If your IRP has a greenfield gas plant in it, there’s a good chance nobody has run the one comparison that matters most, what that same capacity would cost to acquire instead of build. Enverus Intelligence® Research (EIR) puts combined-cycle gas turbine (CCGT) construction for the post-2027 cohort near $2.0 million per MW, based on 76 disclosed projects. Recent acquisitions of existing, interconnected plants have cleared near $1.0 million per MW. That’s a $1 million per MW gap, and buyers are paying roughly 50 cents on the dollar for capacity that’s already permitted, built, and connected to the grid. Most utilities filing for new gas capacity haven’t run that comparison against their own project.
The gap exists because the things that make a plant expensive to build (construction costs, permitting timelines, interconnection queues) don’t apply to a plant that already cleared them. There’s also a premium on time to power.
That $1 million per MW gap isn’t the only cost of getting the timing wrong. A plant that’s already interconnected can start serving a large load today. One that still needs to be built can’t serve anything until it’s finished, and for the post-2027 cohort, that’s years out. Every year of revenue from that load that doesn’t show up sooner is a year it isn’t offsetting the rate pressure the rest of the filing is asking regulators to accept. Buying costs less per MW, and it can start relieving that pressure sooner, in some cases avoiding the rate case altogether.
Financing a new plant today would take capacity payments near $500/MW-day in PJM or power prices near $70/MWh in ERCOT, both well above where those markets are actually clearing. That’s exactly the kind of gap between a filing’s assumptions and market reality that a rate case is built to expose. For a utility with a 20-year capital plan and a PUC watching every prudency review, “we could have bought this for half the price” is not a sentence you want an intervenor saying for you.
That gap probably won’t hold forever, and the same report says so. EIR flags turbine-price relief as a real risk to the wedge. As manufacturers add large-frame capacity beyond 2027-28, equipment costs could ease, and a slowdown in data center demand would soften the M&A bid before it lowers build costs. The wedge is wide today, but it isn’t guaranteed to stay that wide.
What It Still Takes to Build New
That doesn’t mean building new is off the table, but it raises the bar for what a defensible filing looks like. A filing built around a single, unstructured merchant assumption is an easy target for an intervenor. One built around real structure, shared capital and risk, a locked-in buyer, secured equipment, holds up far better. National Grid Ventures’ $1.75 billion, 35% stake in Joulent, announced July 1, shows what that structure looks like in practice. The deal is a joint venture with Chevron that spreads capital and risk, anchored by a 20-year power purchase agreement with a Microsoft-operated data center as the creditworthy long-term offtaker. Joulent’s flagship project, a 2.67 GW build in West Texas, also has its GE Vernova turbines already secured for a 2028 first-power date, the kind of detail that holds up a filing as well as the price tag does.
For a vertically-integrated IOU with a greenfield CCGT already sitting in this year’s IRP, the load growth behind that filing is usually real, so the need for new capacity isn’t really in question. What often never got run is the build-versus-buy math, the kind that has to survive an intervenor holding up this $1 million per MW gap in the rate case. A G&T co-op runs the same risk with a different audience, a member board and an RUS or CFC loan officer will ask the same question without needing a docket to do it.
We look at a version of this same tension in our ebook, Planning You Can Defend, which argues for planning against two scenarios at once, supply-tight and supply-loose, rather than betting a twenty-year capital plan on one. A single-scenario IRP is exposed either way. This is that same exposure, showing up as a $1 million per MW gap instead of a load forecast.
Run the Math Before You File
If your IRP has a greenfield gas plant in it, our analyst team can benchmark that project against current acquisition comps in your market and give you a defensible build-versus-buy position before intervenors ask the question for you.
About Enverus Intelligence® | Research, Inc. (EIR)
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macroeconomic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. See additional disclosures here.
