2025 marks a turning point with surge in mega deals and focus on dispatchable power in US utilities sector

After several years of steady but restrained dealmaking, 2025 marked a clear inflection point for the U.S. power and utilities sector as mergers and acquisitions surged in value and strategic focus shifted toward reliability and firm power.

According to PwC, total announced power and utilities deal value reached $141.9 billion across 35 transactions in the 12 months ending November 2025, up sharply from roughly $28 billion the year before. The increase was driven not by a broad swell in volume but by a handful of very large transactions. “The biggest change in 2025 as compared to 2024 was the return of the mega deals and some large consolidation blows,” said Kyle Long, PwC’s U.S. Energy, Utilities and Resources Deals Leader, in an interview with Factor This Power Engineering.

Large, reliability-focused acquisitions dominated the headlines. Constellation’s $29 billion takeover of Calpine and NRG Energy’s $12.5 billion purchase of LS Power exemplify the market’s renewed appetite for scale and dispatchable capacity. Industry data shows independent power producers accounted for an outsized share of activity, rising to 31% of deal activity in 2025 from 12% in 2024, reflecting buyers’ desire for assets that can be operated flexibly to meet volatile, fast-growing loads.

A pronounced tilt toward dispatchable generation emerged over the year. Renewable deal volume declined modestly, from 13 transactions in 2024 to nine in 2025, yet total renewable deal value rose, underlining a trend toward fewer but larger renewable transactions alongside a broader pivot to gas-fired and other firm resources. “There was a big push this year towards more dispatchable generation,” Long said. “Certainly the deal thesis for [Constellation, NRG deals] centered on data center demand growth and the ability to secure the dispatchable generation in order to meet that market demand.”

Policy shifts complicated the renewables landscape. Federal changes that scaled back production and investment tax credits for wind and solar while extending incentives for storage and nuclear altered financing timelines and deal structures, moderating, not eliminating, renewables activity. From a capital-planning standpoint, gas-fired generation continues to be treated as a pragmatic bridge: “Anything we can do to maintain those assets, I would certainly think would be in the capex plans,” Long added.

Underlying these corporate moves is the accelerating load growth driven by data centres and artificial intelligence. PwC and dealmakers cast data centre expansion as the defining demand-side force shaping generation strategy heading into 2026. “The market’s really just a demand play, at least in the short term, until the forecast related to data center growth and AI growth crystallize a little bit better,” Long said.

Alphabet’s acquisition of Intersect Power for $4.75 billion on 22 December is already being treated as a warning shot across the industry about how hyperscalers may change the game. According to The Associated Press, Alphabet said the purchase will help secure diverse and sustainable energy for its data centre network; Intersect will continue to operate independently after the deal closes in the first half of next year. Forbes and TechCrunch report the transaction includes multiple gigawatts of generation and development projects and signals a wider move by cloud giants from pure procurement to direct control of energy development to accelerate power delivery and bypass grid bottlenecks. Energy Connects reported that Intersect has about 7.5 gigawatts of solar and storage in operation and roughly eight gigawatts in its development pipeline, with substantial exposure in Texas, a prime data-centre region.

The Intersect deal highlights several new deal motifs: co-located and behind-the-meter solutions, acquisitions of development platforms and talent, and carve-outs that leave some contracted assets outside the purchase. According to Energy Connects, some grid-connected assets contracted to other customers will remain separate from the sale, and investors such as TPG Rise Climate will retain stakes in non-transferred holdings. TechCrunch observed that the move helps hyperscalers reduce reliance on strained local utilities and secure capacity at pace.

These shifts carry local and policy implications. The AP reported that rapid data-centre buildouts have sparked community concerns about rising local electricity costs in hosting regions such as parts of Texas, even as companies stress the importance of diversified and sustainable supply for AI workloads. The Washington Post noted the strategic calculus for tech firms: owning development capability can accelerate project timelines that are otherwise slowed by interconnection queues and grid constraints.

Looking to 2026, PwC expects overall deal volume to remain broadly steady even if aggregate transaction values moderate after an unusually large 2025. Deal agendas are likely to shift from large-scale consolidation toward targeted arrangements that secure firm power close to major loads. For generation executives, priorities will include life-extension and emissions-control investments, siting and interconnection strategy, and monitoring how changes in ownership affect operational flexibility and contractual commitments.

For an industry confronting relentless load growth and heightened reliability expectations, the message entering 2026 is plain: capital is increasingly chasing assets and partnerships that can deliver firm, dispatchable power at scale and on predictable timelines where demand is rising fastest. The year’s mega-deals have reset the terms of engagement between utilities, independent power producers and hyperscalers, and the reverberations will shape investment, policy and community debates as the sector adjusts to a new demand profile driven by AI and cloud infrastructure.