Babcock & Wilcox plans to convert existing coal plants to power data centres

Babcock & Wilcox has signed a strategic partnership agreement with Denham Capital’s Sustainable Infrastructure arm to jointly pursue opportunities to support the increased demand from data centres in the US and Europe.

The agreement focuses on technologies for coal power generation or natural gas conversion projects, as well as back-end environmental technology. 

Through the partnership, investments will be made to convert coal-fired power plants to natural gas solutions. The partnership combines Denham’s experience in developing, building, and operating large-scale power plants across six different continents, and B&W’s experience in coal power generation and the conversion of coal-fired power plants to use natural gas.

“Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades,” said Justin DeAngelis, Global head of Sustainable Infrastructure at Denham Capital. “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.”

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“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 10GW of experience in developing, constructing or operating power generation,” DeAngelis said. “Given the scale of this opportunity, Denham will shortly announce a dedicated portfolio company focused on delivering these solutions. It is vital we leverage existing power fleets, decarbonize, and increase the quality and security of our power generation systems.” 

According to Industrial Info Resources (IIR), as of early March, there were over 1,900 data centre projects in development in the US, with a total investment exceeding $800 billion. A lot of this announced spend is tied up in multi-building campuses with additions that are planned out to 2035.

While nuclear is a favorite of data centre developers, natural gas may get most of the business – at least for the time being.

Tech giants and institutional investors have recently announced plans to pour billions of dollars into natural gas-fired plants and data centre infrastructure. Blackstone announced it would spend $25 billion on data centres and combined-cycle plants in Pennsylvania. The private capital giant formed a joint venture with PPL Utilities to build, own, and operate the plants that would power data centres under long-term service agreements with hyperscalers. In another announcement, Google said it would invest $25 billion in data centre and AI infrastructure across the PJM region over the next two years.

ArcLight Capital Partners, a private equity firm, has similar aspirations of catering to the AI world. ArcLight recently announced plans to acquire the Middletown Energy Center, a 484MW gas-fired plant in Butler County, Ohio. The firm is acquiring Middletown through a series of transactions from a consortium of sellers.

Originally published by Sean Wolfe on Power Engineering Factor This