Microsoft is exploring the use of natural gas coupled with carbon capture technology to supply power to its artificial intelligence data centers, according to Bobby Hollis, the company’s vice president of energy.
“That absolutely would not be off the table,” Hollis stated, emphasizing that Microsoft would consider such a solution if it proved “commercially viable and cost competitive.”
While the tech sector has substantially relied on renewable energy sources, the industry is increasingly investigating alternative power solutions due to the escalating electricity consumption of data centers.
Oil and gas companies, notably Exxon Mobil and Chevron, have begun developing natural gas solutions tailored for data centers. These efforts are a response to the growing energy demands of AI infrastructure.
Microsoft has established ambitious climate goals, aiming to match all its electricity consumption with carbon-free energy by 2030. The company has already secured more than 30 gigawatts of renewable power. However, the consensus within the tech sector is that renewables alone may not suffice to meet the substantial power needs.
Last year, Microsoft entered the nuclear power domain, signing an agreement to support the restart of Three Mile Island by purchasing electricity from the currently closed facility. Yet, it’s unlikely that the U.S. will significantly expand nuclear power capacity until the 2030s.
Data center developers are increasingly viewing natural gas as a near-term solution, despite its carbon-dioxide emissions. Hollis acknowledged the ongoing role of fossil fuels, saying, “We’ve always been cognizant that fossil will not disappear as fast as we all would hope.”
“That being said, we knew natural gas is very much the near-term solve that we’re seeing, especially for AI deployments,” Hollis added.
Exxon Mobil and Chevron, in December, unveiled their plans to develop natural gas plants integrated with carbon capture technology for data centers. Chevron also reached an agreement with GE Vernova in January to manufacture gas plants for data centers, designed “with the flexibility to integrate” carbon capture and storage technology.
Hollis declined to comment on whether Microsoft is engaged in discussions with the oil majors. He did say that the tech company is having “discussions across the board with all of those technologies.”
President Donald Trump said at the World Economic Forum in January that he will employ emergency powers to expedite the construction of power plants for data centers, indicating the facilities can use any fuel source.
Chevron and GE Vernova unveiled their plan to build gas plants for data centers shortly after Trump’s statements.
“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 responded when asked about the Trump administration’s plans.
Nevertheless, deploying natural gas presents its own set of challenges. The expenses associated with newly built natural gas plants have tripled. According to John Ketchum, CEO of NextEra, the largest developer of renewables in the U.S., the lead time for plant construction extends to 2030.
“Renewables are ready to go right now because they’ve been up and running,” Ketchum said at a 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 that nuclear power is unlikely to be a viable solution until 2035. NextEra is considering plans to restart the Duane Arnold nuclear plant in Iowa.
