Applied Digital has put a contract behind the gas plant that is to feed its third North Dakota campus. On 4 October the company signed a 15-year power purchase agreement, plus a credit support agreement, with Base Electron for capacity and energy from a gas-fired generation facility of about 1,200 MW to be built in Center, North Dakota, as dedicated generation for the Polaris Forge 3 campus. The terms are in Applied Digital's quarterly report filed with the SEC. Five days later Base Electron announced that it had confidentially submitted a draft registration statement for a U.S. initial public offering; the number of shares and the price range are not yet set.
What The Filing Says
The agreement provides fixed monthly payments based on a target contract capacity, which makes it a capacity contract rather than a plain energy purchase, and Base Electron may terminate it if financial close for the plant has not happened by 31 March 2027. Applied Digital owned about 10 % of Base Electron as of 4 October; the rest belongs to a number of third parties and to officers and directors of Applied Digital in their private capacity, among them chief executive Wes Cummins, who also runs Base Electron. The board approved the deal on the recommendation of a committee set up for related-party transactions with Base Electron. RuntimeWire, which reported the IPO filing on 9 October, points out that Base Electron's financial statements stay out of sight while the draft is confidential. The company describes itself as a power infrastructure business developing grid-connected generation for hyperscale data centers.
Boilers And Steam Turbines, Not Gas Turbines
The plant itself was announced in March. Babcock & Wilcox received full notice to proceed on a $2.4 billion design-build contract from Base Electron for four 300 MW gas-fired boilers with steam turbine generator sets from Siemens Energy, as POWER Magazine reported at the time. B&W's chief executive Kenneth Young argued that its boiler technology can be deployed faster than combined-cycle or simple-cycle gas turbine plants, and Wes Cummins said then that an option for a further 1.2 GW was being evaluated. Whether a 1,200 MW steam plant really goes up quicker than a turbine plant will be settled on this site; with gas turbine deliveries stretched, developers are trying every route to a firm supply.
The Campus Behind The Contract
Applied Digital's results for the quarter to 31 August, published on 7 October, show why the power matters. Polaris Forge 1 at Ellendale has 250 MW live in two buildings leased to CoreWeave, with a third 150 MW building under construction; Polaris Forge 2 at Harwood is under construction for a hyperscaler, and Polaris Forge 3 at Center is under construction and leased to a tier-one hyperscaler the company does not name. Across five campuses, including two in Louisiana and Alabama, leases cover about 1.41 GW of critical IT load and about $36 billion of base-term contracted revenue. Quarterly revenue was $341.9 million, up 322 % on the year.
A dedicated plant of 1,200 MW next to a campus is a different proposition from the grid supply most sites have today. The data center's own standby generators still have to be there, because a single power station has outages of its own, but what they back up is now a neighbouring plant rather than a utility feed. For anyone planning the backup side, that changes the expected hours of operation, and hours of operation are what decide the duty of the gensets and their cooling, a point we made on the McKinsey outlook this week. The plant is a late-decade item: financial close is due by March 2027 and construction follows, while the campus it serves is already being built.
Sources: Applied Digital 10-Q (SEC), Applied Digital results (GlobeNewswire), Base Electron (GlobeNewswire), RuntimeWire, POWER Magazine
