NRG agrees with hyperscaler for 1.2 GW gas-fired power plant in Texas

The $3.2 billion project comes two days after the Texas governor suspended data center connections.

NRG Energy announced on August 6 that it had agreed on key commercial terms with an unidentified global cloud and AI operator to develop a 1.2 GW gas-fired combined-cycle plant in Texas. The first phase represents $3.2 billion, or about $2,670 per kilowatt, for commissioning by the end of 2029; a second phase could increase capacity to 2.4 GW.

The financial package is indicative of the model that is required: on a contract of more than fifteen years, more than 95% of the cash flows come from capacity payments and not from the sale of electricity. CEO Robert Gaudette sums it up this way: the company is paid for the megawatts built and made available, not for the actual consumption of the data center.

The announcement comes two days after Governor Greg Abbott decided to suspend data center connections to the Texas network and impose a project-by-project review. NRG believes that its approach — bringing its own production — puts it in a better position in a more constrained environment.