Carlyle to Sell U.S. Power Plant Giant to Quantum Capital for $3 Billion

Global investment firm The Carlyle Group has agreed to sell Cogentrix Energy, the owner of more than a dozen U.S. power plants, to private equity group Quantum Capital for $3 billion, the Financial Times reports.

Carlyle bought the North American power generation assets held by Cogentrix Energy from Goldman Sachs Group back in 2012.

Earlier this year, FT reported that Carlyle had hired investment bank Lazard and law firm Latham & Watkins to advise the group on a potential sale of Cogentrix. A transaction could value the power group at up to $4 billion, three sources told FT in June.

The utilities sector is gearing up for a wave of mergers with power-generating assets in demand as U.S. electricity consumption is set to surge in the coming years thanks to AI-driven technologies.

The current upswing in electricity demand is in stark contrast with a decade of flatlining U.S. consumption.

U.S. power demand is “likely to experience growth not seen in a generation,” according to a report by Goldman Sachs from earlier this year.

America’s demand for electricity will rise roughly by 2.4% each year by 2030, and around 0.9 percentage point of that figure will be tied to data centers, Goldman Sachs Research estimates.

This compares with zero growth in U.S. power demand in the decade to 2023.

Goldman Sachs expects data centers will use 8% of U.S. power consumption by 2030, compared with 3% in 2022. Data center power demand is set to jump by 160% by 2030—and to be driven by AI, the investment bank said.

Although tech firms tend to prefer renewables to power their data centers, solar and wind capacity may not be roll out fast enough to power the new computing demand.

Therefore, natural gas could also be a winner in the AI-driven power demand surge in the U.S. While many tech companies prefer to power their AI development centers with solar and wind, the need to get these data centers built and powered fast would boost demand for natural gas, too, analysts say.

By Tsvetana Paraskova for Oilprice.com

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