Clearway Energy Signs Major Power Deals to Fuel AI Infrastructure Growth

Key Points

Clearway Energy’s parent has recently agreed to develop additional power capacity for Google, which it will eventually transfer to its affiliate.

Clearway has also entered into new power purchase agreements with hyperscalers at rates considerably higher than previous arrangements.

An emerging upside exists in co‑located digital infrastructure power projects.

Investors seeking exposure to the AI power boom typically look to emerging energy technologies such as Bloom Energy, a fuel‑cell manufacturer listed on the NYSE under ticker BE, and Oklo, a small modular reactor developer listed on the NYSE under ticker OKLO. Bloom Energy has secured major AI partnerships with Oracle and Brookfield, while Oklo has agreements with Meta Platforms and Switch.

Clearway Energy, a high‑yielding clean‑power producer listed on the NYSE under ticker CWEN, is often overlooked. Its parent, Clearway Energy Group, quietly entered into a nearly 1.2 GW renewable power agreement with Alphabet (NASDAQ: GOOG) and its subsidiary Alphabet Inc. (NASDAQ: GOOGL). The deal commands higher pricing because Alphabet, as a hyperscaler, has substantial energy demands.

AI power demand serves as a key catalyst that positions Clearway among the leading renewable energy stocks for investment.

Image source: Getty Images.

Clearway Energy is starting to cash in on the AI power boom

In January, Clearway Energy Group signed three long‑term power purchase agreements with Google, totaling nearly 1.2 GW of renewable energy projects to support its data centers. The agreements represent more than $2.4 billion in infrastructure investment, with the first projects slated for commissioning in 2027 and 2028. This expands Clearway’s existing partnership with Google, which currently includes a 71.5‑MW project in West Virginia.

Clearway is not initially investing directly in these assets, but it plans to do so. It has agreed to acquire the Goat Mountain wind repowering project in Texas—backed by a Google PPA—once it becomes operational next year. Additionally, Clearway has earmarked Swan Solar and Catamount Wind, two other Google‑linked projects, for potential acquisition in 2028.

The Google agreement is not the primary story. Clearway recently signed over 600 MW of PPAs to extend the life of its existing wind farms to 2041. The contracts include two with a hyperscaler and one with a commercial/industrial customer, featuring fixed pricing more than twice the prior rates. These arrangements indicate that legacy assets are gaining significant value in the AI era, creating a substantial recontracting opportunity as existing PPAs expire.

A new upside opportunity is emerging

The Google‑linked drop‑down deals represent only a fraction of Clearway’s potential. The company currently controls a 32 GW development pipeline, providing ample opportunities for drop‑down investments. Through 2028, Clearway has committed to or identified 3.5 GW of projects, valued at approximately $1.3 billion. These drop‑down deals allow Clearway to recycle capital into new renewable energy projects, including those that will serve AI data centers.

The two catalysts outlined above set a clear growth baseline for the coming years. Clearway projects revenue growth in cash available for distribution (CAFD) per share at the upper end of its 5%‑8%+ target range through 2030, with similar growth expected into 2031 and beyond.

A new opportunity could further accelerate growth after 2030: co‑located digital infrastructure power investments. Clearway is developing more than 17 GW of projects across five sites to provide on‑site generation capacity for data center campuses. The company foresees an upside of over $1 billion in capital deployment by 2030. The initial Wyoming project aims for in‑service in 2029, with full capacity of 3‑4 GW achievable in 2030.

What this means for investors

Clearway is not a typical AI power play. While companies such as Bloom Energy are projected to achieve 100% revenue growth this year, or Oklo, which has minimal current revenue, are largely speculative, Clearway benefits from the stability of long‑term PPAs and a high‑yielding dividend exceeding 5.5%.

The dividend is expected to grow and become more sustainable. Clearway anticipates CAFD per share increasing from $2.12 in the prior year to a range of $2.90‑$3.10+ by 2030. With an annualized dividend of $1.90 per share, the company can expand its dividend while targeting a long‑term CAFD payout ratio below 70%. This combination of earnings and income growth should deliver double‑digit average annual total returns.

Clearway is not without risk. Recent lower CAFD guidance for 2026 reflects strong El Niño weather patterns that have reduced wind generation in the United States. Additionally, the company’s ability to acquire assets from its parent at fair terms is crucial. Nevertheless, the accelerating power demand driven by AI data centers positions Clearway to grow at or above its long‑term target range for years to come.

An AI power name you should know

Clearway Energy differs from Bloom Energy or Oklo; it does not develop new energy technologies from scratch. Instead, it leverages an existing portfolio of clean‑energy assets secured by long‑term PPAs, a portfolio that is becoming increasingly valuable in the AI era. By acquiring additional assets from its parent and third parties, Clearway should generate steady cash flow and dividend growth for investors who can collect dividend payments while others wait for speculative names like Oklo to potentially deliver returns.

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