RWE plans gas peaker plants to meet US data centre power demand

Germany-based global energy company RWE plans to expand its business in the US by investing €17 billion ($19.5 billion), almost half of its total planned investment volume for 2026 to 2031.

The energy company announced net investments of €35 billion ($40.1 billion) across a ‘well-diversified project pipeline’, the company said in a release, from which they will be able to select the most attractive projects.

Key to the company’s strategy will be the expansion of their business in the US, where they aim to increase installed capacity from 13GW to 22GW by 2031. This capacity includes wind and solar power plants and battery storage facilities, as well as flexible generation from gas peaker plants. 

RWE Chief Executive Officer Markus Krebber said during a press conference: “In the US, we want to expand our business even more than previously planned. 

“Over the next six years, we want to add 9GW: with onshore wind, solar, battery storage – and now also with flexible generation, i.e. gas-fired power plants. Our focus here is on new gas peaking power plants.”

Meeting data centre demand

According to Krebber, such assets will be able to complement the company’s existing renewable energy assets, as they will be able to supply power quickly to meet short-term demand.

Indeed, in the US specifically, power demand from data centres has been rapidly reshaping the power market, leading to an increasing need for base load power. 

Said Krebber: “A reliable supply is especially important for electricity-intensive customers such as data centres.”

Krebber added that their planned peaking facilities will be situated at sites where the company already has access to the power grid.

Their first units, said Krebber, are planned to be in operation by the end of the decade.

“Additional opportunities are arising for us due to the demand for new data centres – both because they drive electricity demand and because we have many potential sites for data centres that benefit from existing grid infrastructure. 

“The attractiveness of these sites for tech companies was demonstrated by our sale of a data centre project in the UK last autumn. That’s why we are working intensively on developing further locations for potential data centres.”

Flexible generation in Germany

In the company’s home territory, cushioning against spiking power demand is also a motivation.

Specifically, RWE has earmarked a total of €9 billion ($10.3 billion) for investments in flexible back-up capacities and large battery projects. 

RWE’s generation capacity in this area is set to grow by 6GW by 2031. This includes the company’s already announced plans to build up to 3GW of new hydrogen- ready gas-fired power plants in Germany.

These plans are subject to tenders held by the German government.

Said Krebber: “The relevant legislation and tender conditions must now follow quickly so that the schedule can be met. We are ready to build 3GW of new hydrogen-ready gas-fired power plants. 

“These will be located at former power plant sites with existing grid connections. We have signed preliminary contracts for turbines and are pushing ahead with the relevant planning and approval processes.” 

These power plants, said Krebber,  will be supplemented by large battery storage systems to balance out peaks in demand and take pressure off the grid. 

“Here too, we will be looking to build at sites with existing grid access.”

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Growth areas

The remaining €9 billion of investment is split across the company’s offshore wind and onshore solar and wind portfolios. 

To expand its offshore wind portfolio, RWE has earmarked €2 billion ($2.3 billion) to expand its offshore wind capacity by a 5GW by 2031; the company currently has 3.1 GW under construction.

It also plans to invest €7 billion ($8 billion) net over the next six years in expanding its onshore wind and solar business in its core European markets – primarily in Germany – and in Australia, thereby increasing its portfolio by 5GW.

Additionally, said Krebber, the company is looking into opportunities to reutilise infrastructure for fusion power plants. 

“Our existing nuclear infrastructure in Biblis and Gundremmingen, for example, provides the ideal conditions for this. Our partners – Focused Energy for laser fusion and Proxima Fusion for magnetic fusion – will make use of these sites."