Fortum's Google Power Deal Could be Boost for European Data Center Buildout

Dow Jones09-09 20:47

1247 GMT - Fortum's nuclear power deal with Google could have favorable implications not only for the Nordic energy company's valuation, but also the European data-center buildout story, Citi analyst Piotr Dzieciolowski writes. The deal has a long duration, is material in size, and looks to be priced at a substantial premium to current expected future wholesale prices, he says. Fortum and Google signed a 22-year power purchase agreement for 50% of the Loviisa nuclear power plant's capacity. The agreement will start in 2028 and will reach 50% of the Loviisa power plant's capacity in 2030-49. The volume linked to the deal is above 4 terawatt hours, which is about 9% of Fortum's current portfolio and 5% of Finnish demand, Citi adds. Shares rise 14%.

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