NEW YORK: Talen Energy is focused on capturing surging demand from data centre developers as the independent power company looks to pivot away from its crypto mining operation, company executives say.
Talen is among a group of US electric companies benefiting from the power needs of artificial intelligence and cloud computing data centres, with shares of Talen up nearly 100% since the start of the year.
“It’s not a strategic asset for us and we are looking at other alternatives,” Talen Energy chief executive officer Mark McFarland said of the crypto mining business on a second-quarter earnings call.
Reuters reported earlier this month that Talen was looking to sell its stake in a bitcoin mining centre at the site of a Pennsylvania nuclear power plant
Talen raised its earnings and free cash flow forecasts for the year as it benefits from higher power use and prices, bigger payments from regional grid operator PJM Interconnection and a payout for a data centre sold to Amazon.com early this year.
Talen revised up its adjusted earnings before interest, taxes, depreciation and amortisation range for 2024 to US$720mil to US$780mil, from US$600mil to US$800mil previously.
Its free cash flow estimate for the year was revised to US$245mil to US$285mil, from US$160mil to US$310mil previously. The company benefited from unseasonably warm weather in the three months ended on June 30, among other factors.
Talen expects to receive US$670mil from capacity revenues for the 2025-2026 planning year, or US$470mil more than the previous year, following a capacity auction in the PJM market.
Talen also plans on US$300mil of Amazon data centre campus escrow to be released in the third quarter.
The data centre is at the centre of a battle between Talen and electric utilities, American Electric Power and Exelon, which say the build-out to connect the centre could raise costs for everyday power customers.
The Federal Energy Regulatory Commission (FERC) is reviewing the amended interconnection service agreement for the centre, and will hold a technical conference this fall more broadly on what are known as co-located data centres, in which data centres are located at the power plant sites that fuel them.
McFarland said he was optimistic FERC would approve the amended agreement. — Reuters
