In 2025, Energy Mergers Got Bigger — and More Strategic

The U.S. energy and utility industry experienced an unprecedented surge in mergers and acquisitions in 2025, driven by large-scale deals that point to deeper structural shifts in how power companies position for future demand, electrification and grid reliability.

According to PwC’s U.S. Deals 2026 Outlook: Power & Utilities report, total deal value in the sector surged nearly fivefold, rising from roughly $28 billion in 2024 to nearly $142 billion in the 12 months ending November 2025.

Although the number of transactions rose only modestly — from about 30 deals in 2024 to 35 in 2025 — the size and strategic significance of those deals took center stage. Several high-value mergers transformed the landscape, reflecting a rush toward scale and strategic positioning in an increasingly complex energy ecosystem.

Among the most notable was Constellation Energy’s roughly $29 billion acquisition of Calpine, which consolidated dispatchable power generation assets in a market where reliable supply remains a premium. Another major deal saw NRG Energy purchase assets from LS Power for about $12.5 billion, underscoring the ongoing focus on firm generation capable of supporting robust demand.

Industry executives say these moves are not just about size — they reflect deeper trends redefining where energy companies see value.

What’s Driving the Surge?

PwC’s analysis highlighted a mix of market forces fueling the wave. Rising electricity demand — especially from data centers, electrification of transport and industry, and artificial intelligence workloads — is pushing buyers to secure generation capacity that can deliver power reliably.

As consumption grows, utilities — both regulated and competitive — are seeking scale and diversified asset portfolios to navigate grid reliability challenges and capital-intensive infrastructure needs. Utilities are streamlining portfolios while infrastructure funds and strategic investors target long-duration yield assets, including generation and transmission.

Put simply, buyers are chasing balance sheet strength and operational scale to meet both near-term demand and long-term energy transition objectives.

Natural Gas and Dispatchable Generation in Focus

A key takeaway from 2025’s activity is the renewed interest in dispatchable generation — particularly natural gas assets. Even as renewables continue to grow, industry leaders note that existing gas plants — with immediate operational capability — remain more cost-effective than building new capacity, especially when facing tight timelines and soaring demand from hyperscale computing facilities.

Data center operators, for instance, want fast access to reliable, uninterrupted power, and with the long lead times required to permit and construct new plants, acquiring existing generation assets has become a pragmatic option. That urgency helped sustain high valuations for firms with existing natural gas portfolios.

Still, some analysts caution that this gas-focused boom cannot last indefinitely — eventually, the pool of attractive gas assets will diminish, prompting dealmakers to pivot back toward renewables and broader portfolios.

Renewables: Slower Volume, Higher Value

While the aggregate number of renewable deals in 2025 declined relative to the previous year, the value of those transactions actually doubled, according to PwC data. Deals involving renewable assets grew from $6.9 billion to about $12.5 billion, even as uncertainty around federal policy — notably the impact of the One Big Beautiful Bill Act — tempered some investor enthusiasm.

Some market observers suggest that renewable asset owners delayed sales in hopes of higher future valuations, contributing to the slowdown in deal count last year. But stabilizing market valuations could see renewables reaccelerate in 2026 as part of broader portfolios or stand-alone platforms.

Looking Ahead: Momentum Into 2026

PwC’s outlook suggests that elevated deal activity is likely to persist into 2026, even if the composition of deals changes. Strategic buyers remain focused on securing energy infrastructure capable of meeting both urgent reliability requirements and long-term growth in electrification and digital loads.

For companies navigating this landscape, the takeaway is clear: scale, reliability and strategic positioning are now table stakes — and mergers are emerging as a key tool in achieving them. As the demands on the grid continue to intensify and technology reshapes consumption patterns, the deals inked today could define the energy system of tomorrow.