The grid bypass economy has a new participant.
According to Bicmagazine, National Grid Ventures, the commercial investment arm of National Grid plc, the regulated UK utility, is taking a 35% equity stake in Joulent LLC for $1.75B. Joulent is the Texas-based energy infrastructure developer behind Project Kilby, a 2.67 GW gas-fired power facility being built in West Texas as a 50/50 joint venture with Chevron. Project Kilby will supply power exclusively behind-the-meter to a Microsoft-operated data center campus under a 20-year power purchase agreement, with first power delivery targeted for 2028. The transaction implies a $5B post-money valuation for Joulent, a mathematical derivation from the stake size and investment amount, not a figure Bicmagazine separately stated.
This follows our June 22 coverage of the Chevron-Microsoft operational partnership for the same Project Kilby infrastructure. That report covered the supply side of the arrangement, who’s building and who’s buying the power. Today’s development covers the capital structure of Joulent itself: who’s financing the developer taking on the construction and operating risk.
Project Kilby Capital Structure
| Party | Role | Commitment |
|---|---|---|
| National Grid Ventures | 35% equity stake in Joulent LLC | $1.75B |
| Chevron | 50% JV partner, generation infrastructure | Not disclosed |
| Microsoft | Power offtaker, 20-year PPA | Not disclosed |
Why it matters
National Grid is a regulated utility. Its commercial arm investing $1.75B in a Texas gas plant that will never serve the public grid is a significant departure from its core business model, and that’s exactly the point. Regulated utilities don’t typically take equity positions in merchant power projects in other jurisdictions. National Grid Ventures doing so signals that the behind-the-meter AI power model has cleared a risk threshold that attracts institutional utility capital, not just tech company balance sheets or private equity.
The real story is the financing structure this creates. Project Kilby now has three institutional parties sharing the capital risk: Chevron on the generation infrastructure side (50% of the JV), National Grid Ventures on the Joulent equity side (35% stake), and Microsoft on the demand side (20-year PPA commitment). That’s a tripartite structure that distributes construction and offtake risk across a utility, an energy major, and a hyperscaler. It’s a template, not a one-off transaction. This is the third dedicated AI power infrastructure deal this quarter to involve a major institutional energy investor, following a pattern consistent with the broader physical AI capital formation story.
Context
Behind-the-meter power arrangements, where a dedicated generation asset connects directly to a single customer’s facility without flowing through the public grid, have been gaining traction as hyperscalers and AI companies face interconnection queues and grid capacity constraints. The model solves the supply problem directly but introduces construction risk, permitting complexity, and long-dated capital commitments that most technology companies aren’t equipped to hold. Bringing in an institutional energy investor at the developer level is how that risk gets priced and distributed.
What to Watch
What to watch
Watch whether the 2028 first-power-delivery target holds as Project Kilby moves through West Texas permitting and gas supply contracting. Slippage on large-scale gas-fired behind-the-meter projects is common, and any delay directly affects Microsoft’s data center commissioning timeline. Also watch for copycat structures, whether other hyperscalers facing similar power constraints attempt to replicate the tripartite Joulent/Chevron/NGV financing model for their own dedicated generation assets.
TJS synthesis
National Grid’s equity stake in Joulent is a milestone worth marking: it’s the clearest signal yet that dedicated AI power infrastructure has matured from a tech-company-funded experiment to an asset class that regulated utility capital is willing to underwrite. The 20-year Microsoft PPA is what makes that possible, it’s a contractual demand anchor that converts construction-phase risk into something resembling a utility-grade revenue stream. Watch whether National Grid Ventures files for regulatory approval of the Joulent stake before year-end 2026; that filing timeline will tell you whether the deal closes on the stated terms or faces structural renegotiation.