• Data centers and utilities reinforcing storage demand
• Hybrid economics becoming more compelling in markets like California, Texas and SPP

Corresponding with the rise of data center demand, Brookfield’s Storage Global Lead Arnaud Jouvin says the firm is increasingly leaning on renewable and battery storage hybrids across its subsidiary developers.

Ultimately, Jouvin says, the goal is to “lean on solutions that help the largest consumers of power connect and use clean, dispatchable energy” with the firm in active discussions with equipment suppliers, data center developers and other end-users. He says that naturally means more hybrid solar and storage projects alongside a pipeline of standalone storage, as well as “round-the-clock peak structures and behind-the-meter solutions built specifically to enable new load including data centers.”

Jouvin says Brookfield’s move from standalone renewables toward paired renewables and storage deals is not a clean break from the past, but rather a trend the firm “identified early and is now building around.” The shift spans its developer base, which includes Scout Clean Energy, Deriva, Neoen, X-Elio and, soon, Aypa Power, which Brookfield announced it would purchase in a transaction estimated at around USD 7bn late last month.

“Plenty of buyers still purchase solar or wind on a standalone basis and will keep doing so in the right markets,” Jouvin said. “But a growing share of offtakers now want power they can rely on when demand peaks, not just an annual volume of clean electrons. What we see everywhere is that batteries are becoming the technology of choice to add new capacity.”

Additionally, Jouvin hints that Brookfield’s M&A appetite may not be sated and says the firm will move on future deals where they add “differentiated capacity and scale as Aypa does.”

Jouvin believes most data center will end up with paired batteries at both the front-of-the-meter and behind-the-meter levels and that much of the storage the firm is currently supplying to utilities are also going toward data center demand, “which means the data center and utility channels reinforce each other rather than compete.”

Jouvin argues solar and storage make the most natural partners for hybrid projects as storage shifts solar capacity into “high-value evening hours,” increasing the attractiveness of solar to buyers. The hard part, he says, isn’t the battery but “writing a bankable hybrid contract that turns generation and storage into a single product and repeating that across very different markets.”

While he notes a hybrid can typically cost more than a standalone renewables project, he argues it delivers a “far more useful product with energy in the hours that matter, added capacity value, fewer curtailed MWh, and a hedge against volatility. Then, when combined with cheap MWh from solar, “they deliver the absolute cheapest route to near-baseload, flexible clean power, which is exactly what market participants need.”

Economics of hybrids

Jouvin says the specific drivers for hybrid contracts include falling midday prices, more negative pricing, weaker capacity values for solar and light grid connections. Ultimately, though, he says the “real differentiator” between hybrid contracts is execution as “very few can structure hybrids at scale and then replicate them, which is what sets Brookfield apart.”

While Jouvin says the economics that favor pairing renewables with storage exist “almost everywhere,” the differentiator market to market is largely about timing. He says regions like California, Texas and, increasingly, SPP are ready for hybrids today, which he notes is where Aypa’s portfolio currently sits. In other markets with higher midday prices, he says standalone renewable deals currently stack up but that Brookfield’s footprint and commercial relationships will allow it to determine when other markets “reach the tipping point” and arrive with the right structure before prices adjust.

“We’re not forcing one template across the country,” Jouvin said. “Instead, we’re matching each contract to how mature that market is. That’s how we capture value early and anticipate demand rather than chase it once the discount on midday solar is obvious to everyone.”

In the meantime, Jouvin says Brookfield is also not stepping away from standalone storage, which he notes the firm is leaning more heavily into thanks to the Aypa acquisition. He claims Aypa has “the largest standalone battery storage platform in North America with around 6.5 GW operating, under construction and contracted and a pipeline above 20 GW.”

NPM is currently tracking 35 pre-operational projects from Aypa Power, nearly all of which are standalone storage, with a combined capacity of 12.5 GW.