PPL Corporation and Blackstone Infrastructure have announced a strategic joint venture to build, own, and operate new natural gas-fired combined-cycle generation stations in Pennsylvania, aimed at powering data centers through long-term energy services agreements (ESAs). This initiative addresses the surging demand for reliable, dispatchable power driven by the rapid growth of data centers and the digitization of the economy, particularly within the PJM Interconnection service territory.
The joint venture, with PPL holding a 51% stake and Blackstone Infrastructure 49%, targets areas atop the Marcellus and Utica shale basins, leveraging significant available gas pipeline capacity. This collaboration is designed to mitigate rising electricity prices, support economic development, and deliver shareholder value without exposure to traditional merchant power risks.
PJM forecasts potential capacity shortages as early as the 2026-27 delivery year, driven by increasing data center demand, retirements of aging dispatchable generation, and a predominance of intermittent resources with low completion rates. Within PPL Electric Utilities’ service territory alone, data center interest exceeds 60 gigawatts (GW), with over 13 GW in advanced planning stages. PPL estimates a 6 GW generation shortfall in the next five to six years, representing an estimated $15 billion investment need assuming natural gas combined-cycle units are used.
Financially, PPL reported revenues of \(8.462 billion and operating income of \)1.74 billion for the fiscal year 2024, with net income attributable to the parent company at $888 million. This joint venture aligns with PPL’s strategic focus on addressing resource adequacy concerns within PJM and supporting large-load customers like data centers through innovative energy solutions.
PPL President and CEO Vincent Sorgi emphasized the partnership’s potential: “We’re excited to leverage the powerful expertise that PPL and Blackstone Infrastructure possess to bring much-needed new dispatchable generation online in Pennsylvania to match new data center load in a way that directly supports economic development and large load customer needs, helps to mitigate rising electricity prices for energy consumers, and delivers increased value for shareowners without traditional merchant power risk.”
Sebastien Sherman, Senior Managing Director at Blackstone Infrastructure, added, “Blackstone Infrastructure has a proven track record and commitment to long-term partnerships, and we look forward to working with PPL to power data centers across Pennsylvania and the broader PJM service territory.”
This joint venture is a critical step in addressing the unprecedented demand growth in the energy sector, particularly driven by the expansion of data centers and the digital economy. It also complements ongoing legislative efforts in Pennsylvania to enable utilities to invest in and operate generation assets, further derisking new generation investments.
For investors and stakeholders, this development signals PPL’s proactive approach to energy infrastructure investment, positioning the company to capitalize on the growing energy needs of hyperscale data centers while managing regulatory and market risks effectively.
Source document: PPL Corporation 8-K Report