Data centers could potentially pay for gas-fired generation to power their facilities in the short term as a bridging mechanism to low carbon energy sources, according to Clair Moeller, president and chief operating officer of US grid operator Midcontinent Independent System Operator (MISO).
Speaking at the National Association of Regulatory Utility Commissioner's annual meeting, Moeller stated: “In the short run, it will be difficult to build a no- or low-carbon fleet because of [a lack of needed] technology.”
Rapid buildouts by data center operators are putting increasing pressure on utilities to meet their excessive power demands. MISO, in particular, is seeing significant growth across its footprint, with multi-GW proposals with near-term completion dates of two to three years. MISO serves a number of states including Illinois, Indiana, Iowa, and parts of Texas.
As a result, Moeller argued that data centers could rely on gas-fired generation in the short term to meet the sky-high demand. The power plants could then be used as emergency backup power for the grid.
However, significant trust would need to be built between the electric and gas industries to achieve this.
Moeller suggested that on-site gas storage could help eliminate the need for new pipelines. He added that liquefied natural gas stored on-site might also support pipeline peak shaving for the gas industry.
In addition, Moellar contended that other low-carbon technologies, such as small modular nuclear reactors, could be at least 20 years away from commercialization despite the increasing number of deals between SMR developers and data center operators.
Subsequently, according to Moellar, it is important for states to “find common ground” to find solutions to rising power demands.
MISO operates the electric transmission system or “grid” in portions of 15 Midwest and South states, plus the Canadian province of Manitoba.
Data centers are increasingly looking towards natural gas to fill the power gap for their data centers.
In early November, AltaGas CEO Vern Yu said its subsidiary Washington Gas was in discussions with customers about using the fossil fuel as a primary power source. According to Yu, the discussions were mainly driven by regional data center growth.
An October report from S&P Global found that demand for natural gas to support data centers could reach three to six billion cubic feet per day as the industry struggles to find power for an AI buildout.
While natural gas has lower emissions than coal or oil, it has more than ten times the emissions of solar power and 40 times the emissions of wind or nuclear power.
