Natural gas is the power sector's must-have

Natural gas is the power sector's must-have

Natural gas is the hottest sector in energy and AI.

Why it matters: Utilities, investors and data centers are spurning renewables-only players for gas' promise of around-the-clock power.

Driving the news: London's National Grid on Wednesday announced it's investing $1.75 billion for a 35% stake in U.S. gas plant developer Joulent.

  • The deal reflects a sea change in energy investment.
  • "I wouldn't call it renewables-plus-gas anymore. It's people willing to do gas — and if you can toss in some renewables in, that's great," one investor tells Axios Pro.

    • Case in point: Seven of the year's 10 biggest equity investments in the U.S. power sector have involved energy providers with natural gas.

  • "Integrated gas and renewables is commanding a premium," an energy-focused banker tells Axios Pro. "Not so much renewables-only."

    • Zoom in: Two developments have burnished natural gas' prospects.

  • Data centers want increasing amounts of 24/7 electricity, and developers discovered that reciprocating engines can solve the years-long backlog for natural gas turbines.
  • These engines — once used in niche roles like converting landfill gas to electricity — can be used in place of conventional gas turbines.

    • The bottom line: "It eliminates the uncertainty," the investor says. "'As quickly as you can build your data center, I can provide the power.'"