President, Chief Executive Officer & Chairman of the Board, NRG Energy Inc
Lawrence Coben, NRG Energy, on Collaboration and the Electricity Demand "Supercycle"
Rising electricity demand from AI, data centers, and electrification is reversing decades of flat load growth and reshaping power markets. In this episode, Lawrence Coben, Chair & CEO of NRG Energy (https://www.ceraweek.com/en/speakers/...) , joins Atul to discuss how energy providers are responding to a new era of accelerating demand, tightening capacity and growing infrastructure needs. The conversation examines how utilities, technology companies and large energy users are adapting—highlighting the growing importance of investment, partnerships and policy frameworks to ensure reliable and a...
About Lawrence Coben
Lawrence Coben, President, CEO, and Chairman of NRG Energy, discussed the company's progress on data center power agreements during the Q2 and Q3 2025 earnings calls. He announced long-term retail power agreements with a data center operator for 295 megawatts (MW), with potential to grow to 1 gigawatt (GW), and stated that the company raised its target for new long-term data center agreements to above $80 per megawatt-hour. Coben noted that NRG unveiled a 14% compound annual growth rate (CAGR) in earnings per share through 2029, which he said does not include any contribution from data centers and reflects pricing assumptions below current market levels. He also mentioned a 5.4 GW deal with GE Vernova and Kiewit, and said the company is looking at opportunities to expand that scale. Coben commented on regulatory developments, stating that Texas Senate Bill 6, signed into law in June, provides new tools to support reliability and long-term planning in the ERCOT market. He said policymakers are responding to affordability, additionality, and reliability concerns through initiatives like Senate Bill 6 and similar efforts in other regions. Coben also reported that NRG increased its 2025 target for the Texas residential virtual power plant from 20 MW to 150 MW of curtailable capacity, attributing this to faster-than-expected progress. Regarding the Gladstone asset in Australia, he described any potential value as "nominal at best" and said a sale would serve to simplify the portfolio and streamline operations.
Transcript (53 segments)
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Atul Arya0:06
Welcome to the CERAWeek podcast where the world's energy leaders and innovators share insights on the future of energy, technology, and climate. I am Atul Arya, chief energy strategist at S&P Global. In each episode, we dive into the critical issues and bold ideas shaping our energy future. So, let's get started.
Welcome back to CERAWeek podcast. So today we are back home in the United States and talking with a leader of one of the largest power companies in the country, Larry Coben, president, CEO, and chairman of the board of NRG Energy. In case you don't know, NRG, it's got operations both in Texas and on the east coast and a little bit in the Midwest and serving millions of customers and I think 25 gigawatts of generating capacity, meaning it's a very big company and we are very fortunate to have you Larry for the CERAWeek podcast. Welcome to CERAWeek.
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Lawrence Coben1:09
Thank you very much. Great to be here. CERAWeek is always one of my favorite weeks of the year. We're happy to be talking to you.
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Atul Arya1:14
Thank you very much. Maybe before we talk about NRG priorities, just for our audience, just give a perspective of where you are, what you're doing.
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Lawrence Coben1:23
As you said, NRG is one of the largest power companies in the country. We have a large presence in Texas. We have the biggest retail presence in Texas and we're one of the biggest generators here in Texas. We also have a very significant presence in the PJM market in the northeastern United States as well as in New York. A total of, as you mentioned, 25 gigawatts of capacity. We also are the largest retail to home provider in the state of Texas. We also have three million more customers retail in the northeast. We have the second largest security and smart home business in the country called Vivint. What we're really looking to do is be the soup to nuts energy solution provider for anything from households to data centers, providing you the most affordable and resilient solutions for your needs wherever you may be.
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Atul Arya2:13
You're in the hotbed of the data center alley here on the east coast as well as in Texas. But before we go there, what are your kind of key strategic priorities today for NRG?
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Lawrence Coben2:24
I think it really comes back to doing everything we can to serve our customers for affordable and resilient solutions. I think everyone is concerned about making sure that they have enough power and that it's affordable going forward. So that includes having the ability to provide capacity to data centers. For example, in that regard, we have the ability, we have turbine slots, we have EPCs lined up. We have an agreement with GE Vernova and Quanta to do another almost 6 gigawatts of additional capacity which would be dedicated to data centers. We also want to make sure that our residential customers have the ability to manage their homes exceptionally well. So we have a residential virtual power plant business which we're growing rapidly by working with you to adjust energy use in your home as well as with the acquisition of CPower. We now have a leading demand response business in the commercial and industrial space as well. But what it all ties to is providing people the power they need at the time they need it at a price they can afford. Doesn't matter whether we're talking about a household in Texas or one of the four or five big hyperscalers. The strategy is the same, obviously the implementation is different.
