With high prices prompting mergers and acquisitions in power, how long can the party last?
While federal regulators wring their hands over resource adequacy, capacity pricing, and runaway load growth, the private capital markets are riding high on power deals – at least for now.
At the S&P Global Power and Gas M&A Forum this week, top players from Evercore, KKR, Morgan Stanley, and Barclays painted a clear picture: deal activity is booming. Despite transaction volume holding flat year-over-year, the volume of megawatt-hours changing hands has doubled, driven overwhelmingly by tech-sector demand. The data center arms race isn’t just reshaping the grid; it’s also reordering private market priorities.
The dominant narrative? Demand is surging, but buildout remains bogged down by ambiguous federal signals, rising development costs, and an interconnection queue that resembles a waiting list for a sold-out concert. It’s the same cocktail of uncertainty that dominated last week’s FERC conference – except now, the tone is more opportunistic.
Panelists repeatedly called for an “all of the above” buildout strategy: more renewables, more gas, more nuclear. But while private capital is happy to foot the bill for now, many are asking: where’s the public funding?
Especially as residential ratepayers start to feel the pinch, the absence of a coherent federal funding mechanism is glaring. One panelist pointed out that gas and nuclear are particularly appealing targets for infrastructure funds this year; hardly the full-spectrum energy transition.
Meanwhile, deals like the Calpine–Constitution pipeline transaction are setting new benchmarks for private equity spend in the sector. But even this optimism has its limits. If chip efficiency doesn’t keep pace with hyperscale load growth, and if retail prices continue to climb, political intervention is only a matter of time.
As consolidation sweeps the market and uncertainty dominates the policy landscape, Karbone Research provides valuation support, price forecasting, and strategic guidance for those navigating the new energy economy.
