The AES Corporation (AES) Business Profile

What it does

AES is a global energy company that develops, owns and operates electric generation facilities and utilities. It was founded in 1981, is headquartered in Arlington County, and its chief executive is Andrés R. Gluski.

Its generation business produces electricity from solar, wind, energy storage, hydro, natural gas, LNG, coal, pet coke, diesel and oil. It sells power to utilities, industrial users and other intermediaries. The company also develops new generation facilities and can transfer projects to third parties before construction under Develop-Transfer Agreements, or develop customized assets under development-service contracts.

AES has regulated utilities in the United States and El Salvador. AES Indiana generates, transmits and distributes electricity; AES Ohio transmits and distributes it. These utilities sell electricity directly to homes, businesses and other end users in defined service areas. AES has six utility businesses serving 2.7 million customers.

The company organizes its operations into Renewables, Utilities, Energy Infrastructure and New Energy Technologies. Renewables covers solar, wind, energy storage and hydro facilities. Utilities includes AES Indiana, AES Ohio and AES El Salvador. Energy Infrastructure includes thermal generation assets. New Energy Technologies holds investments in Fluence, Maximo and other energy technology businesses.

AES owned and/or operated a 34,740 MW generation portfolio, including AES Indiana, and employed 8,336 people in FY2025.

How it makes money

AES earns revenue by selling electricity from power plants and by providing regulated utility service. Its generation plants sell power and related attributes through medium-term contracts, long-term power purchase agreements, short-term contracts, spot markets and regulated prices. Medium-term contracts run for two to five years, while long-term contracts run for more than five years.

Long-term generation contracts can include energy payments, capacity payments and renewable energy certificates. Fuel-burning contracts are often structured to pass fuel and variable operating-and-maintenance costs through directly or through indexation, and AES may hedge fuel costs or arrange matching fuel supply. Capacity payments can cover projected fixed operating costs, debt service and a return on invested capital. These arrangements can also support project-level non-recourse financing.

Short-term generation sales are more exposed to market electricity prices because dispatch follows merit order and the marginal plant often sets the market price. AES also earns ancillary-service revenue, including voltage support, frequency regulation and spinning reserves. Renewable facilities can sell renewable energy certificates through bilateral arrangements or commodity exchanges.

The utility businesses earn revenue under tariffs set within government regulatory frameworks. Regulators determine the allowed asset base, capital structure and cost of capital used to establish a regulated return. Tariffs generally recover approved operating costs and may pass through fuel or purchased-power costs.

For the year ended December 31, 2025, consolidated revenue decreased $45 million and operating margin decreased $103 million, or 4%, compared with 2024. Adjusted EBITDA was $2,871 million and net income was $162 million. The available information does not provide a latest-quarter total.

Customers and how it sells

AES sells generation output to utilities, industrial users, other intermediaries and large corporate buyers. Its strategy focuses on partnering with large corporations that need electricity at specified times, particularly data center companies in the United States and mining companies outside the United States. In 2025, it signed long-term contracts for 4.0 GW of renewable capacity.

Named customers for renewable projects include Amazon, Apple, Microsoft, Google, BP, Codelco, Ecopetrol, APS, Southern California Edison, Dominion Energy, HECO and Kaua’i Island Utility Cooperative. These customers buy electricity, capacity or related services under project contracts with stated expiration dates for many facilities. AES also serves residential, commercial, industrial and governmental customers through its utility networks.

Its six utilities operate in Indiana, Ohio and El Salvador. AES Indiana and AES Ohio are the sole electricity distributors within their respective jurisdictions. The El Salvador distribution businesses face limited competition, although large regulated customers can become unregulated users and seek service from generation or commercialization agents.

The Renewables business has facilities in the United States, Chile, Argentina, Colombia, Panama, the Dominican Republic, Mexico, Bulgaria, Jordan and the Netherlands. AES’s broader generation portfolio includes utility generation and thermal assets. Renewable operating installed capacity was 17,836 MW in 2025.

Suppliers and costs

Fuel is a significant generation cost for AES’s thermal plants. Natural gas capacity generally uses local suppliers, except in the Dominican Republic and Panama, where AES imports LNG for local markets. U.S. coal plants are mostly supplied with domestic coal, while non-U.S. plants and the Puerto Rico plant source coal from international and local markets. Oil and diesel are sourced locally at internationally linked prices, and pet coke is largely sourced from Mexico and the United States.

AES seeks to match fuel supply agreements or financial hedges to contracted sales periods. In tolling arrangements, the power buyer supplies and pays for fuel. For short-term power sales, it procures fuel on a short-term basis designed to match market sales. Renewable generation capacity, including solar, hydro, wind, energy storage and landfill gas, represented 54% of generation capacity and does not have significant fuel costs.