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Atul Arya3:36
Of course. Yeah. And I like the formulation of soup to nuts. So let's get into some of these details. You already touched on the data center. So tell us what's been going on the demand growth. What has been your experience over like last 18 months or so?
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Lawrence Coben3:49
We have seen an enormous amount of demand growth. It's really a super cycle. I've been doing power off and on for the last 40 years. We're seeing a demand side growth for electricity like we've never seen before. And we're just really, I think, in the early innings of understanding how big that is. This has been an industry where demand growth was somewhere between zero and 1% for a very long time. People always ask me how big is it now. And I don't know if it's 3% or 10% yet, but it's accelerating rapidly and 3% in this space when you think about the capital is enormous. 10% is hard to contemplate. I know that doesn't sound like much to people in Silicon Valley, but those are huge growth rates as you know in the energy space.
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Atul Arya4:33
Yeah. And I remind people going from a half a percent to 3% annual growth. That's a six times growth. It's not a small number, but a big multiplier, isn't it?
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Lawrence Coben4:42
Exactly. We have been working very hard and very rapidly to put ourselves in position to satisfy that growth for our customers. And I think we saw it coming. We were early in doing that. That's why we tied up turbines and EPC people because we knew at the end of the day that for data centers people were going to need to really bring their own power. That was the only affordable resilient solution. And I think now everyone else is coming to that conclusion as well. I think half the big AI companies have already said they're going to somehow cover the cost of additional power. The only way to do that is build your own power plant.
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Atul Arya5:18
You mentioned both hyperscalers and the turbine providers like GE Vernova. How is this changing the business model? Are you seeing sort of new types of business than you had said even 5 years back?
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Lawrence Coben5:31
Look, I think we started building our first new power plant since probably 2009 last year. So for a long time everybody had plenty of capacity. It was a commodity. It was a nice business to be in, but there wasn't a particular amount of demand growth. So, the first thing that you need to be able to do, and our teams have done a superb job, both keeping our team together and now operating, is being able to develop and construct new facilities. The second thing that's changed about the business is you're spending a lot more money on maintenance, but your plants are running more hours during the year. On the generation side, we're seeing that. On the residential side, we're seeing people looking for other ways rather than making expensive capital investments in things like solar panels, looking for ways to save money but still contribute environmentally or otherwise. And our residential virtual power plant is really doing that. We're really the only ones who have a residential virtual power plant at scale. So I think that's another thing that's changed is the integration of a smart home and energy together. We've created a series of new what we call smart energy bundles for the residential consumer. Third thing that we're seeing and because we have a very large gas trading business and gas desk procurement business is people now want to lock in their power prices for longer and we have the ability to do that for them in ways that others don't. So those are the three biggest changes that I would see and they all really tie to needing capacity, affordability and reliability/resilience.
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Atul Arya7:10
It's pretty interesting and I should emphasize for our audience that from 2009 to this really last year such a big long gap of building something new, isn't it? Is it pretty normal for other companies or your peer group as well?
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Lawrence Coben7:24
I think it's pretty normal. There have been occasional plants built but not a lot of capacity. We have under construction today that we just started in the last year 1.5 gigawatts and that's really for the grid. That's not even having to do with data centers which will be another we anticipate five to six but that 1.5 is under construction. The first one will come online in a few months. I'm looking forward to our first groundbreaking in 15 years.
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Atul Arya7:51
Very nice. Let's come to the consumer part of this. There prices are rising for power everywhere. I live in Massachusetts and one of the most expensive power places in the country. How are you addressing? Maybe you want to expand on your idea of the virtual power plants as well. Does that help with the pricing or no?
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Lawrence Coben8:08
It absolutely does because what you will find that if you are part of this program, you will save hundreds of dollars a year because you will be using less energy and actually be paid for using less energy under certain situations when there's peak demand. So what we're doing primarily is we already through our smart home business manage a lot of people's energy uses in their home anyway. And we say look we've noticed that this is when you're out of the house, this is when you're in the house, this is when your system is on, this is when it's armed away, you can make these kind of savings on energy. What we've done is take that kind of program that we had which over half of our smart home customers opt into and expanded it to our larger customer base to say look you could all be a part of this. And what we will do is let's say there's a tremendous amount of demand. We might change your temperature setting by 2 degrees for 15 minutes to do that across a lot of homes. That's a lot of power. And so the idea is for you not to really notice what we're doing, but for us to be able to use your unused capacity instead of turning on say apeaker power plant. I wrote an article a long time ago that said the cheapest, cleanest, most efficient megawatt hour is the one you don't produce and don't use.
