AI data centers drive premium pricing for immediately-available grid power, reshaping power market economics.
As AI accelerates electricity demand, utilities and infrastructure investors are paying a growing premium for existing generation that can reach the grid faster than new projects. With permitting bottlenecks, equipment shortages, and interconnection backlogs pushing out timelines, the market is increasingly buying operating power plants rather than waiting for new capacity to come online. According to a new Deloitte report, buyers are willing to pay higher prices for what the firm calls "deliverable capacity"—operating generation that can be secured at scale and energized quickly despite tightening reliability, capital, and execution constraints.
"It has become critical because US power demand is rising due to AI-driven digital infrastructure expansion and electrification, while new generation and grid infrastructure remain slow and costly because of permitting delays, interconnection backlogs, supply chain constraints and capital needs," said Thomas Keefe, vice chair and US Power, Utilities & Renewables leader at Deloitte.
In 2025, economics and timing tilted decisively toward acquisitions. US power and utilities announced nearly $142 billion in transactions during the year, with a pronounced shift toward portfolios of operating generation over greenfield development. Capital costs for new generation have risen sharply—gas plants in particular increased roughly 40% between 2015 and 2025, according to Brynna Foley, an investment research analyst covering power and renewables at Enverus. Combined with permitting delays, interconnection backlogs, and supply-chain constraints, those costs have made existing assets far more attractive.
Valuations reflect the premium. Transaction multiples in 2025 were nearly double 2024 levels, even as operating plants in many cases continue to trade below the cost of building comparable new generation. "That creates a kind of 'buy-to-build' premium," Foley said.
Natural gas has anchored this strategy. According to Deloitte, 62 GW of gas-fired generation changed hands in 2025, representing 43% of all generating capacity transacted that year. Gas-sector deals totaled nearly $89 billion across 23 transactions, reflecting investor preference for dispatchable, grid-connected assets with near-term energization. The premium extends beyond the megawatts themselves to the rights and infrastructure enabling rapid deployment—generation assets, interconnection rights, transmission access, and speed to energization. "Data center developers are increasingly favoring time-to-power," Foley noted.
This emphasis is fueling behind-the-meter strategies, in which generation is sited at or adjacent to a facility to reduce reliance on congested grid upgrades, and "bring-your-own-generation" approaches, where developers procure or control dedicated generation to serve new campuses. The goal is to shorten timelines and de-risk schedules for hyperscale deployment. Throughout 2025, energy intelligence platform Enverus observed a wave of acquisitions involving independent power producers and private investors, particularly in PJM Interconnection and the Electric Reliability Council of Texas (ERCOT). Transaction activity has slowed more recently, though. Foley attributed this partly to large independent power producers completing major 2025 deals and focusing on balance sheets, as well as a shrinking supply of high-quality premium portfolios. "There are only so many of those high-quality portfolios in the market," she said.
Even so, investors are expected to continue favoring acquisitions while the "buy-to-build" premium persists. The economics differ sharply between merchant generators and regulated utilities. Merchants benefit directly when tight markets lift energy margins, capacity values, and contracted cash flows. Regulated utilities, by contrast, earn an authorized return on their rate base; most fuel and energy costs pass through to customers, and regulators scrutinize acquisition premiums. "When a utility buys an existing generator, commissions will often disallow the acquisition premium unless you can show a clear ratepayer benefit," Foley said.
That dynamic can steer utilities toward transmission, substations, and other grid investments that support reliability and integrate future resources, even as the same AI-driven load growth boosts merchant asset values. Looking ahead, Keefe expects ownership to continue concentrating. "Power ownership is expected to continue to concentrate among large, well-capitalized participants that can assemble balanced portfolios delivering capacity with speed, certainty and durable cash flows." As AI-driven electricity demand outpaces the pace of new interconnection, existing generation is becoming more valuable not simply because it produces power, but because it can deliver it years sooner.