When it comes to meeting the needs of energy-hungry data centers, backers of abundant natural gas believe the lower-carbon fossil fuel is better positioned to meet the need than renewables.

Quick to market? Yes. Reliable? Yes. On-site generation available? Sure. Lower carbon? Compared to coal, yes. But it’ll be up to natural gas players to get its message across to Big Tech.

That was the sentiment of panelists who gathered last week at Hart Energy’s DUG Appalachia Conference & Expo in Pittsburgh to discuss the relatively new addition to producers’ investor slide decks: data centers and energy demand.

No one knows exactly how much hyperscalers such as AWS, Microsoft and Google will need for data centers. However, the Electric Power Research Institute (EPRI) estimates data centers could consume up to 9% of U.S. electricity generation annually by 2030, more than double the amount used today.

The surge is driven in part by artificial intelligence queries, which according to EPRI require about 10 times more electricity than typical internet searches.

Both renewable energy and fossil fuel players are jockeying for business to meet growing power needs.

Rising power needs are already evident.

“We’ve got clients that have requested anywhere from 25 [megawatts] to 30 megawatts of power for a data center,” said Vincent McCullough, vice president of construction for Hines. “And in the last two months, that number’s increased to 50 megawatts.”

Data centers are not the only ones craving more power. The push toward electrification of everything from electric vehicles to industrial processes and large-scale manufacturing is playing a role in higher power needs amid policy-driven efforts to lower emissions.

The growth comes as U.S. grid infrastructure continues to age and lengthy interconnection queues remain, among other challenges.

However, panelists seemed to agree that natural gas and the Appalachian Basin, in particular, is poised to rise to the challenge.

Challenges, solutions

There are forecasts showing natural gas to meet between 50% and 60% of growing power needs, with the rest from renewables and nuclear, said Ravi Srivastava, president of new technologies for CNX Resources. However, he pointed out longer wait times for renewable projects to get connected to the grid.

Srivastava recalled a solar project that requested a PJM Interconnection queue in 2019 finally getting online in 2024. Expensive nuclear power projects are also slow to come online. “Over the last 30 years, there’s only one new nuclear power project that has come online, and it was more than 200% over budget and about a decade behind schedule,” he said.

Speed and reliability are among the immediate needs of hyperscalers. But utilities are having difficulty meeting data center’s power needs, according to panelists.

“In Northern Virginia, what we’re seeing is that those utility companies are giving those commitments early on. But I could take you to probably five, maybe six, facilities that are in Northern Virginia right now that are only operating on 40[%] to 50% of the power that they requested,” McCullough said. “And that’s because those grid utility providers can’t get them the power.”

Colleen Turley, senior manager of sales and engineering for AMP, added that the industry sees lots of promises for power with timelines attached, but many utilities can’t deliver because assets and distribution networks aren’t viable.

“That’s probably an anomaly that hasn’t really been explored on the front end on the data center side,” Turley said. “Having onsite generation alleviates that risk. You almost essentially have a microgrid onsite that you self-distribute to the data center itself. And by having a partner on the gas end, you can almost insulate your risk.”

Onsite power generation gives data centers the opportunity to use waste energy for cooling using a cogeneration system.

“The gas market has an opportunity to pick up where the utility grid is kind of dropping the ball right now because their infrastructure is so aged,” McCullough added. “I think there could be an appreciation for the assist.”

A lower-carbon option

Natural gas has been a long-time contributor to grid reliability.

“Reliability means money. It means an n plus one solution in terms of assets,” Turley said, “and how we set everything up from an ancillary perspective or even just a fuel perspective.”

But there is also sustainability at play. The need for reliable access to power is keeping fossil fuels in the picture, but renewables and nuclear energy have been a top choice for companies looking to shrink carbon footprints.

Srivastava pointed out efforts in the natural gas industry to lower emissions, including replacing pneumatic devices. Carbon capture and sequestration is another way to lower downstream emissions from power plants, he said.

“We capture waste methane that goes into the atmosphere and use that methane for beneficial use such as power generation,” he said describing one of CNX’s programs. “And if you look at the lifecycle assessment of just methane going into the atmosphere, by virtue of capturing it, that’s a significant carbon reducing action.”

Natural gas power plants also require significantly less land than solar and wind.

“Land is a very tight commodity where they can deploy these data centers,” McCullough said. Companies may end up relying on the grid if there isn’t enough surface area to generate enough power.

“Natural gas can give them the power that they need and provide that sustainability piece on the backside. That’s a win,” McCullough said.

Higher natural gas production can also mean more on-site electrical power.

“I think that’s part of the message that we have to get out,” he said.

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