{"id":3489532,"date":"2026-04-27T15:27:52","date_gmt":"2026-04-27T15:27:52","guid":{"rendered":"https:\/\/techingeek.com\/index.php\/2026\/04\/27\/data-center-requirements-cause-a-66-increase-in-natural-gas-power-plant-expenses\/"},"modified":"2026-04-27T15:27:52","modified_gmt":"2026-04-27T15:27:52","slug":"data-center-requirements-cause-a-66-increase-in-natural-gas-power-plant-expenses","status":"publish","type":"post","link":"https:\/\/techingeek.com\/index.php\/2026\/04\/27\/data-center-requirements-cause-a-66-increase-in-natural-gas-power-plant-expenses\/","title":{"rendered":"Data center requirements cause a 66% increase in natural gas power plant expenses"},"content":{"rendered":"
\n

Tech giants like Microsoft and Meta have recently developed a strong affinity for natural gas, hastily constructing power plants powered by this fossil fuel to energize their data centers. However, their affection may be veering towards excessive \u2014 the expense of constructing such facilities has surged by 66% over the last two years, as indicated by a recent report from BloombergNEF.<\/p>\n

Despite low natural gas prices in the U.S., even amid the ongoing conflict in Iran, the cost to erect a new combined cycle gas turbine (CCGT) power plant has escalated from under $1,500 per kilowatt of generating capacity in 2023 to $2,157 last year, as revealed in the report. Additionally, the timeline for completing a new facility has now extended by 23%.<\/p>\n

Data centers play a significant role in increasing the demand for electricity, prompting tech companies and utilities alike to invest in natural gas. The Trump administration has encouraged data center operators to \u201cbring their own power,\u201d but utilities generally transfer the expenses of new generation to consumers. This has resulted in a mounting backlash against data centers from the general populace.<\/p>\n

While data centers are not the sole catalysts for new electricity demand, they are among the swiftest-growing consumers. Additions are projected to reach 2.7 times the current demand, escalating from 40 gigawatts presently to 106 gigawatts by 2035. This growth is partly driven by the sheer size of new data centers. Currently, just 10% of facilities are 50 megawatts or larger, but in the next decade, the average data center is set to surpass 100 megawatts.<\/p>\n

\"A
Anticipated data centers are considerably larger than those currently operational.<\/span>Image Credits:<\/strong>BloombergNEF<\/span><\/figcaption><\/figure>\n

Until recently, tech firms have preferred grid-connected data centers supported by power purchase agreements for wind, solar, and batteries. Nevertheless, the increasing electricity demand, spurred by AI and public discontent with data centers, has resulted in more new natural gas projects.<\/p>\n

The rush for natural gas power plants has led to a scarcity of gas turbines. By year\u2019s end, prices for this equipment, which accounts for up to 30% of a new power plant\u2019s expenses, are anticipated to rise by 195% compared to 2019 prices. Furthermore, the production technique needed for gas turbines does not allow for rapid scaling. Consequently, waitlists are extending into the early 2030s.<\/p>\n

Conversely, not everyone is fully committed to natural gas.<\/p>\n

Google has begun to outline a fresh strategy for augmenting generating capacity on the grid that depends on renewables combined with long-duration energy storage, such as Form Energy\u2019s massive iron-air batteries, capable of delivering electricity over a span of 100 hours. In contrast to gas turbines, solar panels and batteries have continuously decreased in price, providing an alternative to the soaring costs associated with natural gas power plants.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

\n

Tech giants like Microsoft and Meta have recently developed a strong affinity for natural gas, hastily constructing power plants powered by this fossil fuel to energize their data centers. However, their affection may be veering towards excessive \u2014 the expense of constructing such facilities has surged by 66% over the last two years, as indicated by a recent report from BloombergNEF.<\/p>\n

Despite low natural gas prices in the U.S., even amid the ongoing conflict in Iran, the cost to erect a new combined cycle gas turbine (CCGT) power plant has escalated from under $1,500 per kilowatt of generating capacity in 2023 to $2,157 last year, as revealed in the report. Additionally, the timeline for completing a new facility has now extended by 23%.<\/p>\n

Data centers play a significant role in increasing the demand for electricity, prompting tech companies and utilities alike to invest in natural gas. The Trump administration has encouraged data center operators to \u201cbring their own power,\u201d but utilities generally transfer the expenses of new generation to consumers. This has resulted in a mounting backlash against data centers from the general populace.<\/p>\n

While data centers are not the sole catalysts for new electricity demand, they are among the swiftest-growing consumers. Additions are projected to reach 2.7 times the current demand, escalating from 40 gigawatts presently to 106 gigawatts by 2035. This growth is partly driven by the sheer size of new data centers. Currently, just 10% of facilities are 50 megawatts or larger, but in the next decade, the average data center is set to surpass 100 megawatts.<\/p>\n

\"A
Anticipated data centers are considerably larger than those currently operational.<\/span>Image Credits:<\/strong>BloombergNEF<\/span><\/figcaption><\/figure>\n

Until recently, tech firms have preferred grid-connected data centers supported by power purchase agreements for wind, solar, and batteries. Nevertheless, the increasing electricity demand, spurred by AI and public discontent with data centers, has resulted in more new natural gas projects.<\/p>\n

The rush for natural gas power plants has led to a scarcity of gas turbines. By year\u2019s end, prices for this equipment, which accounts for up to 30% of a new power plant\u2019s expenses, are anticipated to rise by 195% compared to 2019 prices. Furthermore, the production technique needed for gas turbines does not allow for rapid scaling. Consequently, waitlists are extending into the early 2030s.<\/p>\n

Conversely, not everyone is fully committed to natural gas.<\/p>\n

Google has begun to outline a fresh strategy for augmenting generating capacity on the grid that depends on renewables combined with long-duration energy storage, such as Form Energy\u2019s massive iron-air batteries, capable of delivering electricity over a span of 100 hours. In contrast to gas turbines, solar panels and batteries have continuously decreased in price, providing an alternative to the soaring costs associated with natural gas power plants.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"author":2,"featured_media":3489533,"comment_status":"open","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3489532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3489532"}],"collection":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/comments?post=3489532"}],"version-history":[{"count":0,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3489532\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media\/3489533"}],"wp:attachment":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media?parent=3489532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/categories?post=3489532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/tags?post=3489532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}