Daily Blog

Dive In - Natural Gas Producers, Utilities, Big-Tech Companies Racing to Power Data Centers

The pace of data center development accelerated in 2024, raising questions about how to power these energy-hungry behemoths. Natural-gas-fired plants are a go-to approach to helping local utilities provide the reliable, around-the-clock electricity that large-scale data centers need. Now, two giant oil and gas companies, ExxonMobil and Chevron, want to do something they’ve never done before: build gas-fired plants and sell power exclusively to data centers. And some utilities are partnering with big-tech companies on power plants of their own. In today’s RBN blog, we’ll discuss data center power needs and the unusual notion of building big gas plants to serve those customers. 

What’s a Data Center?

Let’s start with the basics. As we discussed in Storm Front, a data center is the home for hundreds or even thousands of networked computers that process, store and share data. Data centers — many of them owned and operated by tech giants like Amazon, Google, Meta and Microsoft (see photo below) — are among the most energy-intensive building types, consuming up to 50 times the energy per square foot of a typical commercial office building, with electrical demand at larger facilities ranging from 100 megawatts (MW) to 2,000 MW. [For perspective, we noted in Just Can’t Get Enough that a city the size of Lubbock, TX, (population 267,000) requires about 700 MW.] Demand for data centers has grown exponentially with the expansion of artificial intelligence (AI) tools like ChatGPT and Perplexity, which demand far more computational power — and energy — than conventional Google searches.

The Interior of a Microsoft Data Center

The Interior of a Microsoft Data Center. Source: Microsoft 

Now, we’ll dive into the news. Chevron and ExxonMobil announced separately in December that they are each exploring ways to jump into the electricity-supply business by using natural gas (with carbon capture and sequestration, or CCS) to power data centers. Each said they do not intend to put the electricity from these new plants on the overall power grid; instead, the plants’ output would be dedicated to the data center customer. 

Join Backstage Pass to Read Full Article

Learn More