Babcock & Wilcox and Denham Capital Form Strategic Partnership to Repurpose Coal Plants for Data Center Power in U.S. and Europe
Babcock & Wilcox Enterprises, Inc. (“B&W”) (NYSE: BW), a global leader in energy and environmental technologies, announced today that it has entered into a strategic partnership with Denham Capital’s Sustainable Infrastructure division (“Denham”). The collaboration is designed to address one of the most pressing challenges in today’s energy landscape: meeting the rapidly growing electricity demand of data centers, particularly those driven by the expansion of artificial intelligence (AI), cloud computing, and digital services.
The agreement focuses on leveraging both companies’ strengths to deliver reliable, cost-effective, and lower-carbon power to data center developers in the U.S. and Europe. Central to the partnership will be projects that convert existing coal-fired power plants into natural gas facilities, while also integrating advanced environmental technologies to reduce emissions and enhance efficiency.
Bridging the Clean Energy Gap with Natural Gas
As the clean energy transition accelerates, one of the central dilemmas faced by policymakers, utilities, and developers is how to ensure sufficient electricity supply for industries that require 24/7 reliability. Data centers are at the forefront of this challenge. These facilities, essential to powering AI systems, cloud services, and digital infrastructure, consume vast amounts of electricity, often measured in hundreds of megawatts per campus.
While renewable energy sources such as wind and solar are expected to play a central role in powering the digital economy, their intermittent nature poses challenges for meeting constant demand. Large-scale storage solutions remain costly and are not yet deployed at the scale necessary to fully balance variable renewable output. Natural gas, therefore, continues to serve as a critical “bridge fuel,” providing dispatchable, lower-carbon power that can be quickly ramped up or down to match demand.
Through their partnership, B&W and Denham Capital plan to make substantial investments to convert legacy coal plants—many of which are underutilized or facing retirement—into natural gas generation facilities. This strategy not only provides a practical and timely solution to meet near-term energy needs but also reduces carbon emissions compared with coal, supporting broader decarbonization goals.
Combining Global Expertise
The partnership draws on the complementary expertise of both companies. Denham Capital, through its Sustainable Infrastructure platform, has developed, built, and operated more than 10 gigawatts of power generation capacity across six continents. The firm’s track record in financing and executing large-scale infrastructure projects positions it as a strong partner for navigating the complexities of global energy markets.
Babcock & Wilcox, on the other hand, brings nearly 160 years of experience in energy technology and project execution. Known for its innovations in power boilers, environmental systems, and fuel conversion, B&W has long been at the forefront of the energy sector’s evolution. Its capabilities in retrofitting and modernizing coal-fired plants are particularly relevant as data center developers and governments seek to repurpose existing energy assets rather than building entirely new plants from scratch.
Together, the two companies are ideally suited to deliver reliable and affordable power to hyperscale data center developers, while also advancing sustainable infrastructure.
Meeting the Surge in Data Center Demand
Industry experts have described the current demand for data center power as unprecedented, with growth rates not seen in nearly two decades. The boom in AI computing and large-scale cloud adoption has added immense pressure on electricity markets, with developers and hyperscalers racing to secure reliable capacity.
Justin DeAngelis, Global Head of Sustainable Infrastructure at Denham Capital, highlighted the urgency of the situation:
“Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades. Time-to-power is a key focal point for data center developers and hyperscalers, and this partnership is one differentiated tool we are looking to utilize to meet market needs.”
DeAngelis emphasized that the scale of the opportunity requires bold and rapid solutions. Denham will soon launch a dedicated portfolio company focused exclusively on delivering these types of power conversion and generation solutions to the data center sector.
“It is vital we leverage existing power fleets, decarbonize, and increase the quality and security of our power generation systems,” he added.
A Shared Vision for Energy Transition
B&W’s Chairman and Chief Executive Officer, Kenneth Young, echoed this vision, underscoring how the partnership will enable both companies to capture opportunities in the surging data center power market.
“This partnership brings two well-established, experienced teams together to quickly and effectively identify opportunities to leverage underutilized coal-fired power plants to provide affordable, reliable power for large-scale data centers,” Young said.
He pointed to the growing demand for dedicated electricity generation capacity, especially from the expansion of AI-driven computing infrastructure, as a major market driver.
“The rapid growth of AI and data centers is driving demand for new, dedicated electrical generation capacity for these facilities, and we see a tremendous opportunity to help customers meet their energy needs affordably and efficiently. With our vast experience and our broad suite of both traditional and new technologies, we are well-positioned to support the power demand from data centers and global AI growth now and in the future,” Young added.
Supporting the Long-Term Transition
While natural gas conversion will play a central role in the near term, B&W also offers a wide range of environmental and combustion technologies designed to reduce emissions and support cleaner energy generation. These include solutions for carbon capture, emissions controls, and advanced boiler systems capable of handling multiple fuel types.
By integrating these technologies into the conversion of coal plants, the partnership can not only deliver reliable power to data centers but also extend the useful life of existing assets while significantly reducing their environmental footprint.
In addition, both companies have expressed a commitment to aligning their work with broader decarbonization and sustainability targets. The strategy acknowledges that while renewable energy will eventually dominate the grid, the pace of data center growth requires transitional solutions that are both pragmatic and scalable.
