- Microsoft’s vice president of energy, Bobby Hollis, said the tech company would consider natural gas with carbon capture as a power solution for data centers.
- Chevron and Exxon recently announced they are developing natural gas solutions for data centers.
- The tech sector has largely relied on renewable power, but the industry is increasingly turning to alternative power sources as data center electricity consumption rises.
HOUSTON — Microsoft is open to deploying natural gas with carbon capture technology to power artificial intelligence data centers, the technology company’s vice president of energy told CNBC.
“That absolutely would not be off the table,” Bobby Hollis said. But the executive said Microsoft would consider natural gas with carbon capture only if the project is “commercially viable and cost competitive.”
Oil and gas companies have been developing carbon capture technology for years, but the industry has struggled to launch it at a commercial scale due to the high costs associated with such projects. The technology captures carbon dioxide emissions from industrial sites and stores them deep underground.
Microsoft has ambitious goals to address climate, aiming to match all of its electricity consumption with carbon-free energy by 2030. The tech company has procured more than 30 gigawatts of renewable power in pursuit of that goal. But the tech sector has come to the conclusion that renewables alone are not enough to power the demanding power needs of data centers.
Microsoft turned to nuclear power last year, signing a deal to support the restart of Three Mile Island through an agreement to purchase electricity from the currently shuttered plant. But it’s unlikely that the U.S. will build a significant amount of additional unclear power until the 2030s.
Data center developers increasingly see natural gas as near-term power solution despite its carbon-dioxide emissions. The Trump administration is focused on boosting natural gas production. Energy Secretary Chris Wright said Monday that renewable power cannot replace the role of gas in producing electricity.
“We’ve always been cognizant that fossil will not disappear as fast as we all would hope,” Hollis said. “That being said, we knew natural gas is very much the near-term solve that we’re seeing, especially for AI deployments.”
Exxon Mobil and Chevron announced last December that they are entering the data center space with plans to develop natural gas plants with carbon capture technology. Chevron struck an agreement with gas turbine manufacturer GE Vernova in January in build gas plants for data centers “with the flexibility to integrate” carbon capture and storage technology.
Hollis declined to say whether Microsoft is having conversations with the oil majors. The executive said the tech company is having “discussions across the board with all of all of those technologies.”
President Donald Trump told the World Economic Forum in January that he will use emergency powers to expedite the construction of power plants for data centers. Trump said the data centers can use whatever fuel they want. Chevron and GE Vernova announced their plan to build gas plants for data centers days after Trump’s remarks.
“We’re just glad to see that there’s a focus on accelerating schedules to meet what we view as a pretty critical need,” Hollis said when asked about the Trump administration’s plans.
But deploying natural gas faces its own challenges. The cost of new natural gas plants has tripled and the line to build plants now extends to 2030, NextEra CEO John Ketchum said Monday. NextEra is the largest developer of renewables in the U.S. but also has gas assets.
“Renewables are ready to go right now because they’ve been up and running,” Ketchum said at the conference. “It’s cheaper and it’s available right now unless you already have a turbine on order or that’s already been permitted.”
Ketchum said nuclear is unlikely to be a power solution until 2035. NextEra is considering restarting the mothballed Duane Arnold nuclear plant in Iowa.
This post was originally published on CNBC Markets
