“The transformation of Energy into Intelligence is one of the most profound economic shifts we will likely witness in our lifetimes, and the transformation is only in the initial phase” of shifting leadership toward a new group of winners that include nuclear and natural gas independent power producers such as Constellation Energy (NASDAQ:CEG), NextEra Energy (NYSE:NEE), NRG Energy (NYSE:NRG), Talen Energy (NASDAQ:TLN), and Vistra (NYSE:VST), Melius Research said in a new report Wednesday.
The IPPs are perhaps the best positioned to benefit from surging electricity demand from electrification and the data center buildout, Melius said, noting these companies are more agile than regulated utilities and can quickly respond to market needs, which is increasingly
important in the budding data center/AI infrastructure buildout boom.
Constellation (NASDAQ:CEG) is the leading provider of nuclear power and generates ~10% of all the power generated in the U.S., and Melius said the Calpine acquisition will strengthen its already formidable market presence.
NextEra Energy (NYSE:NEE) combines two business models – a regulated utility (Florida Power & Light) with an IPP arm (NextEra Energy Resources) – and is the world’s largest provider of renewable energy, investing heavily in batteries, hydrogen and grid modernization.
NRG Energy (NYSE:NRG) has an integrated generation and retail model supplying 16 GW of generation capacity including natural gas, coal, nuclear, solar and wind, and supplies more than 8M residential and business customers.
Talen Energy (NASDAQ:TLN) has implemented a strategic transformation following bankruptcy in 2022, investing in data center-powered energy solutions, aligning with the rise of AI and cloud computing, and is repurposing legacy fossil sites for digital infrastructure rather than
retiring them.
Vistra (NYSE:VST) is a major player in the power markets with 41 GW of generation capacity including generation from nuclear, natural gas, coal, and solar, and it owns the Moss Landing energy storage facility in California, one of the world’s largest battery storage systems.
Melius said natural gas will be the primary reliable energy source for the electrification surge and the growth in power demand, which will occur in a variety of ways such as newbuild natural gas power plants, co-location of newbuilds with data centers, and significant growth in the trade of liquefied natural gas, with Henry Hub gas for 2026 forecast at $3.50/MMBtu and for 2027 at $4.00/MMBtu.
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