Includes 18 natural gas plants with a combined capacity of 13GW.
NRG Energy is set to acquire LS Power’s power generation portfolio in a $12 billion deal.
Announced during its Q1 results, the Houston-based firm cited rising prices and the growth of data center and other large load contracts as the primary drivers behind the acquisition.
Larry Coben, CEO of NRG Energy, said: "The acquisition meaningfully increases the number of sites available to support large loads in data centers, positioning us to meet the needs of hyperscalers and other large load customers and the emerging demand across our core markets."
The assets acquired include 18 natural gas generation facilities with a combined capacity of 13GW, and a virtual power plant platform - dubbed CPower - with 6GW of capacity, located across the North East and Texas.
The deal is expected to close in Q1 2026 and will double NRG’s overall generation capacity to 25GW. It will also solidify the company’s presence on the PJM Interconnection market, which serves Virginia and Pennsylvania, two major data center markets. LS Power will receive a meaningful portion of the transaction consideration in NRG shares.
NRG has signed several deals aimed at the data center market over recent months. In February, the firm penned letters of intent with two data center developers, PowLan and Menlo Equities, to develop 500MW and 300MW of gas power generation, respectively.
In addition, it signed a project development agreement with power equipment manufacturer GE Vernova and construction firm TIC to develop up to 5.4GW of natural gas generation. The four plants will serve the ERCOT wholesale market in Texas and the PJM Interconnection wholesale market to meet demand from the data center sector.
During the call, Coben highlighted the importance of additionality for the market, stating: “Additionality is still going to be a big part of people’s data strategies going forward, and we now have the optionality to be able to do that.”
The acquisition is a show of confidence for the country’s natural gas sector, which looks set to play the leading role in powering new data center developments. A report earlier this year from the Institute for Energy Economics and Financial Analysis revealed that utilities and gas pipeline companies across southeastern US states are planning to build more than 20GW of natural gas power plants by 2040.
While much of the new generation capacity is set to serve utility customers, data centers are also seeking natural gas agreements off-grid as a means to expedite their route to market. As a result, major petrochemical firms ExxonMobil and Chevron have announced plans to develop dispatchable off-grid natural gas power plants for data centers.
