The CEO of energy equipment manufacturing and services company GE Vernova has announced that data centers are progressively targeting natural gas over renewable alternatives such as onshore wind.
Scott Strazik stated that this is illustrated in the turbine manufacturer’s “humble” wind order sheet, and does not expect significant interest in onshore wind from the data center market in the months to come due to their need for round-the-clock 24/7 power, which natural gas supplies.
Strazik in an interview with Bloomberg stated that “They’re not building those data centers with an assumption for anything other than 24/7 power. Gas is well suited for that.”
Despite sliding interest from data center operators, Strazik remained optimistic on the future of wind power as a vital source of energy, declaring that data center clients will “commit to roadmaps that take the carbon intensity of those electrons down,” which will could result in more renewable and nuclear power.
Over the past ten years, The US has witnessed tremendous growth in its renewable sector . A recent report from Environment America highlighted that renewable energy capacity tripled after 2014. Texas, California, lowa, Oklahoma, and Kansas were the leading states for total renewable energy generation in 2023. In that same year, 15 states produced 30 percent or more of their electricity from renewable sources, a considerable hike from just two states achieving this in 2014.
Thereby, Strazik expects onshore wind and other renewables to grow tremendously within the next few decades as industrial and commercial customers’ net zero goals draw closer. He further adds that companies’ gas customers have exhibited a gradual interest in clubbing their assets with carbon capture and storage systems in order to reduce their carbon intensity.
Moreover, inspite of the favourable estimation of renewable energy, US utilities are increasingly considering natural gas as a critical energy source progressing due to the urgent energy demand of data centers.
In the previous month, Clair Moeller, president and chief operating officer of US grid operator Mid continent Independent System Operator, reported that data centers are equipped to finance for gas-fired generation to power their facilities in the coming years as a pathway to low carbon energy sources.
In early November, AltaGas CEO Vern Yu stated its subsidiary Washington Gas was in discussions with clients about utilising the fossil fuel as a major power source. According to Yu, the discussions were mainly fueled by regional data center growth.
Data center operators have also commenced signing pacts with gas manufacturers to install new power generation on-site to power their operations. Last week, Meta announced a new $10 billion data center in Richland Parish, northeast Louisiana, built and operated by Entergy Louisiana, powered by three combined-cycle combustion turbines with a capacity of 2.26GW.
An October report from S&P Global discovered that demand for natural gas to assist data centers could reach three to six billion cubic feet per day as the industry struggles to detect power for an AI buildout.
Natural gas is comparatively less polluting than other fossil fuels, but still carries higher carbon footprint than renewables.
Crucial concerns also prevail about whether utilities can boost power generation effectively to meet the expected demand for data centers.
A new report from Virginia’s Joint Legislative Audit and Review Commission has warned that at present rates, Virginia will not generate enough electricity to assist unconstrained data center growth. To meet unconstrained demand, a new 1.5GW natural gas plant would be required every two years for 15 consecutive years, which is equal to the busiest period of the last decade. This would also require abolising the Virginia Clean Economy Act, which orders the state to remove fossil fuel-derived energy by 2050.
GE Vernova was established in 2024 from the merger and subsequent spin-off of General Electric’s energy businesses. It manufactures a range of energy equipment, including wind turbines and natural gas generators.
