Talen Energy inks $3.45-B deal for gas plants to boost PJM footprint
Talen Energy said on Thursday it would buy 2.6 gigawatts (GW) of natural gas-fired generation capacity from private equity firm Energy Capital Partners for $3.45 B, doubling its expected annual generation and strengthening its position in the PJM market that operates in the Mid-Atlantic and Midwest U.S.
Shares of the U.S. utility surged about 10% in the morning trade.
Power demand in the United States is expected to hit record levels in 2026, driven by rapid growth in AI and cryptocurrency data centers alongside increased electrification of homes and businesses, pushing U.S. power producers to scale up gas-fired generation.
Talen has been rapidly acquiring assets across the PJM region to meet surging demand. Last year, it bought two power plants for $3.5 B as part of its "flywheel" strategy to expand baseload capacity and serve hyperscale data centers.
"AI and data center capital budgets overall continue to expand, not contract. We are seeing new announcements and different kinds of strategies to power growing data center demand," CEO Mac McFarland said on a conference call.
The utility is working on the remaining levers of its strategy, which also includes a new data center deal. The company will announce the deal when "it is ready", McFarland added.
Talen's deal with Energy Capital includes the Waterford Energy Center and Darby Generating Station in Ohio, and the Lawrenceburg Power Plant in Indiana.
The power producer said the deal comprises about $2.55 B in cash and roughly $900 MM in stock.
The deal will roughly double Talen's expected annual generation output inside of two years and be immediately accretive to adjusted free cash flow per share by more than 15% annually through 2030.
"This purchase continues to showcase there is tremendous value to be had in existing assets, especially in the PJM," Evercore ISI analyst Nicholas Amicucci said.
The transaction is expected to close in the second half of 2026.
Related News
- Emerson introduces hybrid continuous gas analyzer for improved regulatory compliance and emissions control
- INNIO secures additional major order from VoltaGrid, including 300 Jenbacher gas engines
- GTT receives order from Samsung Heavy Industries for the tank design of two new very large ethane carriers
Related News
- Freeport LNG export plant in Texas reports shutdown of liquefaction train
- TotalEnergies and Mozambique announce the full restart of the $20-B Mozambique LNG project
- RWE strengthens partnerships with ADNOC and Masdar to enhance energy security in Germany and Europe
- Five energy market trends to track in 2026, the year of the glut
- Venture Global wins LNG arbitration case brought by Spain's Repsol
Comments