Who is Babcock & Wilcox?
Headquarters country is not stated explicitly in the report and reflects the company's US operating history as described by Sunlight Partners.
Babcock & Wilcox has made boilers for nearly 160 years, per the report. Its technology powered the first age of electric utilities and kept the US Navy afloat through two world wars, before combined-cycle gas turbines and renewables rendered conventional coal and gas-fired thermal plants obsolete for new utility-scale generation in the United States. Until its recent pivot, Sunlight Partners says, the company's core business was supplying parts and maintenance to the remaining fleet of 1950s and 1960s era power plants.
Business Model
According to Sunlight Partners, B&W's legacy business is servicing aging power plants for parts and maintenance, work the firm values at roughly $1.20 to $3.60 per share against a $19 stock price. The growth story now driving the shares is different. B&W proposes to sell a new natural gas-fired boiler and steam turbine plant, which the report calls a gas steam plant, to Base Electron, a start-up independent power producer, pitching it as a faster route to power amid surging data center electricity demand. The report contends the current price rests on analyst estimates that assume B&W sustains this new run rate and builds 9 to 10 similar plants into the mid-2040s.
Sunlight Partners' Key Allegations
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The proposed plant relies on what Sunlight Partners calls entirely obsolete 1980s technology that no US utility has built in 41 years. The report states a gas steam plant generates electricity at 35 to 42 percent thermal efficiency versus 58 to 60 percent for modern combined-cycle gas turbine plants, burning 40 percent more gas and emitting 40 to 50 percent more CO2 to deliver the same power.
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The report alleges related parties B. Riley, Applied Digital, and B&W spun up the Base Electron project in a sharp late-2025 pivot to AI power, fueled by circular investments, warrant incentives, and hype. After the stock's roughly 400 percent surge, Sunlight says B. Riley is now selling, needing to monetize an 8-year-old investment while AI is hot.
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Per the report, the project does not appear to have a site, permits, grid interconnection, or a power purchase agreement, and would be grid-connected in North Dakota, one of the most oversupplied power markets in the US. Sunlight calls the claimed 2028 start of operations absurdly optimistic, roughly twice as fast as permitting and construction for recent modern gas plants in the state, and notes even Applied Digital is distancing itself from the project.
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Sunlight Partners argues B&W's newer plan to fit gas turbines to its steam boilers at a later date to create a "combined-cycle plant" is illogical, because modern combined-cycle plants do not use boilers at all. The report says data centers are instead choosing modern combined-cycle gas, renewables plus battery storage, and quicker behind-the-meter options like reciprocating engines and aeroderivative turbines.
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Sunlight values B&W's core business at approximately $1.20 to $3.60 per share versus the current $19, and estimates that even a completed Base Electron project would add only about $1 to $2 per share, assuming what it calls a generous 10 percent EBITDA margin over three years.
Key Charts
Thermal efficiency ranges as stated in the report. Bar widths reflect the upper end of each range. Sunlight Partners states the efficiency gap means the gas steam design burns 40 percent more gas and emits 40 to 50 percent more CO2 for the same power output.
Valuation reflects Sunlight Partners' analysis of B&W's core parts and maintenance business. The red bar width reflects the upper end of the firm's $1.20 to $3.60 per share range. Sunlight states it does not issue price targets and is expressing its own opinion of value.
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