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Atul Arya9:23
Exactly. Yeah. So this is interesting. So people are allowing you to manage their temperature remotely and has that been widely accepted?
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Lawrence Coben9:31
People are responding very well. There was recently in January of 2026, there was a storm here in Texas called Uri and people didn't even notice that we were doing it. And if people do notice, they always are free to opt out. Not that you're required. But most people probably don't even know until the check comes in the mail that it was done. Because we have so many homes, we can do it in smaller increments. We're not telling you turn off your heat or your air conditioning for 8 hours. We're saying adjust it by 2 degrees for 15 or 30 minutes. You won't notice the difference.
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Atul Arya10:03
Yeah. Most people will never know. Exactly. But as you say, if you do it for thousands of homes, that kind of adds up to real capacity, isn't it?
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Lawrence Coben10:10
Exactly.
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Atul Arya10:11
You touched on the turbine part, supply chains. Tell us about how you're thinking. I hear talking to people GE Vernova, MHI, and CMS Energy that if you want a new turbine, get in the queue. And it's a long queue.
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Lawrence Coben10:24
We got in the queue a long time ago. There's risk involved in getting in the queue before you know where the turbine is going to go. But we saw it was coming and strategically, we knew that if people weren't able to bring new power to the grid, there was no way that data centers were going to be able to be fed regularly in most markets from existing grids. Markets are too tight, at least for certain periods during the day. We got in the line and there were two things that were tight. It wasn't just turbines. It was also humans because when you have an industry with no growth, people leave it. So, there was only really three big turbine manufacturers left and a few big contractors left. What we did was make an arrangement with Quanta, who's a terrific contractor, to say, 'Okay, we're going to be building a series of these. We want it to be you. We're guaranteeing you the business. We have a framework around that. GE is part of this with the turbines so that we can bring you that soup to nuts solution.' And so we can bring power on in 2029 or 2030 because that's still how long it takes to build a new power plant. But that's, you know, if you got in the queue today, if you would be allowed to get in the queue because I think only regular customers could really get in the queue, you won't even get a turbine till 2032 or 2033.
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Atul Arya11:43
So long ride just on the arrangement you have with Quanta. So this is skills training, hiring people, all of that and I presume this is high paying, good paying jobs as well.
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Lawrence Coben11:53
Good paying jobs, soup to nuts general contracting IQ. So super excited about having them on our team. We may end up with agreements with some other turbine people and contractors because we're seeing extraordinary amounts of demand, but we know that we have five and a half gigawatts with those two.
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Atul Arya12:14
So now let's switch gears a little bit, Larry, to the grid because that's the other big elephant out there, isn't it? The grid's not really keeping up, at least not here in the US. So what needs to be done on the whole issue of fixing the grid, making it have more capacity, maybe adding more grid?
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Lawrence Coben12:31
I think it really depends on where you are. I think Texas is doing probably the best job of keeping up. It's hard to keep up though. It's like everything else when you have this used to be three people sitting in the back of the room who would occasionally get an interconnection request and now all of a sudden they're the most popular people in the world and it takes people a while to gear up and do that kind of work. I think utilities are doing it. I think that regulators are insisting that they do it, but there's no question that we need more and better grid. There's also a lot of people working on making the grid more efficient. A lot of people thought the solution was going behind the meter and not being connected. That's extremely difficult, especially because of the spikes in usage to absorb those demand shifts. You need a grid to do that. It's very expensive and very difficult to do that on your own.
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Atul Arya13:22
Yeah, we are seeing the hyperscalers are wanting to be connected, isn't it? They don't want a completely dedicated behind the meter plant. It's high risk as you say.
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Lawrence Coben13:30
Correct. No, it's very interesting. When people first started talking about it, the first deal that was announced was a kind of behind the meter nuclear deal and everyone said you can't be in this game as you don't have any nuclear plants and you don't think it could be done behind the meter. And I said, I've been doing this a long time. There aren't enough nuclear plants. Number one. And number two, you can't do it behind the meter technically in most situations. And number three, you're not going to be able to just yank power off the grid that belongs to current users, be they industrial, commercial, or residential, and just dedicate it to a hyperscaler. I think people looked at me kind of funny two years ago and now people think I'm a little bit smarter.
