By David French
(Reuters) -The unit of Blackstone (NYSE:BX) dedicated to investments in the energy industry has agreed to acquire Potomac Energy Center, the asset manager told Reuters on Thursday, in a deal symbolizing the allure to investors of power plants sited near data centers.
Blackstone Energy Transition Partners has agreed to buy the 774-megawatt natural gas-fired power plant in Loudoun County in northern Virginia, according to a statement.
The statement gave no financial details, but sources familiar with the matter said Blackstone is paying around $1 billion for the facility. Fellow investment firm Ares Management (NYSE:ARES) has owned the plant since 2021.
Potomac Energy Center is situated in the area of northern Virginia outside of Washington D.C. which is estimated to have around a quarter of the current U.S. data center capacity.
This proximity was one of the reasons why Potomac Energy Center was so attractive, according to Blackstone Energy Transition Partners' Senior Managing Director Bilal Khan.
"This opportunity is unique," Khan told Reuters. "Not only for its location and its unparalleled access to data centers in Virginia, but also for the efficiency of the plant and the young age of the facility."
The plant was built in 2017.
The boom in artificial intelligence and data centers is driving power demand to record levels, with growth expected to persist for the rest of the decade. This is making generation assets increasingly attractive to buyers, especially so for gas-fired power plants which can provide the consistent power output that data centers require.
Earlier this month, Constellation Energy (NASDAQ:CEG) agreed the $16.4 billion purchase of Calpine. The largest U.S. power deal in nearly two decades is aimed at adding Calpine's predominantly gas-fired fleet to Constellation's existing generation mix which is majority nuclear power.
Blackstone has been investing, across a number of strategies, into both data centers and the energy infrastructure powering them. In September, it agreed a $16 billion deal to buy Australian data center operator AirTrunk, while AI cloud platform CoreWeave said in May it raised a $7.5 billion debt facility from investment firms including Blackstone.