford University found that even during peak periods, most transmission lines in the Western US grid were carrying between 18 and 52% of their available capacity, with the majority clustered around roughly 30% utilisation.

The coalition argues that improving access to this unused capacity could allow new electricity demand to connect more quickly while spreading grid costs across more energy consumption.

Google said improving utilisation will be important as demand continues to grow.

“As demand grows, the priority has to be meeting new load without driving up costs for existing customers,” said Ellen Zuckerman, Head of Energy Market Development for North & South America at Google. 

“Google is proud to support Utilize’s work to unlock underused capacity so growth in electricity demand translates into broader affordability and system benefits.” 

Data centre demand reshaping power markets

These announcements come as the rapid expansion of AI and cloud computing is reshaping the relationship between large technology companies and electricity systems.

Data centres have become some of the most energy-intensive assets in the modern economy, and their business models are increasingly tied to long-term access to reliable and affordable electricity.

As a result, technology companies are increasingly moving beyond simply purchasing power and are becoming more directly involved in shaping how energy infrastructure is financed and developed.

As covered in last week's Power Playbook, US companies, including Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon, signed the Ratepayer Protection Pledge announced by US President Donald Trump.

The pledge commits the companies to covering the costs of additional electricity production required for AI data centres.

“Under this new agreement, big tech companies are committing to fully cover the costs of increased electricity production required for AI data centres,” Trump said. “This means that the tech companies and data centres will be able to get the electricity they need all without driving up electricity costs for consumers.”

Google has also supported project structures that link data centre development directly with new energy infrastructure.

In one example, a project in Pine Island, Minnesota, involves an agreement with Xcel Energy to supply power to a new Google data centre.

Under that arrangement, Google will cover any new grid infrastructure costs associated with the project, including funding for new wind and solar capacity as well as a large battery storage installation.