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Atul Arya14:12
Yeah. No, I think you were brilliant on that. Wanted to say that's not going to happen. Just on the policy side, there have been talk about permitting reform forever. Do you see that happening or is it still further away or maybe like nuclear fusion many years ahead?
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Lawrence Coben14:26
I hope it's not as long as nuclear fusion though. I was with somebody a couple weeks ago who told me it's right around the corner, but I think I was also told that in 1985, so I'm going to be a little bit skeptical. I think it depends where you are. Some jurisdictions are moving more quickly. The places where we are most frequently in PJM are spending a lot of time working on this and I think people are also moving to prioritizing people who are bringing their own capacity, their own power with them. I think that makes perfect sense because if you actually can bring your own power, you are a real transaction. A lot of what's in the queues are people who are hoping someday to do a data center or a power plant, not people who are actually ready to go ahead. So, I think you're going to see some permitting reform that will prioritize real projects that are bringing their own power. That seems to be directionally where both ERCOT and PJM are going. And I'm optimistic that in the next several months that's where they'll end up. Otherwise across the country it really depends on where you are.
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Atul Arya15:37
And also you kind of mentioned this earlier Larry that the hyperscalers may end up willing to pay a higher price isn't it in this whole system.
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Lawrence Coben15:46
If you're going to build your own power plant at least in the short term that's obviously going to make it more expensive than buying power from the grid. But the power from the grid's not available and power cost is even both of building and of operating a data center. It's actually a small part of the entire process. Yeah. If it cost you $2 billion to build a power plant, it's probably cost you 20 to build your data center. So, I won't say they're price insensitive because they're not. But as you think about looking at your total cost, this is not the driver of that. Speed to market is really the driver because they were using learning models and while they were training on those learning models that wasn't a revenue generator but now it's about inference that's a revenue generator so when you're not operating you're not making money if you're a hyperscaler.
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Atul Arya16:36
Yeah, that very good point. Just one other question on reliability of the system. I mean the US power system and where you operate in Texas and the east coast very reliable overall the country is very reliable. Are there things which can be done to make it even more reliable. There is talk about curtailment. If the power supply cannot keep up with the demand, what's your thought on that overall picture?
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Lawrence Coben16:58
I think we're going to see some new developments in software. I think people are going to start thinking about how to maximize every megawatt hour. It's like anything else. As your product becomes more valuable, people think about how to use it better. When it's cheap and free, you don't really think about saving it. When I was growing up, oh, first it was the ads were light a light and then of course in the 70s it became turn off every light in the house. I think we're in one of those periods again where it's scarcity and expensive so you're going to be in the grid equivalent of turn off every light in the house that you can. I think curtailment will be a part of this. That's why people are going to bring their own power plants so they can't be curtailed because I don't see how as a regulator or a politician you're going to stay in office if the data center is running and the houses and the businesses don't have power. That's an impossible thing politically. Only worse than high electricity prices is no electricity.
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Atul Arya17:54
Yeah, exactly. I can just say for our audience a story. I grew up in India and in the power business. My father built power plants and the thing I learned when I was six years old was the phrase load shedding. Every time power went off, we said, 'Oh, it's load shedding.'
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Lawrence Coben18:09
Not anymore. Not in the US.
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Atul Arya18:11
Sometimes it's load shedding and sometimes it's other things. So, we'll just leave it at that. Let's talk about electrification more broadly. We are seeing more and more electrification, not just the data centers, but there are other things. How far do you think it can go and what technologies? You have a pretty vast portfolio of generating technologies. What's your outlook for the future?
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Lawrence Coben18:31
Look, I think electrification is the future. People used to talk about electrification all the time until it was dwarfed by the conversation of data centers, but electrification is still continuing at a rapid rate. Yes, maybe people aren't buying electric cars quite as fast as people would have hoped, but they're still buying a lot of electric cars. Everything in your house is electrified. Heat is getting electrified more. Cooking is getting electrified and I think this is going to be a continuing trend across the US. New developments are all about electrifying the house. People want to be able to do everything with their smartphone. That means you have to have it all electrified. We see this within our business where on one app you can run your electric car battery, your electric door locks, your electric HVAC system, your electric water heater, your electric security system. All of these things and so people are going to be looking to do more electrification and then get more interested in how to manage that optimally. So I think electrification is real. It's just been taken off the front pages by data centers because house is small so people think it's not big but cumulatively it is as we talked about before with the potential VPP scale is just the data center seems so large that's what people want to talk about. All the questions I got on my early meetings with investors would be about electrification and now they're all about data centers.
