National Grid Bets $1.75 Billion on AI Power Boom with Joulent Stake
The British grid operator is taking a 35% stake in a U.S. energy platform developing a 2.67-gigawatt gas-fired facility in West Texas, a direct wager that off-grid power for data centres will deliver returns above what its regulated networks can offer.
National Grid is investing $1.75 billion for a 35% stake in Joulent, a U.S. energy platform that develops power infrastructure specifically for data centres, marking one of the most direct plays yet by a major regulated utility into the off-grid AI electricity market.
The deal will help fund Joulent's first project, a 2.67-gigawatt gas-fired facility in West Texas called Kilby. That project sits inside a 50/50 partnership with Chevron and will supply a Microsoft-operated data centre campus under a 20-year power purchase agreement. Critical equipment has already been secured, including GE Vernova turbines and reserved engineering and construction capacity, with a startup target of 2028.
J.P. Morgan analysts told clients they expect returns from the investment to exceed the 9% to 10% return on equity that National Grid's regulated networks typically achieve, reflecting what they called a slightly higher risk profile. National Grid said the investment would be incremental to its existing £70 billion five-year capital programme through fiscal 2031 and would be funded from its balance sheet, with no impact on its current financial standing.
National Grid shares dipped 1.4% following the announcement, though the strategic logic is clear enough. AI-driven electricity demand from data centres grew 17% in 2025, vastly outpacing the 3% growth in overall global electricity consumption. The company already expects to connect more than 10 gigawatts of data centre load across the UK and the United States over the next five years, and the Joulent stake effectively lets it capture value on both sides of the meter, building the connections and owning a slice of the generation.
A final investment decision on the Joulent stake is expected by the end of 2026, and the platform is projected to turn free cash flow positive in the early 2030s.
BuiltWorld AI Operational Take: A regulated grid operator putting $1.75 billion into an off-grid gas plant is not a side bet. It signals that utilities are starting to see the AI load forecast as so large that waiting for interconnection queues and rate cases to play out would mean missing the wave entirely. For project teams, the takeaway is that the competitive set for behind-the-meter generation is widening beyond pure-play developers to include balance-sheet-heavy incumbents who can fund construction without waiting for project finance to close.