Caterpillar, one of the world's largest manufacturers of industrial equipment, has partnered with US microgrid company OnePWR and carbon management firm Vero3 on the development of large-scale power generation and carbon storage projects for data centers and other mission-critical facilities.

The partnership will see the companies collaborate on the design of a fully integrated solution that will combine natural gas prime power, carbon capture, battery energy storage, and permanent geological sequestration of CO2.

The first project is expected to launch in 2026, with an initial commitment to develop 500MW of prime power generation. The companies claim that the first project will lay the foundations for further global deployment. The location of the first project has not been disclosed.

Caterpillar will provide the power generation equipment, including natural gas and diesel generation equipment, gas turbines, and controls, as well as leading front-end engineering and design (FEED) activities for carbon capture systems. OnePWR will build, own, and operate the power generation and associated infrastructure, and Vero3 will develop, own, and operate the carbon sequestration infrastructure.

The deal is Caterpillar's latest within the data center sector, with the company increasingly focusing on the market as a key growth driver.

In January, the company partnered with AI infrastructure developer American Intelligence & Power Corporation (AIP Corp) to supply 2GW of fast-response natural gas generators for AIP’s planned up to 8GW Monarch Compute Campus in Mason County, West Virginia.

Before this, in August of last year, the company partnered with power infrastructure developer Hunt Energy on a multi-year initiative to deliver upwards of 1GW of generation capacity for data centers in North America.