Battery Energy Storage Systems as Core Transaction Asset
Google’s parent company Alphabet announced on December 22 a definitive agreement to acquire clean energy developer Intersect Power for $4.75 billion in cash plus assumption of debt. The core value of this transaction lies in Intersect’s large-scale battery energy storage system portfolio, with the company currently operating 2.4 GWh of storage capacity, expected to expand to nearly 10 GWh by the end of 2027.
Intersect Power is one of the largest battery energy storage system developers and operators in the United States, with storage projects spanning California and Texas, two key energy markets. The company has $15 billion in operating or under-construction assets, including 2.2 GW of solar photovoltaic generation and 2.4 GWh of battery energy storage systems, adopting an integrated “solar-plus-storage” development model.
Deep Integration with Tesla Megapack Storage Systems
Intersect Power has established a strategic partnership with Tesla in the battery energy storage system sector. In July 2024, the two parties signed a 15.3 GWh Tesla Megapack supply contract extending through 2030. This makes Intersect the world’s largest buyer and operator of Tesla Megapacks, adding crucial technological support to Google’s acquisition.
Tesla Megapack is a large-scale lithium-ion battery energy storage system, with each unit capable of storing up to 3.9 MWh of electricity. Intersect’s currently deployed Tesla Megapack projects include: the 1 GWh battery energy storage system at California’s Oberon project, the 448 MWh system at Athos III, and 1 GWh of systems at Texas’s Radian and Lumina projects. These battery energy storage systems are equipped with Tesla’s Autobidder optimization software for intelligent dispatch and revenue maximization.
AI Data Center Energy Demand Drives Storage Boom
The fundamental driver of this acquisition is the explosive growth in AI data center energy demand. With the rapid development of generative AI technology, data center power consumption has surged, placing enormous pressure on the U.S. power grid. Texas and California, as major data center hubs, are expected to see electricity demand multiply several times by 2030.
Alphabet CEO Sundar Pichai stated: “Intersect will help us build new power generation capacity and battery energy storage systems in lockstep with new data center load, reimagining AI data center energy solutions.” Through this acquisition, Google can bypass traditional grid bottlenecks and directly secure clean energy generation and large-scale battery energy storage system support.
Data Center and Storage Co-location Projects Launch
Intersect will work closely with Google’s technical infrastructure team, with the first collaborative project located in Haskell County, Texas. Named Quantum, this project is a clean energy battery energy storage system built directly alongside Google’s data center campus, achieving physical co-location of data centers and storage systems. This “data center + battery energy storage system” co-location model can effectively smooth AI computing load fluctuations and improve energy utilization efficiency.
Google previously announced a $40 billion investment in Texas through 2027, including new data center campuses in Haskell and Armstrong counties. Through this acquisition, Google has secured supporting energy infrastructure capabilities, accelerating AI data center construction timelines.
15.3GWh Storage Order Sets Industry Record
According to Intersect’s contract with Tesla, more than half of the newly ordered Megapack battery energy storage systems will be used for four projects in California and Texas, expected to be operational by the end of 2027, becoming some of the largest battery storage installations in the United States. Each project comprises 86 Tesla Megapacks, providing 320 MWh of storage capacity with two-hour discharge duration.
Intersect CEO Sheldon Kimber emphasized: “Battery energy storage systems are critical support for energy transition, forming perfect complementarity with our multi-billion dollar solar generation. These storage assets can release power during high-price periods for profit and charge during low-price periods, providing more stable financial performance for AI data center energy supply.”
Storage Technology Drives Clean Energy Transition
Battery energy storage systems play a core role in this transaction, reflecting the critical importance of storage technology in addressing renewable energy intermittency issues. Solar generation has volatility and intermittency, while AI data centers require 99.999% power supply reliability. Large-scale battery energy storage systems can store daytime solar generation and release it at night or on cloudy days, ensuring 24/7 uninterrupted data center power supply.
Tesla Energy Senior Director Mike Snyder stated: “Intersect’s development expertise combined with Tesla’s vertically integrated battery energy storage system technology enables the speed and scale needed to enhance grid resilience and support greater renewables integration.” Tesla Megapacks feature plug-and-play design, completing the entire process from concept to commissioning within 12 months.
Transaction Scope and Future Outlook
Notably, Intersect’s existing operating assets in Texas and certain assets in California are not included in this acquisition. These assets will continue to operate as an independent company, supported by existing investors including TPG Rise Climate. The acquired portion primarily consists of data center, generation, and battery energy storage system projects under construction and development.
By 2028, Intersect is expected to have approximately 10.8 GW of generation projects with supporting battery energy storage systems in operation, a scale equivalent to more than 20 times the output of Hoover Dam. The remaining Tesla Megapack orders will be used for subsequent solar-plus-storage projects coming online in 2028-2030, further expanding battery energy storage system capacity.
The transaction is expected to close in the first half of 2026, subject to customary closing conditions including regulatory approvals. Through this acquisition, Google not only secures hardware infrastructure for AI data center energy but more importantly gains battery energy storage system development and operational capabilities, providing sustainable energy security for its AI competition.
