Financial Services Power & Renewables

Natural gas power M&A premiums double as data center demand and capital costs transform U.S. energy market

Advanced financial modeling and portfolio optimization are redefining how investors value assets in the evolving U.S. power sector

byEnverus

CALGARY, Alberta (Oct. 21, 2025) Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the leading energy SaaS and analytics provider leveraging generative AI, today announced the release of its latest market intelligence report, “The State of Power M&A – What Are the Markets Pricing In?” The new analysis explores the shifting dynamics of U.S. power sector mergers and acquisitions, revealing how accelerating data center growth, grid electrification, and rising capital costs and supply chain issues are driving premiums for operating natural gas power plants and transforming valuation methodologies in competitive markets such as the Pennsylvania-New Jersey-Maryland Interconnection (PJM) and Electric Reliability Council of Texas (ERCOT).

“The surge in U.S. natural gas-fired power M&A valuations, which have doubled since 2024 and reached up to $1.93 million per megawatt for top PJM assets, demonstrates how data center-driven electricity demand and escalating capital costs are fundamentally reshaping how the market values operational power generation assets,” said Scott Wilmot, principal Analyst at EIR.

Key Takeaways:

  • U.S. natural gas power sector M&A valuations have doubled since 2024, with buyers paying record prices for high-efficiency generation assets in competitive wholesale electricity markets like PJM and ERCOT.

  • Data center expansion and grid electrification are driving sustained load growth for the first time in a decade, pushing forward wholesale power prices higher across major U.S. regions.

  • Rising capital costs for new natural gas power plants now average $2,200–$3,000 per kilowatt, fueling higher asset valuations and reshaping transaction strategies.

  • Portfolio optimization strategies are increasingly focused on assets with robust capacity payments and spark spreads, reflecting a shift in how investment value is created in the U.S. power sector.
A chart demonstrating how the "Rising Cost of New Builds Adds Fuel to the Fire"

EIR’s analysis pulls from a variety of products including Enverus FOUNDATIONS® – Power & Renewables and Enverus ET M&A Transactions.

You must be an Enverus Intelligence® subscriber to access this report.

About Enverus Intelligence® Research
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 macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.

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