Energy company NRG purchases Virtual Power Plant firm CPower from LS Power in acquisition deal
In a significant move, NRG Energy has announced the acquisition of CPower, a leading Virtual Power Plant (VPP) company, and a portfolio of 18 gas facilities from LS Power. The deal, valued at approximately $12 billion, is set to close in the first quarter of 2026.
CPower, a company that operates more than 2,000 commercial and industrial customer sites, is one of the largest VPP operators in the country. The company's CEO, Michael Smith, has written an opinion piece stating that a VPP could provide reliability at 40% to 60% of the costs compared to conventional resources.
The acquisition of CPower will provide NRG with a larger, more flexible platform across core Northeast and Texas markets. This move suggests that NRG sees the benefits of grid flexibility to meet load growth, particularly in the rapidly growing demand for tailored, long-term supply solutions, especially for data centers.
The deal also includes LS Power's portfolio of 18 gas facilities, totaling 13 GW of generation capacity. This addition will increase NRG's generation capacity to 25 GW.
It is worth noting that most VPP companies in the U.S. have struggled to find a commercial foothold. However, the inclusion of a VPP company in the NRG-CPower-LS Power deal is a rare occurrence in major deals for fossil gas projects.
In a separate deal, Constellation Energy Corporation agreed to acquire Calpine Corporation in a transaction with an enterprise value of over $29 billion, announced in January. Unlike the NRG-CPower-LS Power deal, the Constellation-Calpine deal did not include a VPP company.
The NRG-CPower-LS Power deal consists of $6.4 billion in cash consideration, $2.8 billion in stock consideration to LS Power, and $3.2 billion of net debt. The Editor's note states that this story was updated on May 12 to correct the nature of CPower's relationship to LS Power; CPower was owned by LS Power until the acquisition by NRG.
The acquisition will not only strengthen NRG's position in the energy market but also contribute to the company's goal of providing reliable, affordable, and clean energy solutions. The deal is expected to have a positive impact on NRG's operations and financial performance in the long run.
