Å Energi and Bulk Infrastructure (Bulk) have signed a long-term power purchase agreement (PPA) linked to the planned Øygard hydropower plant in Åseral, Norway, as demand for renewable electricity from data centres and artificial intelligence infrastructure continues to grow.
The agreement follows Å Energi’s recent final investment decision to build the Øygard hydropower plant. Construction is scheduled to begin later this year.
“We are facing significant growth in demand for renewable energy. Close collaboration between power producers and industry is therefore essential. The agreement with Bulk increases predictability and strengthens the profitability of a major and important project such as the Øygard hydropower plant,” said Steffen Syvertsen, CEO of Å Energi.
Under the agreement, an estimated annual production of 80 GWh from the Øygard hydropower plant will be linked to operations at Bulk’s N01 Data Center Campus in Vennesla. The arrangement will be enabled through guarantees of origin, confirming that an equivalent volume of electricity is generated by the new hydropower facility.
The PPA provides long-term price certainty and will run for 10 years from the expected commissioning of the plant in 2029.
According to the companies, the agreement is among the first in Norway in which a data centre operator and a power producer have signed a power purchase agreement before the project’s final investment decision.
“This is an important strategic agreement for us. Bulk is a long-term industrial company committed to contributing to the development of the Norwegian energy system. Through this agreement, we take responsibility for securing more of the power required for our operations and for the region,” says Jon Gravråk, CEO of Bulk Infrastructure.
Industry organisations say the deal highlights the role of long-term power contracts in enabling new renewable generation.
“We need more power and grid capacity, both for existing and new industries. More municipalities should approve new developments, and the state must grant more licenses. Long-term power agreements like this, between developers and industry, provide predictability for both parties and help unlock new power generation. That is something we strongly support,” said Ole Erik Almlid, CEO of Confederation of Norwegian Enterprise (NHO).
Electricity demand in Norway is expected to rise significantly toward 2050 as electrification and new industrial activity increase power consumption. Data centres are widely expected to be a major driver of this demand growth.
“Data centers are expected to account for a significant share of electricity demand growth in the coming decades. It is positive to see industrial players contributing to enable additional power generation, and this agreement is a strong example of that,” commented Syvertsen.
Gravråk says the data centre sector is beginning to play a more active role in enabling new power projects.
“The data center industry is power-intensive, but it also represents flexibility and backup solutions for the grid and plays a role in shaping the future energy system. There are significant opportunities ahead. I am proud that our industry is now contributing to new energy generation, just as traditional cornerstone industries have done before us,” he said.
Syvertsen added that similar agreements could help accelerate renewable energy investment.
“Agreements like this provide power companies with greater predictability in investment decisions and demonstrate how industry can help unlock new renewable energy production. I hope more industrial and commercial players recognize that collaboration can help realize the power they will need in the future,” concludes Syvertsen.
