- National Grid Ventures will invest $1.75 billion for a 35% stake in Joulent, a US energy platform building 2.67 GW of gas-fired capacity in West Texas to power AI data centres.
- The project, known as Project Kilby, will be jointly owned with Chevron and is backed by a 20-year power purchase agreement (PPA) with a Microsoft-operated data centre campus; final investment decision is expected by end-2026 with first power by 2028.
- National Grid sees the investment as an opportunity to earn returns above its regulated network businesses, reflecting the growing influence of AI on electricity demand.
Britain’s National Grid has turned to America’s data centre boom to diversify its revenues, with the network operator announcing it would invest $1.75 billion for a 35% stake in Joulent – a Texas-based platform formed by US oil major Chevron to develop and operate large-scale power projects for hyperscale computing campuses.
Joulent’s flagship venture, Project Kilby, plans to build 2.67 GW of natural gas generation next to a new Microsoft data centre campus in West Texas. The plant will supply the centre under a 20-year PPA, offering certainty at a time when surging AI workloads are stretching North American grids.
The investment is National Grid’s first major foray into merchant generation. Chief executive John Pettigrew told analysts that demand from AI and cloud computing clients is rising so rapidly that more than 10 GW of new grid connections are needed in the UK and US over the next five years.
Joulent says AI-driven electricity demand rose by 17% in 2025, far outpacing overall load growth of roughly 3%. Project Kilby will use GE Vernova combustion turbines and Solar Turbines gas engines, enabling a modular build so capacity can ramp up as data centre phases come online. Joulent has already secured critical equipment and expects to make a final investment decision by late 2026, with first power targeted for 2028.
The deal is structured as a 50-50 joint venture between Joulent and Chevron’s New Energies unit, with National Grid Ventures taking a minority stake. Chevron’s Jeff Gustavson said the project will run on locally sourced Permian gas and incorporate brackish water cooling and advanced emissions controls, reducing freshwater use and air pollution.
Microsoft, which operates the data centre campus, cited the reliability of gas-fired generation and its compatibility with high-density computing loads. Critics have warned that building large gas plants locks in carbon emissions, but Joulent counters that gas is a transitional fuel and the facility could later integrate carbon capture or hydrogen.
Feeding the AI beast
National Grid expects the investment to generate returns above its regulated networks, which typically earn 9-10%. The company plans to fund the stake from available balance sheet capacity and said cash flows should turn positive early in the next decade.
Analysts at JPMorgan noted the risk of cost overruns and market volatility but said the long-term PPA mitigates exposure. Project Kilby complements National Grid’s £70 billion network investment programme and signals that the company is willing to invest outside regulated assets to capture growth linked to AI.
More broadly, the deal illustrates how the AI revolution is reshaping power markets. Hyperscale computing hubs require vast amounts of electricity delivered with near-perfect reliability; many developers are now turning to dedicated gas plants because battery storage and renewables are not yet sufficient.
In the UK, grid operator ESO recently warned that data centre demand could require gigawatts of new capacity by 2030. National Grid’s move shows that infrastructure investors are betting on hybrid systems that combine gas, renewables and potentially carbon capture to meet the surging, location-specific load profiles of AI campuses.
As Europe debates how to fund long-duration storage and network upgrades, the Kilby project underscores the scale of private capital being mobilised in North America to build the power backbone of the digital age.
With returns tied to computing demand rather than regulated revenues, National Grid’s bet could be lucrative – but it also raises questions about ESG goals. Environmental groups argue that building new gas infrastructure risks undermining net-zero targets. Yet National Grid insists that the project provides the flexibility needed to integrate more renewables into grids dominated by intermittent sources.
The company also points out that some US states require firming capacity to allow new wind and solar projects to connect. Whether Kilby becomes a model for future projects will depend on how quickly AI demand grows, how policy incentives evolve for carbon capture, and whether renewable-plus-storage solutions can scale fast enough to make gas redundant.
