National Grid Ventures Invests $1.75B in Joulent for 2.67GW Gas Plant Powering Microsoft Texas Campus
- National Grid Ventures is paying $1.75B for a 35% stake in Joulent, an Engine No. 1 portfolio company focused on co-located power generation for data centers [1]
- Joulent's flagship Project Kilby is a 2.67GW natural gas facility in West Texas that will power a 2GW Microsoft data center under a 20-year PPA [2]
- Chevron is a 50/50 development partner on Project Kilby, with GE Vernova supplying primary turbines and Solar Turbines (Caterpillar) providing additional capacity [3]
- First power delivery is expected in 2028, with the investment incremental to National Grid's £70B five-year capital program through 2031 [1]
- The facility will deliver electricity directly to Microsoft without initially connecting to existing transmission infrastructure [3]
National Grid Ventures (NGV), the commercial arm of UK-listed National Grid (NYSE: NGG), announced on July 1 that it will invest $1.75 billion for a 35% stake in Joulent LLC, a U.S. power infrastructure developer founded by activist investment firm Engine No. 1. The investment is designed to accelerate Joulent's pipeline of co-located gas-fired power plants purpose-built for hyperscale data center loads [1].
The anchor asset is Project Kilby, a 2.67GW natural gas generation facility in the Permian Basin region of West Texas. Chevron (NYSE: CVX) is a 50/50 development partner on the project, which will supply electricity to a 2GW Microsoft (NASDAQ: MSFT) data center campus under a 20-year power purchase agreement signed in June 2026. First power delivery is targeted for 2028 [2][3].
The deal marks one of the largest single investments by a traditional utility into the behind-the-meter power generation model that is increasingly favored by hyperscalers seeking to bypass constrained grid interconnection queues. National Grid CEO Zoë Yujnovich characterized the investment as "a disciplined, partner-led investment in contracted critical infrastructure for the AI-driven large load economy" [1].
The Deal
National Grid Ventures' $1.75 billion buys a 35% minority stake in Joulent, which will continue to be managed by its founder and CEO Chris James, previously of Engine No. 1. The investment is incremental to National Grid's existing five-year capital program of at least £70 billion (~$90 billion) through 2031 and will be funded from the group's balance sheet headroom [1].
James said the capital injection "strengthens Joulent's ability to deliver reliable, large-scale power on the timelines AI infrastructure and advanced industry now require" [1]. A final investment decision on Project Kilby is expected later in 2026 [1].
Project Kilby: Capacity & Technology
Project Kilby will generate approximately 2.67GW of dispatchable power from a co-located natural gas facility spanning more than 2,000 acres in the Reeves County area of West Texas [3]. The majority of generating capacity will come from large-frame GE Vernova 7HA gas turbines, with additional capacity from Solar Turbines, a wholly owned subsidiary of Caterpillar [3].
The facility is designed to deliver electricity directly to Microsoft's adjacent data center campus without initially flowing through existing transmission infrastructure — a behind-the-meter configuration that sidesteps grid interconnection bottlenecks. Surplus power could eventually be sold to the broader ERCOT grid through future interconnection agreements [3].
Environmental controls include selective catalytic reduction systems to minimize NOx emissions, use of non-potable brackish groundwater rather than freshwater for cooling, and exploration of produced water reuse from nearby oil and gas operations [3].
The Partners
Joulent was incubated within Engine No. 1, the San Francisco-based activist investment firm best known for its 2021 proxy fight at ExxonMobil. The firm had previously partnered with Chevron and GE Vernova on a 2025 announcement to deliver up to 4GW of "power foundries" for U.S. data centers — Project Kilby is the first concrete manifestation of that pipeline [3].
Chevron's participation runs through its Energy Forge One subsidiary, which holds a 50% stake in the Kilby development. Microsoft, the power offtaker, has been expanding its data center footprint aggressively to support Azure and OpenAI workloads. Microsoft Cloud President Noelle Walsh said "AI and cloud advance at a pace requiring closer coordination between energy and infrastructure" [1].
National Grid brings operational expertise in high-voltage networks and system integration. The company expects to connect more than 10GW of demand across the UK and U.S. within five years, positioning the Joulent stake as a growth platform beyond its regulated utility base [1].
Market Context
The deal underscores the accelerating trend of hyperscalers contracting directly with fuel suppliers and power developers to secure dedicated generation, bypassing grid queues that can stretch five to seven years in congested markets. ERCOT's West Texas region, while rich in wind and solar resources, has limited firm generation and transmission capacity to serve multi-gigawatt loads.
National Grid shares (NGG) traded at $82.85 on the NYSE as of July 3, up 3.3% on the session and roughly 1.5% above their 200-day moving average of $81.62. Chevron (CVX) traded at $169.21. Microsoft (MSFT) was at $390.49 [4].
Joulent claims a multi-gigawatt pipeline of future projects beyond Kilby, though locations and offtakers have not been disclosed. The phased, modular design of the Kilby facility is intended to allow incremental expansion as Microsoft's data center load scales [3].
What's Next
The final investment decision on Project Kilby is expected before year-end 2026, with construction mobilization to follow shortly after. GE Vernova turbines and EPC capacity have already been reserved, reducing execution risk on the 2028 delivery target [1].
Regulatory approvals at the state and local level in Texas are still pending. The project's behind-the-meter design may simplify permitting relative to merchant generation facilities that require full ERCOT interconnection, though air quality permits and land use approvals in Reeves County remain outstanding [3].
Further sources
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