Private equity firms are increasingly becoming pivotal forces in the global clean energy transition, extending their influence beyond direct project financing to strategically acquire the underlying land for renewable assets. This calculated shift is poised to significantly reshape the deployment trajectory of clean power, control dynamics within the sector, and the equitable distribution of benefits to local communities.

Recent high-profile transactions underscore this trend. TPG Global is reportedly pursuing a $2.34 billion acquisition of Altus Power, while Stoa SA and EDF Brasil Holding are competing for Brazil’s Geração Céu Azul SA, a hydroelectric operator. Concurrently, Brookfield Asset Management recently finalized a $7 billion deal for French renewables company Neoen, and Energy Capital Partners acquired Atlantica Sustainable Infrastructure for $2.6 billion. KKR has also submitted a $3 billion bid for Germany’s Encavis, signaling a broad-based appetite for renewable energy assets and the land they occupy.

Renewable energy generation, particularly wind and solar, is inherently land-intensive. Samantha Gross, director of energy and climate for the Brookings Institution, notes that these technologies require at least ten times more land per unit of power produced compared to fossil fuel-fired plants, even accounting for fossil fuel extraction and transport. Furthermore, wind and solar facilities must be sited where resource availability is optimal, rather than merely convenient for existing infrastructure or population centers, as their 'fuel' cannot be transported like traditional commodities.

Data from S&P Global indicates that private equity and venture capital transactions in the global renewable energy sector reached nearly $15 billion across 104 deals in 2023. This surge in investment is critical given the escalating global electricity demand, driven by the proliferation of AI data centers, electric vehicles, and industrial electrification. Wind and solar currently constitute approximately 17% of the U.S. energy mix and 13% of the worldwide portfolio, with China leading global renewable energy consumption at 30% of its electricity supply.

The strategic acquisition of land with consistent wind resources, high solar insolation, and crucial grid access presents a potential concern. Should private equity firms consolidate control over these prime locations, it could inflate the cost of less desirable land, potentially translating into higher electricity prices for consumers or delays in clean energy deployment. This scenario poses a challenge to global decarbonization efforts.

Conversely, the American Investment Council, representing the private equity industry, views this involvement as a natural fit for long-term, growth-oriented investors. They assert that private equity sponsors offer more than just capital, providing patient funding, expertise to navigate regulatory complexities, and a growth-oriented approach that can accelerate clean energy development. Over the past decade, domestic wind and solar investments backed by private equity have exceeded $130 billion, with private equity sponsors financing nearly 3,000 energy enterprises totaling $617 billion since 2012.

While the influx of capital is largely a net positive, fueling innovation and scaling operations to meet ambitious targets—such as the International Renewable Energy Agency’s call to triple renewable capacity by 2030—the strategic control of prime land introduces a new dimension. Firms acquiring land strategically located near existing transmission lines gain a significant advantage, potentially disadvantaging local communities and other energy producers who face expensive and time-consuming grid upgrades for less optimally sited projects.

Doug Kimmelman, founder of Energy Capital, emphasized the electricity sector’s transformation into a major growth area, with demand projected to double over 15 years. This foresight drives the strategic moves by private capital. However, this ambitious expansion necessitates careful oversight to prevent a new form of market gatekeeping. Policymakers can address these concerns through regulatory frameworks that mitigate land concentration and by prioritizing community-owned projects via preferential permitting or financing. While accelerating renewable energy deployment is paramount, it must be balanced with community safeguards to avoid repeating past errors where local populations bore environmental and social costs without equitable benefits.