ArcLight Betting About $5 Billion on New Gas-Fired Power Plants
(Bloomberg) -- ArcLight Capital Partners acquired electricity developer Advanced Power with a plan to build 20 gigawatts of natural gas-fired plants in the US mainly to feed power-hungry data centers. It says it may invest about $5 billion over the next 5 years.
ArcLight said the plants — capable of producing enough energy to power 16 million homes — can be brought online in 2 to 7 years. The company also intends to build solar and batteries, and will focus on grids stretching from the mid-Atlantic to the Midwest, Texas and the desert Southwest.
Developers are racing to build plants that can provide round-the-clock power to data centers. There’s also demand for existing plants. Publicly traded power producers NRG Energy Inc., Vistra Corp., Constellation Energy Corp. and Talen Energy Corp. have together spent more than $34 billion this year snapping up mainly existing gas plants as the cost to procure power hits records.
ArcLight declined to disclose what it paid to buy closely held Advanced Power, based in Boston and Houston. ArcLight’s investment will support as much as $25 billion in total capital costs for power generation, said ArcLight Partner Angelo Acconcia.
The company sees strong demand growth driven by AI data centers as well as manufacturing and electrification. While ArcLight, based in Boston, is in a position to get key approvals to build plants, it could be subject to regulatory delays and market swings as others have been.
“Power projects take a long time to build and that’s in a normal market. This is not a normal market,” said Advanced Power Chief Executive Officer Tom Spang. “We need to get going and we need it now because we don’t have enough power.”
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