Alphabet Inc. Class C (GOOGL.US) faces the challenge of entering the decarbonization market: signs agreement with CECEP Solar Energy in Malaysia to supply power to data center until 2027.

Alphabet Inc. Class C's parent company Alphabet (GOOGL.US) has signed a CECEP Solar Energy power purchase agreement in Malaysia, as the tech giant seeks clean power supply for its global operations. According to sources, Alphabet Inc. Class C will purchase electricity from a 30-megawatt CECEP Solar Energy power plant being developed in Kedah state, Malaysia, led by a consortium under a Japanese subsidiary of Shizen Energy. The project is part of the country's initiative to provide green power to businesses and is expected to be operational by 2027. This agreement highlights the efforts of global tech giants to decarbonize their high energy-consuming businesses such as data centers. However, in Asia where Alphabet Inc. Class C, Microsoft Corporation (MSFT.US), and Amazon.com, Inc. (AMZN.US) have large-scale operations, there is still heavy reliance on fossil fuels. An official from Alphabet Inc. Class C earlier this year stated that the region is one of the "most challenging regions globally to decarbonize" for their operations. Reports indicate that Malaysia plans to increase its renewable energy capacity from around 26% last year to 70% by 2050. The country has taken measures to attract investments, such as launching the "business green power program," in which the agreement between Alphabet Inc. Class C and Shizen is signed. Long-term power purchase agreements (PPA) like the one between Alphabet Inc. Class C and Shizen have become key tools for these companies to achieve their emission reduction goals, providing financial security in regions with uncertain regulatory environments. The Malaysian project is the latest agreement reached by Shizen with tech companies, including Clean Energy Fuels Corp. Microsoft Corporation in Japan signed a batch of renewable energy agreements in October, and had previously signed a PPA for Alphabet Inc. Class C's data center in Chiba Prefecture.