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Atul Arya19:57
Yeah, very interesting isn't it because I also learned that you're in Texas is building a lot of other industrial capacity right, LNG exports, pipelines, all of those things are going to need electricity. People forget it. And those are very big consumers of electricity just like the data centers are.
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Lawrence Coben20:13
Absolutely. And if you believe that tariffs are going to onshore more manufacturing, you'll get more and more. I think a lot of companies are going to want to locate as a political hedge. All of them are going to require enormous amounts of power.
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Atul Arya20:28
So Larry, you mentioned some of the things you're doing with AI. Give us an example. How are you using AI to modernize your own operations? Maybe demand management on the grid side and maybe perhaps an example or two of what you're doing.
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Lawrence Coben20:40
We're using it first of all to just review customer requests that come in and customer power use. We still need humans to do that at the end of the day, but AI can help us sort, look through, figure out what the right questions are. So in understanding people's demand use, we're starting to look at how to use it to optimize plant operations. We actually have an ongoing program to make our entire workforce AI literate because that's the future. They're the people who are going to figure out what the best uses of AI are in our business. In our smart home business, we're using all kinds of technologies so that for example, you could open your door lock by facial recognition rather than by needing a code or a combination and it can tell you who's coming to your house, how long they've been there, things like that. If you want that level of detail, so we're seeing AI permeate our operations and our workforce very rapidly. It's still early days. I'd say we probably made the most progress not surprisingly in customer service but even there we don't want to lose the human element so early days and more to come.
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Atul Arya21:48
A lot more to come. We're running a lot of tests. What are the economic returns on this?
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Lawrence Coben21:52
Analyzing our customers incoming requests and energy that's been an enormous both cost center and revenue generator. We're seeing also that people are actually quite happy the AI works more quickly in some of the cases and getting the right kinds of problems to the AI is really very important. Looking at doing strategic research and following new technologies is another thing that AI does exceptionally well. So in permeating our business and the key for us is to figure out what's the right level of investment. The biggest resource we have is not our 25 gigawatts, it's our 18,000 people soup to nuts top to bottom. And my job is to make sure that they have all the tools to be even greater than they are today.
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Atul Arya22:39
So that's a great segue to our final question. You said earlier been in the industry for a long time, great leadership roles. So what's your advice? What do you tell your younger junior fresh graduates who join NRG, what should they be doing to have an impactful and a fulfilling career?
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Lawrence Coben22:57
I think the number one thing they need to do is be curious, learn to be critical thinkers. It's actually a time to, you know, take liberal arts back to where it was where you have to be able to argue any point of view. Be curious, love knowledge, be exceptionally broad, as broad as you can in terms of skill set. We've seen this two years ago. Everybody was supposed to be a coder. Now, nobody's supposed to be a coder. Good people who have the ability to think differently, to speak different languages, to understand different aspects of the business, those are the ones that are going to be super successful in our industry and it's a great time to come with it as this growth is not going away anytime soon. We are in the very early innings of the demand cycle.
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Atul Arya23:45
Yes, you're spot on. I was just going to say you may remember that it was Steve Jobs who said that in a commencement at Stanford too. So be curious, be stupid. I'm not quoting him correctly, but that was exactly what you're saying. You have to be curious. You have to learn about the world, isn't it?
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Lawrence Coben24:01
Yeah. And the last thing I'd say is be willing to fail. You probably read about all these things with Harvard's finally not going to let 90% of people get grades. Sometimes failing is good. If you learn more from failing and you learn more from things that you don't do well when somebody screams at you and you get a lot of feedback than you do by being told you're an A student all the time because nobody's an A student all the time.
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Atul Arya24:24
I completely agree. But Larry Coben, so thank you so much for joining us for this CERAWeek podcast. We look forward to seeing you in Houston in March. And thank you again.
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Lawrence Coben24:35
Thank you very much.
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Atul Arya24:36
Thank you for joining us on the CERAWeek podcast. To stay connected with the ideas driving change across energy and technology, subscribe, share, and rate this episode. It helps us get the word out. Let's continue having impactful conversations. I'm Atul Arya. Until the next time.
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Narrator24:55
The CERAWeek podcast with Atul Arya is brought to you by CERAWeek, the world's premier energy conference. Be part of the conversations moving the world of energy forward. March 23rd through 27th, 2026 in Houston. Discover more at ceraweek.com.