US energy generation and retail electricity firm NRG Energy has signed a project development agreement with power equipment manufacturer GE Vernova and construction firm TIC to develop up to 5.4GW of natural gas generation across four projects.
The four plants will serve the ERCOT wholesale market in Texas and the PJM Interconnection wholesale market. The companies plan to “rapidly” bring the new generation online to meet the power needs of the data center sector.
The first facility, which is expected to have a capacity of 1.2GW, is due to begin commercial operations in 2029. The other three plants are slated to come online through 2032.
"Growing demand for electricity due to generative AI and the buildup of data centers means we need to form new, innovative partnerships to quickly increase America’s dispatchable generation," said Robert Gaudette, president of NRG's business and wholesale operations during the company’s Q4 earnings call.
The first project will utilize two GE Vernova model 7HA gas turbines. The new generation will add to NRG’s 13GW generation portfolio.
“GE Vernova is honored and excited that NRG has selected to own and operate our industry-leading 7HA gas turbine technology as they continue to increase their ability to serve their customers,” said Dave Ross, president and CEO of GE Vernova’s gas power business in the Americas.
In the earnings call, NRG also reported that it signed Letters of Intent with two data center developers, PowLan and Menlo Equities, to develop 500MW and 300MW of gas power generation, respectively. Work on the power generation assets is expected to commence in 2026.
In addition, the power company said it was openly seeking to negotiate further agreements with data center firms for power contracts totaling around 7.5GW.
The company said it has already selected eight sites for development and is exploring other greenfield options. In total, NRG sees at least 15GW of potential capacity across its coverage area to serve the data center market.
NRG has a diversified portfolio of assets, including natural gas, coal, oil, nuclear, wind, and solar. It serves more than seven million retail customers across 24 US states, including Texas, Connecticut, and Ohio.
Late last year, the company partnered with Renew Home and Google Cloud to create a 1GW virtual power plant (VPP) in Texas.
The partners aim to distribute hundreds of thousands of VPP-enabled smart thermostats by 2035 and create a nearly 1GW artificial intelligence (AI) powered VPP enabled through Google Cloud to improve Texas grid resilience.
The partnership follows NRG’s decision to divest its renewable advisory division to CBRE Group in October. The division brokered more than 5GW of clean power, focusing on community solar, large-scale energy contracts, Virtual Power Purchase Agreements, and other renewable opportunities.
GE Vernova has partnered with several power generation companies to develop new gas generation assets to serve the data center market. Last month, it partnered with NextEra Energy to develop gas-fired generation to meet the energy demands of data centers.
