Google selects Shell as its UK renewable energy manager

Google has selected Shell Energy Europe as its renewable energy manager in the UK. The move is expected to contribute to UK grid stability and help the US tech giant reach its goal of running entirely on clean energy by 2030.  

Shell will manage a power portfolio for Google that addresses the intermittency of clean energy generation through access to battery energy storage systems (BESS). It will optimise Google’s existing clean energy portfolio, including the off-take from its long-term agreement with Engie from the Moray West wind project offshore Scotland, storing surplus energy when electricity generation is high and releasing stored power back to the grid when generation is low.  

The announcement expands Shell’s strategic relationship with Google. Since October 2023, the companies have announced three power purchase agreements (PPAs) to supply Google with renewable energy from the NoordzeeWind, HKN V and HKW VI wind projects which are located offshore the Netherlands.  

Google is also investing in a wide range of other clean energy technologies, including enhanced geothermal, advanced nuclear and fusion technologies, and, most recently, long duration energy storage (LDES) provided by a ‘CO₂ battery’. Between the Shell alliance and these other clean energy initiatives, Google says its UK operations ‘will be running at or near 95% carbon-free-energy in 2026’.  

The Shell announcement coincided with the official opening of Google’s new data centre in Waltham Cross, Hertfordshire, by UK Chancellor Rachel Reeves. According to Google, the data centre will help meet growing demand for its AI services, including Google Cloud, Gmail, Search and Maps. The facility is designed to minimise environmental impact. It will use advanced air-cooling technology to limit water usage to domestic use and is equipped to support off-site heat recovery, meaning heat from the data centre can be re-routed and provided free of charge to help warm local homes, schools or businesses.

The new data centre is part of a two-year, £5bn finance package that includes Google’s capital expenditure, research and development, and related engineering over the next two years. It also encompasses Google DeepMind with its pioneering AI research in science and healthcare. According to the UK government, Google’s investment will ‘help the UK develop its AI economy and unlock AI breakthroughs across the UK, fortify cybersecurity, and create future-focused career opportunities for millions of Brits’.

Microsoft invests $30bn to power UK AI  

Meanwhile, a finance package from Microsoft underpinned the lion’s share of the £31bn of investment announced under the Tech Prosperity Deal signed during President Trump’s state visit. In its largest financial commitment ever made in the UK, the US tech giant is to invest $30bn (£22bn) in building out the UK’s cloud and AI infrastructure to 2028. The finance package will also support ‘ongoing operations’ in research, sales and product development across the country.

As part of the deal, Microsoft is backing construction of the UK’s largest supercomputer, in Loughton, Essex – which will feature more than 23,000 advanced GPUs (graphics processing units) – in partnership with Nscale.

‘Microsoft’s landmark investment is a powerful vote of confidence in the UK’s leadership in AI and cutting-edge technology. [It] will not only strengthen our digital infrastructure and support thousands of highly skilled jobs, but also ensure Britain remains at the forefront of global innovation,’ commented Prime Minister Keir Starmer.

Brad Smith, Microsoft President, added: ‘Our ability to make an investment of this size is based in no small measure on the work the [UK] government is doing to reform planning, grow electricity capacity, and foster a more stable and open regulatory environment. For AI to fully realise its potential, businesses need clarity and predictability in how they can deploy their investments, and people need confidence that these technologies are being developed and deployed responsibly.’

A number of other investments and partnerships were also announced as part of the UK-US tech pact. These included US data centre company CoreWeave planning to invest a further £1.5bn in the UK and building in Scotland what will be ‘one of Europe’s largest AI data sites’ in partnership with UK company DataVita. US software company Salesforce is to invest an additional £1.4bn in its UK business through to 2030. And GPU maker NVIDIA is planning to invest an undisclosed amount in the UK’s AI startup scene.

Microgrids are key to accelerating data centre growth in Europe

In related news, a new research paper from technology group Wärtsilä and energy solutions business AVK suggests that microgrids will be key to accelerating Europe’s data centre growth and energy transition.  

According to the report, ‘a combination of renewables, grid balancing engines and energy storage make for the most cost-effective microgrids to power data centres, while also cutting emissions and providing vital grid balancing to enable the energy transition’.

The rapid growth of AI is driving increased demand for data centres across Europe, which is expected to increase by 250% by 2030, from 10 GW to 35 GW, says the study. ‘With the Continent’s grid facing constraints from high energy prices and bloated grid connection queues, data centre operators are increasingly turning to off-grid solutions to power these energy-intensive assets,’ it adds.

On current trajectories, 40% of existing AI data centres are expected to be operationally constrained by power availability by 2027, note Wärtsilä and AVK. ‘Microgrids can take this new strain off the grid in the short term and when grid connection is achieved, excess energy generated can be sold. As well as furthering cost reductions for data centre operators, this can provide vital flexibility to Europe’s power challenges,’ they conclude.