Houston Business Journal – Houston energy leaders form new company, raise $300M to help build data centers
By Jishnu Nair
July 18, 2024
Several executives formerly at Houston-based renewable energy developers are embarking on a new project tapping into one of the biggest current technology trends: data centers.
Houston- and Seattle-based Cloverleaf Infrastructure raised $300 million from private equity investors Dallas-based NGP and Connecticut-based Sandbrook Capital. The company’s three current co-founders — CEO David Berry, COO Brian Janous and Chief Technical Officer Jonathan Abebe — also contributed to the funding round.
Although the impact of data centers has come under scrutiny in Texas and elsewhere, the founders behind Cloverleaf Infrastructure are scoping out land in states where renewable energy is prominent, Sandbrook Capital said via an email to the HBJ.
“Cloverleaf wants to go where the power is,” Sandbrook said. “We are seeing large-scale development of data centers in states such as Wisconsin, Ohio and Indiana, where renewable power is abundant.”
Sandbrook also said that the new funding is likely to go toward buying land rather than projects in progress. Some companies, like Portland, Oregon-based GridStor, have entered the Texas energy market by acquiring projects that haven’t been fully built.
All three founders have backgrounds in infrastructure development for either power and transmission or data center infrastructure. Berry was the co-founder of Clean Line Energy Partners, a Houston-based company aiming to build long-haul renewable power lines. The company shuttered around the end of last year after the Department of Energy terminated a partnership for one of its projects.
Berry also co-founded ConnectGen, a Houston-based renewable energy platform. Houston- based Quantum Capital Group sold the company to Spain-based Repsol S.A. last year in a $768 million deal, which also marked Repsol’s entry into the U.S. onshore wind market. Berry was also Harris County’s first county administrator, serving from 2020 to 2023.
Meanwhile, Janous was formerly the vice president of energy at Redmond, Washington-based Microsoft Corp. (Nasdaq: MSFT), where he managed the company’s global data center footprint.
Abebe worked as a technical adviser to the DOE’s Loan Programs Office. He also formerly worked at San Francisco-based Pattern Energy, which has a Houston office as well as several projects, including the Southern Spirit line, that can bring power from other grids to the Electric Reliability Council of Texas.
Now, Cloverleaf aims to marry two trends in energy and technology: the push to shift power grids to renewable energy and the growth of data centers that power high-intensity computing tasks, such as the use of artificial intelligence.
“The rapid growth in demand for electricity to power cloud computing and artificial intelligence poses a major climate risk if fueled by high-emission fossil fuels,” Berry said in a press release. “However, it’s also a major opportunity to catalyze the modernization of the U.S. grid and the transition to a smarter and more sustainable electricity system through a novel approach to development.”
The increase in data centers, however, has come under scrutiny from regulatory officials concerned about the demand they exert on power grids. Lt. Gov. Dan Patrick directed interim legislative changes to the state Senate Business and Commerce Committee, asking legislators to evaluate whether Texas’ grid can keep pace with factors such as population growth and “energy-intensive technologies.”
“I’m more interested in building the grid to service customers in their homes, apartments, and normal businesses and keeping costs as low as possible for them instead of for very niche industries that have massive power demands and produce few jobs,” Patrick said in a post on X, formerly known as Twitter. “We want data centers, but it can’t be the Wild Wild West of data centers and crypto miners crashing our grid and turning the lights off.”
Meanwhile, renewable energy developers have sounded alarms about the state’s priorities in incentivizing development. New tax programs passed during the 88th Legislative Session in 2023 omit new renewable facilities as eligible projects for incentives, while the state’s new Texas Energy Fund is aimed at new natural gas-powered plants.