Kentucky Utilities Company (KU) and Louisville Gas and Electric (LG&E), subsidiaries of public utility PPL, have submitted a request to state regulators to build two 645MW gas-fired power plants and a 400MW/1600MWh battery energy storage facility (BESS) to meet surging demand from the data center sector.
According to the application, the two gas-fired units would be located at KU’s E.W. Brown Generating Station in Mercer County, Kentucky, and LG&E’s Mill Creek Generating Station in Jefferson County, Kentucky.
The lithium-ion BESS project is planned for LG&E’s Cane Run Generation Station in Jefferson County, Kentucky. The BlueOval SK Battery Park will be built by Ford and SK On, a South Korean battery manufacturer.
The new gas generation is expected to cost $2.8 billion, and the BESS project is expected to cost $775 million.
The gas-fired units will take around five years to build and the BESS three years, according to the request.
According to the utilities, the decision to build the BESS is due to the failure to develop six solar projects they contracted through Power Purchase Agreements. Three of the projects have already been canceled, and the remaining three are facing pricing issues.
The new capacity will be used to serve the growing data center market in Kentucky. The two utilities have around 6GW of data center pipeline capacity and a further 2GW in possible data center customers.
Subsequently, KU and LG&E have projected that their annual electricity sales will grow by 47 percent to around 48,130GWh in 2032 from 32,800GWh this year.
The state has actively attempted to attract data center developers over recent years.
In 2024, the Kentucky General Assembly enacted legislation to induce data centers to locate in Kentucky, providing tax incentives for data centers to locate their facilities in Jefferson County.
In January, Poe Development and PowerHouse Data Centers announced a joint venture to construct a 402MW data center in Jefferson County, which would be the first hyperscale facility in the state. Construction on the 154-acre PowerHouse Louisville site is due to start in 2025, with the first building and 130MW of capacity set to be available in October 2026.
Utilities across the US have increasingly been looking towards natural gas generation to meet data center power demand.
A January report by the Institute for Energy Economics and Financial Analysis found that utilities across Virginia, North Carolina, South Carolina, and Georgia plan to build 20GW of new natural gas power plants by 2040 to meet the increasing demand from data centers. The report found that in Virginia, South Carolina, and Georgia, data centers are responsible for between 65 percent and more than 85 percent of projected growth.