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Abu Dhabi’s sovereign wealth fund ADQ and US private equity firm Energy Capital Partners (ECP) have announced a 50-50 partnership to develop new power generation and energy infrastructure. The joint venture, launched with an initial investment of $5 billion, aims to create 25 gigawatts (GW) of new energy projects with over $25 billion in capital investments over the next five years. According to an ADQ representative, the initiative may explore adding 24/7 renewable power to the energy mix in the future. However, its primary focus will be on gas-fired power generation assets to meet the growing energy demands of hyperscalers and other energy-intensive industries. These projects will directly supply data centers and high-demand facilities in the US, rather than traditional power grids. Growing Energy Demand from Data Centers The expansion comes amid soaring electricity consumption from data centers, driven by the rise of artificial intelligence (AI). In 2023, data centers accounted for 4.4% of total US electricity consumption, a figure projected to reach 12% by 2028, according to a US Department of Energy (DOE) report. Recent large-scale investments highlight this trend. In January, Dubai-based real estate developer Damac Properties announced a $20 billion investment in new data centers across Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan, and Indiana. ADQ stated that it is targeting energy demand hotspots in the northeastern and southwestern US, with plans to finalize the first power purchase agreement (PPA) within the next 12 months. The projects will offer customized energy solutions by collaborating with data center operators and their tenants to design and build power-generation assets tailored to their needs. Strategic Investments and US-UAE Cooperation ADQ, which manages $225 billion in assets as of June 2023, has invested in critical infrastructure across 130 countries, including the US. Energy and utilities comprise 39% of its global portfolio. The announcement coincides with a high-level UAE delegation visit to the US, led by UAE National Security Adviser and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon bin Zayed. Discussions with former US President Donald Trump centered on strengthening cooperation in key sectors, including energy, technology, and AI. During the recent CERAWeek energy conference in Houston, UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber emphasized the US as a strategic business partner in energy and technology. Dr. Al Jaber, who is also the CEO of Adnoc, previously unveiled the world’s first renewable and battery storage facility during Abu Dhabi Sustainability Week. The Masdar-led project integrates 5GW of solar capacity with 19GWh of battery storage to deliver 1GW of uninterrupted clean power, marking a breakthrough in sustainable baseload energy. The ADQ-ECP partnership underscores the UAE’s commitment to advancing energy security, expanding clean power solutions, and strengthening economic ties with the US. |
