Brookfield Asset Management has agreed to acquire National Grid Renewables, the U.S. onshore renewables division of U.K.-based National Grid Plc, for US$1.7 billion.

The deal expands Brookfield’s renewable-energy portfolio and reflects investor confidence in the rising demand for electricity driven by artificial intelligence and data centres.

“This transaction is another important step in delivering National Grid’s previously communicated strategy to focus on networks and streamline our business, as announced in May 2024,” said National Grid in a news release. 

As part of that effort, National Grid launched a broader £6.8-billion capital-raising initiative, according to Bloomberg.

The transaction is expected to close in the first half of National Grid’s financial year ending March 31, 2026. Brookfield gains a portfolio that includes operational projects and others in advanced stages of development.

This acquisition follows Brookfield’s record-setting 2024 agreement to provide clean energy to Microsoft Corp.

According to Jeh Vevaina, global chief investment officer of Brookfield’s renewable power and transition group, data-centre expansion continues to drive demand.

“We’ve gone through earnings announcements for the large US tech companies, and this is post their announcement, and all of them have reaffirmed their data-centre strategy,” Vevaina told Bloomberg. “That demand is not slowing down. In fact, it’s ramping up quite significantly.”

The sale comes amid uncertainty over U.S. federal renewable-energy incentives, including those outlined in the Inflation Reduction Act. However, Brookfield remains confident in the sector’s trajectory.

“Renewables is not driven by government policy any longer,” Vevaina told Bloomberg. “It’s driven by corporate demand.”

National Grid Renewables develops, constructs, owns, and operates large-scale solar, onshore wind, and battery storage projects across the U.S. It currently has 1.8 gigawatts of operational capacity and 1.3 gigawatts under construction. National Grid Plc is retaining other U.S. assets, including power and natural-gas networks in New York and Massachusetts, which serve more than 20 million people.

Photo: National Grid