News Release

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.

Picture of Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Related News

Enverus ranks top U.S. private E&P operators
News Release
ByJon Haubert

Enverus released its annual Top 100 Private E&P Operators list, ranking U.S. private oil and gas producers by production, well count and rig activity.

Enverus acquires PDS exchange assets, expanding its operating network across U.S. energy markets
News Release
ByJon Haubert

Enverus acquires four PDS Energy Information exchange platforms, expanding secure data exchange for completions, well, production and water data.

800 VDC rewrites AI data center power economics
News Release
ByJon Haubert

Enverus Intelligence® Research analyzes how 800 VDC architecture could lower AI data center electrical capex, improve facility efficiency and reduce copper intensity.

Enverus cuts U.S. EV adoption forecast due to federal policy changes and slower market growth
News Release
ByJon Haubert

Enverus Intelligence® Research’s latest EV forecast shows how slower U.S. adoption after federal tax credit changes shifts grid load timing, regional ISO exposure and ICE vehicle displacement through 2035.

At the cap, below CONE Why PJM’s capacity market needs a reset
News Release
ByJon Haubert

Enverus Intelligence® Research finds PJM’s current capacity market may not support financeable new gas generation at today’s capital costs. The report analyzes the capacity-price levels and bilateral contract structures needed to make new CCGT projects viable.

ERCOT Large Load Batch Zero Readiness
News Release
ByJon Haubert

Enverus Intelligence® Research analyzes ERCOT’s Batch Zero large-load qualification, estimating that 55 projects (21.7 GW) are positioned to meet the July 15 requirements while 62 projects (37 GW) are likely deferred to Batch 1+. The report outlines key deadlines, financial-security...

What’s next for the Strait of Hormuz?
News Release
ByJon Haubert

Enverus Intelligence® Research’s latest Strait of Hormuz outlook highlights a stocks-driven “higher for longer” setup, modeling OECD crude and product inventories falling from 2.82 Bbbl (YE25) to a 2.36 Bbbl trough in Q4 2026. The report also flags a potential...

Let’s make a deal Brent upgraded, Henry Hub downgraded
News Release
ByJon Haubert

Enverus’ latest Fundamental Edge report, “Let’s Make a Deal | Brent Upgrade, Henry Downgrade,” raises its 2H26 Brent forecast to $110/bbl on a late-June deal and gradual Strait of Hormuz reopening while maintaining a capped summer Henry Hub outlook and...

Class VI approvals build, submissions slow
News Release
ByJon Haubert

Enverus Intelligence® Research’s Class VI Update 1Q26 finds approvals building while submissions slow: three final permits issued in 2026 so far, five draft permits in 1Q26, and active Class VI injection capacity at 5.2 mtpa with forecasts above 100 mtpa...

Find Out How Enverus Can Help Your Business
Subscribe to the Energy Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Get Started

Sign up for our Blog

Ready to Subscribe?

Ready to Get Started?