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BFD Expert Voices - Climate Deals

BFD Expert Voices

HOUSTON — "Uncertainty around the IRA makes people nervous in ways that you don't have with fossil fuels," NRG Energy president and CEO Larry Coben tells Axios in an interview at CERAWeek.

Why it matters: Changing government approaches to green energy have utility executives and investors prioritizing gas over renewables and batteries.

The big picture: About 48% of NRG's 13 GW portfolio is made up by natural gas, and another 41% by coal. Renewables are about 1% of its portfolio, although it has reportedly signed contracts to buy 2.4 GW of green electricity from others.

Between the lines: The company hasn't deviated from its pledge to go net-zero by 2050, Coben says. But it announced a partnership in February to build 5 GW of new natural gas power to meet surging demand from data centers.

What they're saying: "This is what we were planning to do, regardless of who won the election," Coben says.

This interview was edited for length and clarity.

Given the years-long wait for gas turbines, and rough cost parity with renewables-plus-batteries, why natural gas?

"There are still issues with longer-duration storage. Data centers run 24/7 — when are you going to recharge the batteries?

We will have more batteries in our system. But if you're in a high-peak period for a number of days, even eight hours doesn't do it unless you're putting a lot of them in."

With federal policy changing so rapidly, how are you making these investment decisions?

"Data centers will be contracted with creditworthy entities, so the risk of change will belong to the people using the power. Two, if you look at the Texas market today, we can't build enough gas-fired plants to get close to meeting demand.

For a company like ours that's been in 0% growth, 3% is a demand supercycle."

What are the biggest pinch points to investment and deployment?

"It's a four-year minimum for turbines and transformers. Labor shortages, there's just not enough people who have experience.

The biggest thing that's going to stop people from adding renewables is uncertainty. Are you going to get your tax credits? Your loans? Is there going to be an executive order that says, 'We're not going to recognize the IRA?' You can litigate for two years, but that's devastating."

Policy upheaval drives natural gas resurgence

NRG Energy president and CEO Larry Coben speaking at a conference in Houston.

NRG Energy president and CEO Larry Coben, speaking at last year's CERAWeek by S&P Global conference. Photo: Aaron M. Sprecher/Bloomberg via Getty Images

HOUSTON — &quot;Uncertainty around the IRA makes people nervous in ways that you don&#x27;t have with fossil fuels,&quot; NRG Energy president and CEO Larry Coben tells Axios in an interview at CERAWeek.Why it matters: Changing <a class="gtmContentClick" data-vars-link-text="government approaches" data-vars-click-url="https://www.axios.com/pro/climate-deals/2025/03/11/ceraweek-2025-natural-gas-climate-tech" data-vars-content-id="a758c10e-8268-4826-af36-5a926de705d4" data-vars-headline="Policy upheaval drives natural gas resurgence" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/2025/03/11/ceraweek-2025-natural-gas-climate-tech" target="_self">government approaches</a> to green energy have utility executives and investors prioritizing gas over renewables and batteries.

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Policy upheaval drives natural gas resurgence

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