Semafor : Carlyle sees a cash cow in AI electricity boom

A recent Semafor piece covered private equity firm The Carlyle Group and the firm’s involvement in large solar projects in the U.S. Southeast region.

Semafor April 17, 2024: Carlyle sees a cash cow in AI electricity boom

The Carlyle Group is targeting AI-focused data centers as key customers for a series of large solar farms it’s constructing in Arizona. Through its renewable-energy subsidiary, Copia Power, Carlyle has commenced a $2 billion, 1.5-gigawatt solar and storage project near Phoenix. Another similar project will start later this year, with a third one in the works. Initially, Copia Power’s clients included a local utility and Lowe’s, but now it aims to attract tech companies, which are the biggest consumers of low-carbon electricity in the U.S., according to Pooja Goyal, Carlyle’s chief investment officer for infrastructure and head of renewables.

However, these so-called renewable projects may not be completely green. Semafor writes, “the company is working on plans to include small gas-fired power plants alongside some of its future data center projects to ensure 24-hour reliability, a priority for data centers.”

PESP’s executive director Jim Baker also talked to Semafor about Carlyle’s lagging investment in true renewable projects.

Private equity in general has moved more slowly than banking in setting net zero targets and guidelines for their fossil fuel financing, said Jim Baker, executive director of the Private Equity Stakeholder Project, a nonprofit watchdog group. Carlyle in particular, he said, has lagged its peers, and invests about $16 in fossil fuels for every dollar it invests in renewables.

“They’ve adopted a ‘have their cake and eat it too’ approach, in terms of investing in renewables where it’s opportunistic to do,” Baker told Semafor, “but also continuing to invest in oil and gas exploration and production.”