A wind farm in Scranton, Pa., sitting over ancient coal seams, will soon power Goldman Sachs Group Inc.'s data centers in New Jersey.
The Wall Street bank said Monday that it has agreed to buy 68 megawatts of electricity from the plant, which will come online in 2019. It is the first such agreement struck by a bank, according to trade group Business Renewables Center, and pushes Goldman closer to its goal of producing 100% of the energy it uses from renewable sources by 2020.
The deal is Goldman's effort to stake a claim in a hot corner of the energy-trading market -- and to try to catch up with rivals.
Citigroup and Morgan Stanley are already big in the renewables-trading space. Goldman recently hired a Citigroup trader, Moe Hanifi, who will join Harry Singh, Goldman's head of U.S. power trading, in spearheading the firm's effort.
Commodities trading has been a tough business across Wall Street since the financial crisis due to stricter capital rules. It was among the businesses that Goldman blamed for disappointing trading revenues last quarter.
Goldman won't just be in the renewables market for its own needs. The firm's commodities arm has been building a business to connect corporate buyers of electricity with developers.
That group, reporting to commodities chief Greg Agran, will manage the 15-year electricity contract, protecting Goldman from price swings, grid congestion and other risks. It hopes to market that same service to a growing group of companies that are striking their own power agreements, Mr. Agran said in an interview.
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(END) Dow Jones Newswires
June 12, 2017 10:59 ET (14:59 GMT)