Prime Highlights:
The tech giant is considering using natural gas with carbon capture technology to power AI data centers if it proves commercially viable and cost-competitive.
Microsoft aims to match all its electricity consumption with carbon-free energy by 2030 and has already secured over 30 gigawatts of renewable power.
Key Background:
In response to the growing energy demands of artificial intelligence (AI) data centers, Microsoft has expressed openness to utilizing natural gas powered by carbon capture technology. Bobby Hollis, Microsoft’s Vice President of Energy, indicated that while the company remains committed to carbon-free energy, natural gas with carbon capture could be a viable solution if commercially competitive and cost-effective.
Microsoft, which has set ambitious goals to match its energy consumption with renewable sources by 2030, has already procured over 30 gigawatts of renewable energy to meet these targets. However, the tech industry is increasingly recognizing that renewable power alone may not be sufficient to meet the rising energy needs of data centers. Consequently, alternatives such as nuclear and natural gas have come into focus.
ExxonMobil and Chevron have already announced plans to develop natural gas plants with carbon capture for data centers, signaling a shift towards this energy source. Despite the carbon emissions associated with natural gas, the technology industry’s reliance on it is growing due to its ability to meet immediate power requirements.
Hollis acknowledged that while fossil fuels will not disappear rapidly, natural gas remains a practical near-term solution for powering AI deployments. Microsoft’s interest in this approach follows the broader trend of the energy sector exploring carbon capture technology, which can capture carbon dioxide emissions and store them underground. However, the high costs of scaling carbon capture technology remain a challenge for widespread adoption.
While natural gas is a potential solution, the development of new natural gas plants faces delays due to rising costs and extended construction timelines. Nevertheless, experts, including those from companies like NextEra, believe that renewables, which are more readily available, will continue to play a significant role in meeting energy needs.
