By Mella McEwen,Oil Editor
Energy infrastructure is increasingly drawing investors’ attention.
According to the analytics firm Noreva, dealmaking in the power and utilities sector surged to $77.7 billion over the last year, up 79% from 2023. That’s even as higher rates and constrained capital reshape valuations.
The big trend of the last year or two has been large load migration to the energy corridor, according to Peter Gardett, who leads Noreva’s energy market forecasting.
Because it’s so difficult to build new pipelines or transmission lines, factories and data centers are moving closer to energy sources, affecting Permian Basin producers, he said.
“West Texas has been the point of origination and not the point of use. That’s made the West Texas economy dependent on natural gas prices,” he told the Reporter-Telegram.
This trend of moving closer to the energy source is a leap forward that will create value on the ground, a positive development, he added.
Gardett pointed to Dallas, which he said sits at the intersection of high-quality cable able to support data systems and is adjacent to natural gas supplies. That, he said, makes it less worrying that natural gas prices are under pressure from increased supplies.
He also noted that as factories and data centers move closer to energy supplies, “They’re bringing their own infrastructure with them. It’s BYOG — bring your own generator. If you look at Stargate, the flagship data center near Abilene, those have their own turbines. All they need are connections to natural gas.”
For many years, intermittent sources of power — wind and solar — have been promoted. There is now a renewed emphasis on dispatchable energy. Gardett noted that while many companies have announced plans, action is now being taken to make those projects a reality.
The P&U sector is being reshaped not only by growing demand from data centers but shifting federal energy policy.
There is more openness to permitting natural gas and natural gas assets, he explained. Increased assets could drive down capacity prices.
“One of the things we see next is demand for transmission to move power across the border,” he said. There could be the launch of new transmission lines to move power generated in Texas west into New Mexico. Gardett predicts there will be new pressures to build lines to bring that power generated by Texas natural gas to other states.
Source: https://www.mrt.com/business/article/energy-deals-texas-data-centers-21155684.php
