AVK Just Turned a Generator Supplier Into a Power Company. Here’s Who Pays.
AVK, the UK on-site power developer majority owned by Partners Group since August, launched AVK Capital on 15 September. The new arm funds and owns generation on a data center site and sells the electricity back under a long-term power purchase agreement, so the developer never carries the plant on its balance sheet. Partners Group has committed to more than $1bn of equity plus debt, AVK claims a 2GW pipeline, and its first 110MW microgrid at PureDC in Dublin has two of three energy centers due live by the end of 2026. For contractors, the client for the energy center just changed. For anyone selling power kit, so did the buyer.
Ben Pritchard, AVK’s chief executive, gave the thesis in one line: access to power is the single biggest constraint on data center development in Europe, and the cost of solving it is the second. AVK Capital is meant to take both off the table. A developer picks a site, AVK engineers whatever generation the site can support, AVK Capital pays for it and owns it, and the developer signs a PPA the way it would sign any other service contract.
The move turns a supplier into an owner. Until now a generator company sold you engines. From here, AVK wants to sell you electrons, hold the asset for the length of the contract, and let a Swiss private equity fund earn a yield on infrastructure that would otherwise have sat on the developer’s books. Whether the model spreads depends on two things AVK cannot control: how long grid connections stay stuck, and how long planners keep consenting gas-engine microgrids.
How the model works
Engineer, fund, own, operate, then sell the output
According to DCD’s report on the launch, AVK selects and engineers the most suitable solution for a site from a menu that includes microgrids, fuel cells, renewable integration, standby systems and its own PowerPod, a packaged unit launched in April that bundles an engine, switchgear, UPS, controls and enclosure and can run grid-connected or fully islanded. AVK Capital then funds and owns whatever gets built, and the developer buys the energy under a long-term PPA.
The money comes from the Partners Group deal announced in August, in which the private equity firm took a majority stake and said it intends to invest more than $1bn of equity, backed by debt, to scale AVK’s microgrid offering. That is infrastructure fund money, priced for long-dated contracted cash flows, applied to what used to be a plant room. A long-term PPA on a gas microgrid looks more like a toll road than a construction contract, which is why Partners Group is interested.
The proof point is PureDC in Dublin. AVK’s 110MW natural-gas microgrid there was billed at launch as Europe’s first at that scale, built as three interconnected energy centers each generating up to 30MW. Energy Centres 1 and 2 are due live by the end of 2026, with the third to follow.
Why now
The connection queue made the balance sheet the critical path
Britain’s demand connection queue grew from 41GW in November 2024 to 125GW by June 2025, against national peak demand of roughly 45GW, with around 80GW of that surge arriving as data center applications. Ofgem’s answer, a commitment fee of up to £712,500 per megawatt to hold a place in the queue, closed for consultation on 16 September. We ran the numbers in our piece on the fee: a 300MW campus could have north of £200m of credit security parked for years before power flows.
Against that backdrop, funding your own generation stops looking exotic. Nscale, with £2bn committed, Nvidia on the cap table and Microsoft as anchor tenant, was told its 90MW Loughton connection would not arrive for a 2027 opening and is reported to be talking to a fuel cell maker instead. More than 100 UK projects are reported to be weighing gas generation while they wait. We covered that case in why Nscale still cannot get 90 megawatts, and the US version of the same shift, where major hubs quote seven to ten year waits, in data centers building their own power plants.
What AVK Capital adds is a way to do this without the developer writing the cheque. A hyperscaler can self-fund a 200MW energy center. An independent developer with three sites and a bridging facility cannot do it three times. Power as a service is aimed at the second group.
Access to power is the single biggest constraint on data center development in Europe, and the cost of solving it is the second.Ben Pritchard, CEO, AVK
What changes on site
The energy center gets its own client, its own contract and its own program
When generation is owned by a third party under a PPA, the energy center stops being a package inside the data hall contract. It becomes a separate asset with its own owner, design authority, acceptance tests and a revenue clock that starts the day it energizes. A contractor building the data hall may find the power plant next door is being delivered by AVK’s own team to a program the developer does not fully control.
Two effects follow. The interface between generation and the data hall, the switchgear, the controls, the phasing of energization, becomes a contractual boundary rather than a coordination task, and boundaries are where claims live. And the work itself, engine halls, gas supply, acoustic mitigation, emissions permitting and civils, shifts toward contractors with process plant or power generation experience. That is a live opportunity for M&E and civils firms with a utilities track record, and a hard wall for those who only know data halls.
- Who owns the interface. Get the switchgear, controls and phased energization boundary defined in writing before the data hall contract is let.
