HARRISBURG, Pa. (AP) — The rising demand for electricity from technology companies engaged in the artificial intelligence race is disrupting predictions for natural gas-fired power in the U.S., prompting utilities to reassess it as a major energy source. This shift is contrary to the expectations of many scientists and climate activists working to combat climate change, jeopardizing progress towards greenhouse gas reduction targets deemed crucial for mitigating the impact of fossil fuel combustion on global warming.
Tech firms across the country are acquiring properties and initiating new energy projects to support their energy-intensive operations. While some major tech players are investing in eco-friendly initiatives like solar, wind, geothermal, or battery storage, industry leaders are increasingly turning to natural gas, citing its affordability and reliability. This trend raises the possibility of natural gas playing a more substantial and prolonged role than previously anticipated.
“Gas is experiencing unprecedented growth in the short and medium term,” stated Corianna Mah, a power and renewables analyst at Enverus, a data analytics company. Prior to the recent surge in electricity demand, industry experts had assumed a gradual phase-out of gas plants in favor of a grid powered by renewable energy sources that do not emit carbon dioxide, the primary greenhouse gas.
While many countries are scaling back emissions to zero or net zero by 2050 to combat climate change, the U.S. electric power sector remains a significant greenhouse gas emitter. The construction of new natural gas plants, built for long-term use, poses a challenge to meeting climate goals, according to John Quigley, a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy. Quigley emphasized that achieving net zero emissions by 2050 is unattainable if new gas plants continue to be built.
Despite the availability of solar, wind, and battery storage solutions to meet rising electricity demands, critics argue that utilities and grid operators are hesitant to abandon natural gas. Enverus forecasts approximately 46 gigawatts of new gas-fired power coming online in the next five years, surpassing the 39 gigawatts added in the previous five years.
Recent announcements include the development of two 705-megawatt plants by Evergy in Kansas, a 2,300-megawatt plant by Entergy to support Meta’s AI data center in Louisiana, new plants in Texas and Mississippi, a 1,450-megawatt plant by the Tennessee Valley Authority, a 1,400-megawatt project by Duke Energy in North Carolina, and plans by Georgia Power for three oil or gas units with a combined capacity of up to 1,300 megawatts. This momentum extends to Calpine’s exploration of additional gas-fired capacity in the mid-Atlantic region, particularly in Pennsylvania and Ohio, where grid operators are aiming to expedite the deployment of new gas-fired resources.
Power plants across the U.S. are undergoing transformations to meet the growing demand for electricity. In Pennsylvania, the former coal-fired Homer City power plant is being converted into a large gas-fired facility with the aim of powering a data center. The project received a $5 million state grant to support its development.
The surge in electricity demand is being driven by factors such as the rise of artificial intelligence, increased cryptomining activities, the electrification of society, and efforts to bring manufacturing back to the U.S. This demand is coinciding with the retirement of coal and aging nuclear plants, which struggle to compete with the lower costs of gas, solar, and wind power.
Gas pipeline operators are enthusiastic about the expanding demand and are seeing strong interest in extending their pipelines. In Texas, natural gas plants are being constructed next to data centers in the growing data center hub of metropolitan Dallas. Data center developers are in a race to secure reliable and cost-efficient power sources to quickly bring their facilities online.
The American Petroleum Institute notes that the sudden increase in electricity demand has made fast, cost-effective, and reliable power sources more valuable. This has made natural gas an attractive option for investors compared to solar and wind power in the short term.
Industry efforts are focused on providing clean, reliable, and affordable electricity. New gas plants are replacing older, more polluting coal-fired plants, some are designed to operate during peak demand periods, while others are integrated with battery storage or nearby wind farms. Some plants also incorporate carbon capture technology or run on a hydrogen blend.
President Donald Trump has expressed support for building new coal and gas plants to bolster the U.S.’s position in manufacturing, cryptomining, and artificial intelligence. However, environmental groups emphasize the need to reduce reliance on gas by 2035 to meet climate goals.
There are optimistic views that some proposed gas plant projects may not materialize, as advancements in technology, such as more efficient AI models and potential overestimation of electricity needs by utilities, could impact the actual demand for energy.
Energy efficiency in data center operations is on the rise, especially when it comes to how servers are being cooled. Despite the construction of all planned gas plants, there is a possibility that they may not be fully utilized, as noted by Levin. “There are various factors at play that could prevent the expected demand from materializing,” Levin explained.
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