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237. Datacenters: "Let’s get Physical" with Quinbrook - Jul26
Brief
The conversation tracked how that shift produced Rowan, Quinbrook’s dedicated data‑center platform launched around 2021 that has rapidly become a top‑three U.S. developer (roughly 350 staff) and closed a ~$1 billion deal with Blackstone. David framed the data‑center market as having moved to 'power first' — hyperscalers now prize physical, timely access to power, forcing providers to combine land, permitting and on‑site multi‑technology power (batteries, GTs, fuels) and sophisticated software controls. He described the practical compromises clients currently accept (e.g., short‑term GTs and imperfect BTM power quality) and the race to integrate real‑time orchestration. On capital markets, David argued the era of cheap, generic megawatts and M&A returns is over: higher rates and commoditization have driven institutional investors toward specialist, value‑add strategies that can deliver differentiated returns (Quinbrook still targets mid‑teens+). Regionally he said the U.S. remains attractive with focused themes, Europe has improving pockets of opportunity, and Australia today offers exceptional OECD‑level opportunities for industrial decarbonization because of irradiance, retiring coal capacity, export logistics and resource endowments. The hosts and David agreed on the core refrain: in a largely virtual renewables world, winning the next phase requires getting physical — land, on‑site power and integrated services — to solve customers’ real reliability and timing needs.
Why it matters
David (Quinbrook) said Quinbrook pivoted away from onshore wind around 2021–22 toward DC‑coupled solar + battery storage after projects like Gemini (Nevada) showed superior cost and time‑of‑day value; Quinbrook pioneered 4‑hour DC‑coupled storage and is now developing 8‑hour and 12‑hour batteries to address the 'missing hours' and push toward 24/7 supply for industrial loads.
Key details
- Rowan (a Quinbrook‑built data‑center developer launched c.2021) is now one of the top three data‑center developers in the U.S.: ~350 employees, rapid growth, and a recently announced ~$1 billion transaction/joint venture with Blackstone (David highlighted this as one of Quinbrook’s most successful investments).
- David described a strategic shift to being thematic and customer‑centric: Quinbrook has built enduring in‑house development, construction, design and operations capability (he cited over 100 staff in those functions) and reports that more than half of its portfolio today is developed internally to retain value and deliver differentiated, solution‑oriented returns.
- On finance and investor appetite, David said cheap money and M&A dominated five years ago but rising interest rates and commoditization of 'generic megawatts' pushed institutional capital toward specialist, value‑add strategies; Quinbrook still targets mid‑teens+ returns while focusing on differentiated risk/return themes.
- David argued the hyperscale data‑center market has become 'power first' — hyperscalers now prize timing and guaranteed physical access to supply more than virtual PPAs — motivating Quinbrook to get physical (land + on‑site power) and offer integrated power + site solutions to win leases.
- Regarding behind‑the‑meter (BTM) solutions, David said hyperscalers are increasingly forced to 'bring their own power' because of grid constraints and community opposition; that has driven a mix of short‑term gas turbine (GT) backups, long‑duration batteries, and heavy investment in real‑time optimization and control software for multi‑technology BTM systems.