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The United States is staring down a natural gas buildout of gigantic proportions.
Amazon wants to build what would be the country’s largest power plant in Texas — and run it entirely on natural gas. Not to be outdone, OpenAI is plotting an even larger power plant in Ohio that, if built, would become the world’s largest gas power facility. How should we think about this boom — and about the AI and technology companies behind it, who remain some of the world’s biggest buyers of clean energy?
On this episode of Shift Key, Rob is joined by Emily Pontecorvo, a Heatmap founding staff writer. They discuss what Emily learned identifying the country’s 10 biggest gas projects, what surprised her most, and what this means for the country’s climate trajectory — and Big Tech’s corporate net-zero goals.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Here is an excerpt from their conversation:
Robinson Meyer: Can we talk a little bit about , why are companies building gas? Clean energy advocates talk a lot about how wind and solar — especially solar and batteries — are the cheapest source of electricity. I would say, when you talk to electricity traders, too, like when you talk to people in the market every day, they also talk about how cheap solar is. So why are companies building gas and not solar to service these facilities?
Emily Pontecorvo: So there’s a lot of different reasons that are all kind of coming together. Maybe the biggest one of all are the bottlenecks to connecting to the grid, the transmission bottlenecks. And that’s really pushing a lot of these companies to look for off-grid solutions.
Meyer: And specifically, just to play that out, because they cannot site enough acreage of solar on the site where they would put a data center to generate the power they need, which means they need a grid hookup. But if they need to generate their own power on their own acreage, then you need an extremely energy-dense form of generation, and that means you go to gas.
Pontecorvo: Right, right. And then I think that’s coming together with a bunch of political factors, like the Trump administration has a strong interest in pushing natural gas. They have gotten rid of the tax credits for clean energy. They’ve made renewable energy, wind and solar, really hard to build with all of these permitting freezes and permitting obstacles for renewables.
I think another element is just the extreme speed and urgency that AI companies are expanding at and demanding power at, which I guess kind of circles back to the interconnection issue and just not wanting to wait to be connected to the grid. And then the last one that I think is important is this issue with affordability in data centers, where people are really worried about the buildout increasing their energy bills. And a lot of data center developers are pushing this idea that by bringing their own generation, by building these gas power plants onsite, not connecting to the grid, they’re kind of putting their project in a box and ensuring that it doesn’t have any impact on regular ratepayers.
Meyer: It’s interesting to me — the Ratepayer Protection Pledge from Trump pledges that data centers won’t make electricity rates go up. And the solution to this for a lot of these companies, as you were saying, when they look at the set of constraints that they’re working within that include acreage, cost, regulation, local grid interconnection capacity, speed to power — they solve this set of constraints by going with gas. And I mean, I think there’s a few interesting aspects about it.
First of all, it’s not clear to me that it makes data centers any more popular. We recently did polling that made a lot of news that found that 75% of Americans, at this point, would oppose the data center being built near where they live. I’m not convinced that adding a fossil fuel power plant to a proposed data center project makes it any more popular because it’s taking a quasi-industrial site and turning it into a full-on industrial site. But that being said, one of the promises made by adding gas generation at the data center is that by generating your own electricity, you’re not increasing local demand for electricity and therefore not increasing anyone’s rates.
You can find a full transcript of the episode here.
Mentioned:
The U.S. Is Building Natural Gas Power Twice as Fast as China
Emily on Amazon’s Gigawatt Ranch
Rob on OpenAI and the PORTS-Pike Technology Campus
This episode of Shift Key is sponsored by ...
Verse's software platform Aria helps data centers connect to the grid faster and optimize power operations in real time. Learn more at verse.inc.
RE+ 26 is the largest clean energy event in North America, happening November 16th through 19th at the Las Vegas Convention Center. Register at re-plus.com and use code SHIFTKEY20 to save 20% off a Full Conference pass.
Music for Shift Key is by Adam Kromelow.