Cost of sales includes electricity and fuel purchases, operating and maintenance costs, depreciation and amortization, bad-debt expense and recoveries, employee-related operating costs, and general administrative and support costs directly associated with operations. Construction is typically managed by a third party, while AES supervises budget, schedule, safety, efficiency and productivity. It seeks non-recourse project debt and partners to reduce required equity contributions.

Competitive position

No companies are named as competitors in the available information. AES competes in generation markets and in development of power projects. For medium- and long-term contracted generation, there is limited market competition affecting prices during the contract term. For short-term sales, local market competition, dispatch rules and reliability requirements determine dispatch and electricity prices.

AES’s utility position differs by jurisdiction. AES Indiana and AES Ohio are sole electricity distributors in their respective service territories. The El Salvador distribution businesses face limited competition because of barriers to entry, though certain large customers can choose unregulated service. Utility tariffs and allowed returns are subject to government regulation, and utilities must meet service standards.

Renewable generation competes for corporate contracts, project sites, construction resources and financing. AES states that it has been rated by Bloomberg New Energy Finance as one of the top two largest sellers globally of renewable power to corporate customers. Its renewable backlog consists of signed contracts for projects not yet operating, rather than uncontracted capacity.

Our reading: Regulated distribution rights in Indiana and Ohio are a strong local protection because each utility is the sole distributor within its jurisdiction, although tariff-setting and service obligations remain regulatory constraints. [item1]

Our reading: Long-term contracted generation provides meaningful revenue visibility during a contract term, but short-term generation remains exposed to competitive dispatch and market pricing. [item1]

Our reading: The contracted renewable backlog supports AES’s position in corporate renewable procurement, but it still depends on completing projects and maintaining customer contracts. [item1]

Growth opportunities

AES’s growth strategy centers on renewable generation, energy storage, utility investment and electricity demand associated with data centers. The company focuses on delivering customized electricity solutions to large corporate customers, particularly U.S. data center companies and large mining companies outside the United States.

In 2025, AES signed long-term renewable contracts for 4.0 GW. Its backlog of signed but not yet operational projects was 12.0 GW, including 5.7 GW under construction. The company completed construction of 3.2 GW of solar, energy storage and wind capacity during the year. Its Renewables operating assets reached 17.8 GW, and the business added 3.7 GW to its contracted-project backlog.

AES develops generation projects in markets including the United States and Chile. It generally seeks long-term output contracts before construction, then evaluates strategic fit, financial profile, projected returns and risk against other capital uses. It may retain projects, transfer development assets before construction, or provide development services for customized assets, including potential data center uses.

At AES Indiana and AES Ohio, the company has investment plans intended to improve reliability and service quality. AES projects double-digit rate-base growth through 2027 at these utilities, based on investments for customers. It also identifies additional potential utility investment from data-center growth in its service areas, where it cites proximity to fiber networks and available land and water.

The company expects improved operating performance, growth from new businesses and global cost-reduction initiatives to lessen or offset certain challenges during 2026 and beyond.

Structural risks

• Power generation, distribution and transmission operations can be interrupted by equipment failure, plant outages, fuel-supply disruptions, transmission failure, labor disputes or catastrophic events including fires, floods, storms, earthquakes, cyber-attacks and other occurrences.

• Short-term electricity sales and thermal-project economics are exposed to volatility in electricity and fuel prices. Market pricing can be affected by plant availability, transmission constraints, competition, weather, hydrology, supply of fuels, regulation, economic conditions and changing technologies.

• AES operates in multiple countries and faces economic, social and political instability, currency movements, restrictions on currency conversion or fund repatriation, changes in laws and tax policy, permitting delays, contract-enforcement difficulties and possible government actions affecting assets.

• Environmental and land-use laws can require capital spending and other compliance costs. AES’s facilities are subject to requirements related to emissions, water discharges, waste management, species and habitat protections, permits and approvals; the company states that some compliance costs could be material.

• The company relies mainly on long-term debt to fund construction and seeks non-recourse financing where available. Non-recourse debt may not be available on acceptable terms, and a project subsidiary unable to obtain financing or meet obligations may become insolvent, causing AES to lose its investment.

• Weather, including temperature, solar and wind resources and hydrological conditions, can affect renewable generation output, utility demand and operating margin. Seasonal patterns mean operating margin is not generated evenly through the year.

Bottom line

Our reading

Our reading: AES is a mixed electricity business: regulated utilities provide tariff-based service in defined territories, while generation spans contracted renewables, merchant short-term sales and thermal assets. Its 12.0 GW contracted-project backlog and utility investment plans connect its growth plans to corporate power demand and regulated asset expansion. [item1]

Our reading: Contract structures, fuel pass-throughs and project-level non-recourse financing reduce selected operating exposures, but the business remains subject to construction execution, weather, market-price movements, regulation and substantial debt funding requirements. [item1; item1a; item7]