Denham Capital Management LP and Babcock & Wilcox Enterprises Inc (B&W) have signed a partnership agreement to produce electricity to support data center growth in the United States and Europe.
The partnership “will include technologies for coal power generation or natural gas conversion projects as well as back-end environmental technology”, a joint statement said.
“[S]ubstantial investments will be made to convert coal-fired power plants to cleaner natural gas solutions, which represent a crucial bridge for the clean energy transition”, the companies added. “Natural gas offers cost-effective and rapid deployment to support the development of data centers until renewables can match the pace of electricity demand growth”.
Denham Capital will lead development and financing while B&W will handle the engineering and technology scope.
U.S. data centers are expected to consume 65 gigawatts (GW) of electricity between 2025 and 2028, around 45 GW more the current capacity can handle, the companies noted.
“Existing interconnected assets help fill the void given the five-year median interconnection timeline for U.S. power projects, amid 2,200 GWs of projects in interconnection queues”, they said.
“The partnership combines Denham’s expertise in developing, building and operating large-scale power plants across six different continents, and B&W’s many decades of industry-leading experience in coal power generation and the conversion of coal-fired power plants to use natural gas”, the statement said.
Justin DeAngelis, global head of sustainable infrastructure at Denham Capital, commented, “Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades. Time-to-power is a key focal point for data center developers and hyperscalers, and this partnership is one differentiated tool we are looking to utilize to meet market needs”.
“We are delighted to partner with B&W to offer reliable, fast, low-cost and sustainable power solutions to the data center market, leveraging B&W’s nearly 160 years of expertise in power boilers, and bringing Denham’s 10 GW of experience in developing, constructing or operating power generation”, DeAngelis added.
“Given the scale of this opportunity, Denham will shortly announce a dedicated portfolio company focused on delivering these solutions”.
B&W chair and chief executive Kenneth Young said, “This partnership brings two well-established, experienced teams together to quickly and effectively identify opportunities to leverage underutilized coal-fired power plants to provide affordable, reliable power for large-scale data centers”.
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