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Gas Power Roars Back to Drive Data-Center Boom


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Utilities in the US are building a slew of plants, putting the government’s clean-energy goals further from reach.

The Calpine Los Medanos Energy Center gas-fired power plant in Pittsburg, California.
The Calpine Los Medanos Energy Center gas-fired power plant in Pittsburg, California.
The Calpine Los Medanos Energy Center gas-fired power plant in Pittsburg, California.Photographer: Bloomberg

Natural gas is back in favor in the US.

In the first six months of this year, power producers announced plans to build more gas-fired capacity than they did in all of 2020.

That’s in large part a result of soaring demand from data centers, new manufacturing facilities and electric vehicles.

“This gas business is going into a great decade,” GE Vernova Inc. boss Scott Strazik said last week as he revealed his company’s gas-turbine production capacity is set to grow by a third.

It’s a remarkable change of fortune for gas power in America. Just a few years ago, climate goals and plummeting clean-energy prices supported the notion that the US was nearing peak consumption.

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That was before the startling growth of artificial intelligence.

Data Centers Now Need A Reactor's Worth Of Power, Dominion Says
An Amazon Web Services data center in Stone Ridge, Virginia.Photographer: Nathan Howard/Bloomberg

Electricity use by AI data centers alone is poised to grow as much as 10-fold by 2030. While some tech customers are investing in green energy to meet that demand, utilities and power providers also plan new gas-fired generation to fill the gap.

Climate advocates are understandably dismayed. For one thing, more gas boosts the risk of leaks from pipelines and wells. Emissions of methane — the main component of natural gas — heat the atmosphere much faster than carbon dioxide.

For another, new generation capacity means fossil fuels are likely to have a longer lifespan, while increased demand will also slow the retirement of older plants, Wood Mackenzie Ltd. analyst Patrick Finn said. “It makes clean-energy goals that much more difficult to attain.”

(Michael R. Bloomberg, the majority owner of Bloomberg News’ parent company Bloomberg LP, has contributed to campaigns to phase out fossil-fuel power plants.)



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