Google Secures 21-Year Malaysian Solar for Data Hubs

• Google inks 21-year, 1 TWh solar PPA in Malaysia with TotalEnergies, backing 24/7 carbon-free power for AI-era data centers and storage-ready PV as Southeast Asia pivots to physical PPAs.

Google signed a 21-year power purchase agreement with TotalEnergies to procure 1 terawatt-hour of certified solar power in Malaysia, tied to the forthcoming Citra Energies plant. Construction starts in early 2026 with first power in 2027, supporting Google’s 24/7 carbon-free energy goal as AI-driven data center demand grows across the region.

The long-dated PPA from a creditworthy offtaker underpins financing for utility-scale PV in Southeast Asia’s volatile, capacity-constrained markets. The project is expected to use trackers and bifacial modules, with room to add multi-hour battery storage to shape evening output. The deal underscores a shift from certificates to physical PPAs and helps secure grid priority.

What financing and grid-priority advantages does Google’s 21-year Malaysia solar PPA unlock?

• Investment-grade, 21-year offtake supports long-tenor, non-recourse project finance with lower margins, lighter DSCRs, and longer amortization, cutting levelized cost of energy.
  
• Creates eligibility for multilaterals/ECA participation and ringgit or green/sukuk bond issuance, broadening the lender base and reducing refinancing risk.
  
• Minimizes merchant tail and basis risk, improving bankability for trackers/bifacial tech and future multi-hour storage, including construction-to-term debt for a storage retrofit.
  
• Enables robust hedging (FX/interest-rate) aligned to cash flows, stabilizing returns and boosting equity valuations.
  
• Strengthens EPC/O&M terms and performance security, with better pricing on contingency and warranty packages.
• Anchors an early, firm interconnection queue position and capacity reservation, improving odds of timely grid tie-in in a constrained network.
  
• Supports negotiated priority-dispatch features—deemed energy and curtailment-compensation clauses—reducing revenue risk from congestion or outage windows.
  
• Justifies and accelerates utility-approved grid reinforcements (substation upgrades, feeders) by providing a bankable offtake to underwrite capex.
  
• Provides a clear schedule for grid studies and commissioning, enabling advanced controls (e.g., grid-forming inverters) that ease integration and win operator preference.
• Storage-ready terms allow evening shaping and ancillary services, making the plant more dispatchable and more likely to be favored during peak or constraint periods.