The German power producer revealed in its latest earnings report that it earned €225 million ($265 million) from the sale of an idle site in the UK to a hyperscaler. The buyer was not disclosed, but the transaction underscores the growing trend of data center operators seeking out existing power plants for their operational needs.
These locations offer a strategic advantage as they are often still connected to the grid, reducing the need for costly infrastructure upgrades. RWE’s stock performance has been strong, with investors and analysts anticipating further deals with data centers. The company is currently in talks for 10 additional transactions across the UK, Germany, and the Netherlands.
While the buyer of the site remains undisclosed, Deutsche Bank analysts Olly Jeffery and James Brand project a promising future for RWE in this sector. They estimate a potential €1.6 billion opportunity based on the implied multiple from the Amazon deal, with further deals expected to amount to €900 million by 2030.
The trend of utilities exploring partnerships with data centers is not unique to RWE. In the US, companies are looking into new nuclear plants to cater to the long-term energy needs of data centers. UK’s Drax Group Plc is embarking on a plan to develop one gigawatt of data center capacity at its northern England plant, set to be operational by 2027. Similarly, Iberdrola SA is considering a joint venture in Spain to provide electricity and grid access to a data center project.
In a previous deal in 2024, RWE sold land in the Rhineland lignite mining area to Microsoft for the construction of a large data center. These collaborations signify the evolving landscape of energy and power integration within the data center industry.
