It is a day of acquisitions for power company NRG Energy. Faced with the need for more supply especially to meet data center demand, the company has doubled its generation capacity in one fell swoop.
The power giant has acquired the virtual power plant company CPower, which has roughly six gigawatts of capacity across all deregulated markets in the U.S. The company is one of the largest VPP operators in the country, with more than 2,000 commercial and industrial customers.
But the company is also buying power plants of the more traditional variety. In an even bigger acquisition, NRG is taking on LS Power’s portfolio of 18 gas facilities, to the tune of 13 additional GW of generation capacity. (CPower is also owned by LS Power.)
The transaction has an enterprise value of about $12 billion. It was a cash and stock deal: $6.4 billion of cash consideration, $2.8 billion in stock consideration to LS Power, and $3.2 billion of net debt. The deal is expected to close in the first quarter of 2026.
The transformational deals mean that NRG will now have 25 GW of generation capacity, and “a larger, more flexible platform across core Northeast and Texas markets,” the company wrote in a press release. “The acquisition expands NRG’s capabilities to serve rapidly growing demand for tailored, long-term supply solutions for customers — particularly data centers,” NRG continued.
This is just the latest of a series of major deals for fossil gas projects to power data centers, and especially for artificial intelligence. In January, Constellation announced an agreement to acquire Calpine, one of the country’s largest fossil gas generators in the country. That deal had an enterprise value of over $29 billion, with a goal of expanding the company’s retail offerings.
However, the NRG-CPower-LS Power deal is unique in that it includes a VPP company. Most VPP companies in the U.S. have struggled to find a commercial foothold, much less achieve an exit. So while the company’s publicity on the deals has highlighted the gas purchases, the fact that they also took on VPP resources suggests that they see the benefits of grid flexibility to meet load growth.
As CPower CEO Michael Smith wrote in an opinion piece for Latitude Media in November, “a VPP would provide the same reliability that a conventional resource such as a natural gas peaker or transmission-connected utility-scale battery would during a grid emergency — but at 40% to 60% of the costs.”
Editor’s note: This story was updated on May 12 to correct the nature of CPower’s relationship to LS Power; CPower was owned by LS Power until the acquisition by NRG.
