Report on ArcLight Capital’s Acquisition of Advanced Power for Sustainable Infrastructure Development

Introduction: A Strategic Investment in Sustainable Energy Infrastructure

ArcLight Capital Partners has announced the acquisition of Advanced Power, initiating a significant investment strategy focused on developing North American power infrastructure. This initiative is strategically positioned to support the escalating energy demands of artificial intelligence (AI) and data centers while making substantial contributions to several United Nations Sustainable Development Goals (SDGs).

Investment Framework and Commitment to SDG 7

The acquisition is underpinned by a robust financial commitment designed to expand the availability of sustainable and reliable energy, directly aligning with SDG 7 (Affordable and Clean Energy).

Financial and Capacity Projections

• An initial equity commitment of $1 billion has been established by ArcLight Capital Partners.
• The partnership has the potential to deploy over $5 billion in equity investment within the next five years.
• The primary objective is to facilitate the development of over 20 gigawatts (GW) of new power generation capacity.

Advancing SDG 7: Affordable and Clean Energy

This investment directly addresses key targets of SDG 7 by focusing on:

1. Increasing the share of renewable energy: The development portfolio includes a significant focus on renewable projects.
2. Ensuring access to reliable energy: The initiative aims to enhance grid capacity and reliability to meet modern industrial and community needs.
3. Promoting clean energy investment: The multi-billion dollar commitment represents a major investment in the infrastructure required for a sustainable energy future.

Enhancing Infrastructure and Innovation in Line with SDG 9

The partnership creates one of the largest power development portfolios in the United States, positioning it to build resilient infrastructure and foster innovation, a core tenet of SDG 9 (Industry, Innovation, and Infrastructure).

Consolidated Portfolio Strength

• Advanced Power’s Pipeline: Includes over 12GW of conventional and renewable projects and more than 10GWh of energy storage.
• ArcLight’s Existing Assets: A 26GW operating power portfolio with expertise across the energy spectrum.
• Combined Development Capacity: A pipeline exceeding 20GW of identified, advanced new generation projects.

Supporting SDG 9 Targets

The project will contribute to SDG 9 by developing reliable, sustainable, and resilient infrastructure capable of supporting new technologies. The explicit goal of powering AI and data centers underscores a commitment to upgrading infrastructure to support technological progress and sustainable industrialization.

Contribution to Sustainable Communities and Climate Action (SDG 11 & SDG 13)

Leadership from both organizations emphasized that the strategic goal is to provide large-scale, sustainable power solutions that address critical bottlenecks in the energy sector. This vision supports the creation of sustainable communities and contributes to climate action.

Leadership Vision for Sustainable Development

• Angelo Acconcia, Partner at ArcLight, highlighted the urgent need for new, large-scale power solutions to provide capacity, reliability, affordability, and sustainability to the North American grid.
• Tom Spang, CEO of Advanced Power, reiterated a commitment to delivering safe and reliable power infrastructure to communities, aligning with ArcLight’s principles.

By focusing on renewable energy sources and large-scale energy storage, the partnership actively contributes to SDG 13 (Climate Action) by facilitating the transition away from carbon-intensive energy sources. Furthermore, by ensuring a stable and sustainable power supply, the initiative supports the development of inclusive, safe, and resilient cities and communities as outlined in SDG 11.

SDGs Addressed in the Article

• SDG 7: Affordable and Clean Energy

  The article focuses on a massive investment in power infrastructure, including conventional and renewable projects, aimed at ensuring a reliable, affordable, and sustainable power supply. This directly aligns with the goal of providing clean and affordable energy.

• SDG 9: Industry, Innovation, and Infrastructure

  The core of the article is the development of “large-scale customised power infrastructure” to support industrial and technological growth, specifically for “artificial intelligence and data centres.” This highlights the goal of building resilient infrastructure and fostering innovation.

• SDG 11: Sustainable Cities and Communities

  The investment aims to bring “safe, reliable power infrastructure to communities.” A stable and sustainable energy grid is a fundamental component for creating sustainable and resilient communities.

• SDG 13: Climate Action

  By investing in “renewable projects” and “energy storage,” the initiative contributes to climate change mitigation. The development of “sustainable power solutions” is essential for transitioning to a lower-carbon energy system, which is a key aspect of climate action.

Specific SDG Targets Identified

• SDG 7: Affordable and Clean Energy

  • Target 7.1: Ensure universal access to affordable, reliable and modern energy services. The article emphasizes the need to provide “capacity, reliability, affordability and sustainability to the North American power grid.”
  • Target 7.2: Increase substantially the share of renewable energy in the global energy mix. The article mentions that Advanced Power’s portfolio includes “over 12GW of conventional and renewable projects and more than 10GWh of energy storage,” directly contributing to this target.
  • Target 7.a: Enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article details a significant financial commitment, with an “initial $1bn (€850m) equity commitment” and the “potential to invest more than $5bn of equity over the next five years” in power infrastructure.

• SDG 9: Industry, Innovation, and Infrastructure

  • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The entire initiative is focused on delivering “large-scale customised power infrastructure” that is described as “safe, reliable power infrastructure.”
  • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable. The investment in “renewable projects” and “sustainable power solutions” represents a direct effort to upgrade power infrastructure to be cleaner and more sustainable.

• SDG 11: Sustainable Cities and Communities

  • Target 11.b: Substantially increase the number of cities and human settlements adopting and implementing integrated policies and plans towards… resource efficiency, mitigation and adaptation to climate change, resilience to disasters. The development of “large-scale, sustainable power solutions” for communities is a practical implementation of such plans, enhancing energy resilience and resource efficiency.

Indicators for Measuring Progress

• Financial Investment in Energy Infrastructure

  The article provides specific financial figures that can be used as indicators of investment in energy infrastructure (relevant to Target 7.a).

  • Initial equity commitment: $1 billion (€850m).
  • Potential equity investment over five years: More than $5 billion.

• New Power Generation Capacity

  The article quantifies the amount of new power generation capacity being developed, which serves as a direct indicator for infrastructure development and increasing energy access (relevant to Targets 7.1, 9.1).

  • Planned new power generation: Over 20GW.
  • Combined development portfolio pipeline: Over 20GW of new generation capacity.

• Renewable Energy and Storage Capacity

  Specific figures for renewable energy and storage capacity are mentioned, which are key indicators for measuring the increase in the share of renewable energy (relevant to Target 7.2 and 9.4).

  • Existing portfolio includes: Over 12GW of conventional and renewable projects.
  • Energy storage capacity: More than 10GWh.

Summary of SDGs, Targets, and Indicators

Source: realassets.ipe.com