This partnership aims to address anticipated capacity shortages in the PJM grid while supporting economic development and mitigating rising electricity prices for consumers.
PPL Corporation and Blackstone Infrastructure announced a strategic Joint Venture aimed at constructing, owning, and operating new Gas-Fired, combined-cycle generation stations. These facilities will specifically cater to the escalating power needs of data centers across Pennsylvania, operating under long-term energy services agreements (ESAs).
This collaboration is poised to leverage the distinct strengths of both entities. PPL, a leading utility company, brings its deep expertise in energy infrastructure, while Blackstone Infrastructure contributes its robust investment capabilities and a proven track record in data center development and power generation. The joint venture, with PPL holding a 51% interest and Blackstone Infrastructure 49%, will share expenses and distributions ratably.
Vincent Sorgi, PPL President and Chief Executive Officer, emphasized the venture's dual benefits. "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," Sorgi stated.
The focus of the joint venture is on developing "front-of-the-meter" generation facilities. These will be optimally located atop the prolific Marcellus and Utica shale basins, ensuring quick access to significant and available natural gas pipeline capacity. This positioning targets areas with substantial data center interest, aiming to meet the burgeoning demand driven by the digitization of the economy.
Sebastien Sherman, Senior Managing Director at Blackstone Infrastructure, echoed this sentiment, highlighting the partnership's commitment to long-term solutions. "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," Sherman said.
While the joint venture has already secured multiple land parcels, the construction of these new natural gas plants is contingent upon the successful execution of ESAs with hyperscale data center operators.
The formation of this joint venture comes at a critical time for the PJM Interconnection, which has forecasted potential capacity shortages as early as the 2026-27 delivery year. Within PPL Electric Utilities' service territory alone, potential data center projects represent over 60 gigawatts (GW) of demand, with 13 GW in advanced planning stages. PPL estimates a 6 GW generation shortfall in its service territory within the next five to six years if all 13 GW materialize, representing an estimated $15 billion investment need.
