PPL and Blackstone Partner to Build Gas Plants for Data Centers in Pennsylvania

PPL Corporation and Blackstone Inc. have formed a joint venture to develop gas-powered energy facilities tailored for data center operations in Pennsylvania. The facilities will deliver power to data centers under long-term energy service agreements, offering stable returns while minimizing exposure to volatile merchant energy pricing. The project aims to meet the growing energy demands of the digital economy and address potential energy shortfalls by 2026 due to aging infrastructure and surging demand from data-intensive industries.

PPL Corporation (NYSE: PPL) and Blackstone Infrastructure have announced the formation of a joint venture to build, own, and operate gas-fired, combined-cycle generation stations tailored for data center operations in Pennsylvania. The joint venture aims to meet the growing energy demands of the digital economy, particularly in light of potential energy shortfalls by 2026 due to aging infrastructure and surging demand from data-intensive industries.

The joint venture, which will develop front-of-the-meter generation that sits atop the Marcellus and Utica shale basins, will focus on areas with significant data center interest. It plans to enter into long-term energy service agreements (ESAs) with regulated-like risk profiles, minimizing exposure to merchant energy and capacity price volatility. Construction of new natural gas plants will require successful execution of ESAs with hyperscalers, a process in which the joint venture is actively engaged.

PPL owns 51% of the joint venture interest, with Blackstone Infrastructure owning 49%. The venture seeks to deliver stable returns to shareholders while addressing the critical need for dispatchable generation to support economic development and large-load customer needs in Pennsylvania.

The project aligns with broader efforts to mitigate rising electricity prices and support Pennsylvania's energy infrastructure development. Pennsylvania Gov. Josh Shapiro welcomed the initiative, highlighting its potential to drive economic growth and job creation in the state. The joint venture plans to engage with local stakeholders as development progresses.

The announcement comes as PJM Interconnection forecasts potential capacity shortages as early as the 2026-27 delivery year, underscoring the urgency for new solutions. PPL estimates a 6 GW generation shortfall in its service territory in the next five to six years, representing a $15 billion investment need. The joint venture aims to fill this gap, with PPL expecting the generation to be built by existing independent power producers, the new joint venture, and, if permitted, PPL Electric Utilities.

References:
[1] https://www.prnewswire.com/news-releases/ppl-corporation-and-blackstone-infrastructure-create-joint-venture-to-build-natural-gas-generation-in-pennsylvania-in-support-of-data-center-development-302505948.html
[2] https://www.marketscreener.com/quote/stock/PPL-CORPORATION-14091/news/PPL-Corporation-and-Blackstone-Infrastructure-Create-Joint-Venture-to-Build-Natural-Gas-Generation-i-50517488/