US multinational oil and gas major ExxonMobil has revealed plans for a new 1.5GW natural gas-fired power plant dedicated to powering data centers.
The project is in the early stages of development. It would mark the first time Exxon has built a power plant that does not supply energy to its own operations.
The company began exploring the power business this year as it became clear that electricity demand was poised to skyrocket due to data center growth across the US.
Exxon said it would deploy carbon capture technology in unison with the gas-fired plant to capture more than 90 percent of the facility's emissions.
In a media call on Wednesday, Exxon’s CEO, Darren Woods, said: “There are very few opportunities in the short term to power those data centers and do it in a way that minimizes, if not completely eliminates, the emissions.”
Exxon did not disclose the location and cost of the new plant, but it has secured land for the facility and is currently in talks with potential data center companies that would buy the power.
“We’re being driven by the market demand here. It’s low carbon, it’s available on an accelerated timeline, and it avoids all the grid interconnection challenges,” said Dan Ammann, an Exxon executive, to The New York Times.
Whether and when Exxon moves forward with the project will depend on customer feedback, according to Ammann.
The announcement from Exxon reflects a broader market move, as natural gas demand increases to meet the rising energy demand of artificial intelligence data centers.
Last week, Meta announced a new $10 billion data center in Richland Parish, northeast Louisiana. The data center will be powered by three combined-cycle combustion turbines with a capacity of 2.26GW built and operated by Entergy Louisiana.
Subsequently, S&P Global concluded that demand for natural gas to support data centers could reach up to three billion cubic feet per day by 2030 on the low end and as high as six bcf/d on the high end.
As a result, natural gas is increasingly seen as a potential bridging mechanism to low-carbon energy sources. Last month, Clair Moeller, president and chief operating officer of US grid operator Midcontinent Independent System Operator, reported that data centers could potentially pay for gas-fired generation to power their facilities in the short term.
Despite this, there are concerns that even a significant expansion of gas power will fall short of the energy demand for data centers, especially within Virginia. A new report from Virginia’s Joint Legislative Audit and Review Commission has warned that to meet unconstrained data center growth, a new 1.5GW natural gas plant would be needed every two years for 15 consecutive years, equal to the busiest period of the last decade.
This is Exxon's first foray into power generation; however, it has previously invested in liquid cooling. Earlier this year, it partnered with Intel to develop new liquid-liquid cooling technologies for data centers.
In October 2023, ExxonMobil announced its move into data center cooling fluids, offering a “portfolio of synthetic and non-synthetic fluids” to keep hardware temperatures down. It plans to further develop its range with Intel's help.
