Denham to shortly announce dedicated portfolio company to deliver the solution
US energy technology firm Babcock & Wilcox (B&W) has partnered with energy transition investment firm Denham Capital to convert former coal-fired power plants into natural gas-fired plants to power data centers in the US and Europe.
According to the companies, the partnership will combine Denham’s experience in developing and operating large-scale power plants with B&W’s expertise in converting coal-fired power plants to utilize natural gas. They claim that natural gas offers the most cost-effective and scalable option to support data center growth.
“Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades. Time-to-power is a key focal point for data center developers and hyperscalers, and this partnership is one differentiated tool we are looking to utilize to meet market needs,” said Justin DeAngelis, global head of Sustainable Infrastructure at Denham Capital.
B&W will provide engineering and technology scope for the projects, with Denham leading the development process, financing, and market expertise.
Denham has announced that it will shortly introduce a dedicated portfolio company focused on delivering these solutions. No timeline for specific projects has been announced yet.
“This partnership brings two well-established, experienced teams together to quickly and effectively identify opportunities to leverage underutilized coal-fired power plants to provide affordable, reliable power for large-scale data centers,” said Kenneth Young, B&W chairman and CEO.
Natural gas is a significantly cleaner option compared to coal, producing around half the level of CO2 per unit of energy. However, it remains a large emitter, including CO2 and potent methane leaks. Therefore, while it may be considered the “cleaner” option compared to coal, when compared to renewable energy, it is still harmful to the environment.
This is B&W's second major announcement directed at the data center sector. In August 2023, the company partnered with Fidelis New Energy on plans for a hydrogen production facility and 1GW data center campus in West Virginia.
Several utilities have converted their former coal-fired plants into natural gas-fired plants. Dominion Energy, Virginia’s primary energy provider, has converted several old coal plants, including the Possum Point Power Station, which was converted to natural gas back in 2003.
More recently, Homer City Redevelopment (HCR) and Kiewit partnered to convert a former coal power station in Pennsylvania into a natural gas-powered AI data center. The partners plan to convert the Homer City Generating Station, a decommissioned 2GW coal-burning power station located near Homer City, Indiana County, Pennsylvania, into a 4.5GW natural gas-powered data center campus spanning over 3,200 acres.
Source: DCD