- What happens when the grid arrives. A PPA on a bridge asset needs a clear answer on step-down, buyout or continued operation once a connection energizes.
- Consent risk sits with whom. Gas engines and fuel cells face rising planning scrutiny. Know who carries the delay if a permit slips.
- Carbon accounting. Gas-fired supply on a site marketed as green needs a credible transition path, or the tenant’s own reporting will object before the planners do.
The catch
Gas engines are the fastest route and the most contested one
The Dublin microgrid runs on natural gas engines, and most of what AVK can deploy fastest will too. That puts power as a service on a collision course with clean power targets in the UK and Ireland, and with local objection. In Scotland, a 300MW campus at Larbert proposing around 200 diesel back-up generators has drawn more than 7,000 objections, and the Scottish Government has this week made environmental impact assessments mandatory for any data center above 50MW.
AVK’s answer is that its solutions are generation-agnostic, so a site can run gas today and move to fuel cells or renewables later. That is true of the controls and switchgear. It is less obviously true of a long-term PPA whose economics were written around a gas engine. The question a tenant will ask, and a planning committee soon after, is what the transition costs and who pays for it.
None of that stops the model. It means the 2GW pipeline is a claim about demand, not consents, and the projects that reach financial close will be the ones with a permitting story as good as their funding story.
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| Route to power | Who funds the plant | Who owns it | Typical timeline | Main risk |
|---|---|---|---|---|
| Wait for grid connection | Network operator, plus commitment fee if Ofgem’s proposal lands | Network operator | Multi-year, date often unconfirmed | Tenant penalties if capacity is promised and missed |
| Self-funded on-site generation | Developer or hyperscaler | Developer | 24 to 36 months plus engine lead time | Capital tied up, consent and carbon exposure |
| Power as a service (AVK Capital model) | Third-party infrastructure fund | Third party, sold under long-term PPA | Months to a couple of years, site dependent | Loss of control, interface claims, PPA locked to gas economics |
| Buy the capability (Vertiv and UIG) | Acquirer | Acquirer, sold as equipment and controls | Deployment per site | Still needs a funded owner for each plant |
A funding and ownership arm launched by AVK on 15 September 2026. It pays for and owns on-site power infrastructure at data center sites, with AVK designing, building, operating and maintaining the plant, and the developer buying electricity under a long-term power purchase agreement rather than carrying the capital cost. (Source)
From the Partners Group investment announced in August 2026. The Swiss private equity firm acquired a majority stake in AVK and said it intends to invest more than $1bn of equity, backed by debt financing, to scale the company’s microgrid offering for the data center market. (Source)
A 110MW natural-gas microgrid at a PureDC data center campus in Dublin, comprising three interconnected energy centers each generating up to 30MW. Energy Centres 1 and 2 are due to be fully operational by the end of 2026, with the third at a later stage. AVK says it holds a 2GW pipeline beyond that. (Source)
AVK’s packaged on-site power unit, launched in April 2026 for the data center market. It combines an engine, switchgear, UPS, controls and enclosure in one system that can connect to the grid or operate fully off-grid. (Source)
Speed and capital. Grid connections in the UK can take years, and Ofgem is consulting on commitment fees of £237,500 to £712,500 per megawatt to hold a queue position. A developer without a hyperscaler balance sheet may find contracting for power under a PPA the only way to energize a site on schedule, at the cost of handing a long-term asset to a third party. (Source)
The energy center becomes a separately owned asset with its own client, program and acceptance regime. Interface scope between generation and the data hall turns into a contractual boundary, and the plant work itself favors firms with power generation or process plant experience over pure data hall builders. (Source)
That is the open question. The UK and Ireland both carry clean power targets, and local objection to generators is rising. Scotland has this week made environmental impact assessments mandatory for data centers above 50MW, and a proposed 300MW campus at Larbert has drawn more than 7,000 objections partly over its back-up generation. AVK says its systems are generation-agnostic and can transition later. (Source)
Related Articles
Nscale Has £2bn, Microsoft and Nvidia. It Still Can’t Get 90 Megawatts.
Data Centers Can’t Get Power from the Grid. So They’re Building Their Own Power Plants.
Ofgem Wants Up to £712,500 a Megawatt Before You Join the Queue
DCD: AVK launches dedicated funding arm to own and operate onsite power solutions
DCD: Partners Group to invest $1bn in AVK to scale its microgrid offering
DCD: PureDC plans natural gas microgrid at Dublin data center campus
ConstructConnect: September 2026 Data Center Report (power infrastructure starts)
LBC / PA: Large-scale data centres will require environmental assessment, says minister
