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
Related News
- ExxonMobil halts 1-Bft3d blue hydrogen project in Texas
- Golden Pass LNG revises EPC contract for Trains 2 and 3
- Freeport LNG export plant in Texas to take in more natgas after unit shut on Monday
- Japan set to approve the restart of the world's biggest nuclear plant, lessening 2026 LNG import demand
- Aramco's Jafurah gas plant (Phase 1) begins output
Comments