NRG Energy, GE Vernova Target AI Power Business

In a strategic move to capitalize on the growing demand for computing power and generative AI (GenAI), NRG Energy Inc. (NYSE:NRG) has joined forces with GE Vernova, Inc. (NYSE:GEV) and TIC – The Industrial Company (TIC), a subsidiary of Kiewit Corporation (Kiewit), to form a new venture aimed at rapidly bringing new electricity generation capacity to market. This collaboration combines the strengths of a power generation and wholesale company/developer, original equipment manufacturer, and engineering, procurement and construction (EPC) company to deliver quality, certainty, and speed in powering GenAI capability.

The venture will initially focus on advancing four projects totaling over 5 gigawatts (GW) of efficient, new natural gas combined cycle power plants for the ERCOT & PJM markets. The first 1.2GW project is expected to commence commercial operation in 2029 with two (2) 7HA gas turbines secured under a slot reservation agreement with GE Vernova. Subsequent projects will be targeted to come online through 2032, with the model being replicable and scalable, potentially filling a future pipeline of 10-15GW and expanding to other areas across the U.S.

Robert J. Gaudette, Executive Vice President and President of NRG Business and Wholesale Operations, emphasized the importance of this partnership in meeting the growing demand for electricity, stating, "The growing demand for electricity in part due to GenAI and the buildup of data centers means we need to form new, innovative partnerships to quickly increase America’s dispatchable generation. Working together, these three industry leaders are committed to executing with speed and excellence to meet our customers’ generation needs."

Dave Ross, President & CEO of GE Vernova’s Gas Power business in the Americas, expressed excitement about NRG's selection of GE Vernova's industry-leading 7HA gas turbine technology, stating, "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."

Dave Flickinger, Executive Vice President of Kiewit Corporation, highlighted the company's long, successful track record as an EPC contractor in the power market, stating, "Our long, successful track record as an EPC contractor in the power market will help us meet the speed, safety, quality, and delivery demands of this venture – and serve as a strong partner to NRG and GE Vernova."

The choice of natural gas combined cycle technology reflects a pragmatic balance between immediate reliability needs and environmental considerations. These plants offer quick-start capabilities, high efficiency (60%+ thermal efficiency with GE's 7HA turbines), and approximately 50% lower carbon emissions than coal alternatives. This balance is evident in the following points:

1. Quick-start capabilities: Natural gas combined cycle plants can quickly ramp up or down to meet changing demand, ensuring reliability and stability in the power grid. This is crucial for AI data centers that require high uptime and can't afford extended downtime.
2. High efficiency: With thermal efficiencies of 60% or more, these plants convert a significant portion of the energy from natural gas into electricity, minimizing waste and maximizing output. This efficiency helps to reduce the overall environmental impact and lower costs.
3. Lower carbon emissions: Compared to coal alternatives, natural gas combined cycle plants emit approximately 50% less carbon dioxide. This reduction in emissions helps to mitigate the environmental impact of power generation, aligning with the goals of a decarbonizing economy.

By selecting natural gas combined cycle technology, the NRG-GE Vernova-Kiewit partnership addresses the immediate reliability needs of AI data centers while also considering the environmental impact, demonstrating a balanced approach to power generation.

The replicable and scalable model of this venture positions NRG Energy to capture premium long-term power purchase agreements with technology companies, as it allows for quick adaptation to changing demand and offers reliable, dispatchable power. With Morgan Stanley estimating a $15-20 billion annual market for new power capacity dedicated to AI infrastructure through 2030, the NRG-GE Vernova-Kiewit partnership is well-positioned to capitalize on this growing opportunity.



In conclusion, the strategic partnership between NRG Energy, GE Vernova, and Kiewit's TIC subsidiary represents a significant step towards meeting the growing demand for electricity driven by the exponential growth of computing power and generative AI. By leveraging the strengths of each company and utilizing natural gas combined cycle technology, this venture is well-equipped to deliver quality, certainty, and speed in powering GenAI capability, while also considering the environmental impact. As the market for AI infrastructure continues to grow, this partnership is poised to capture a significant share of the premium long-term power purchase agreements with technology companies.