AI continues to reshuffle power and energy markets with even oil giants like Exxon Mobil moving into the combo.
Exxon announced this week that it’s planning to construct an influence plant for data centers, reflecting just how much electricity tech corporations expect they’ll need in the approaching decade. Based on one estimate, nearly half of recent AI data centers won’t have enough power by 2027.
The oil and gas company already operates power plants for its own operations, but the brand new project could be its first for outdoor customers. The planned power plant would run on natural gas and generate over 1.5 gigawatts.
In a twist, Exxon said that it intends to capture and store over 90% of the carbon dioxide the plant produces.
The corporate isn’t planning to attach the facility plant to the grid, avoiding the interconnection backlog that has plagued many recent power plants. In an annual strategy document published Wednesday, Exxon described the brand new project as “reliable, fully-islanded power with no reliance on grid infrastructure.” It didn’t say where the facility plant could be positioned. Exxon didn’t reply to a request for comment before publication.
The power ought to be accomplished inside the subsequent five years, the corporate told The Latest York Times. That’s a shorter timeline than most nuclear power plants, which have caught the attention of energy-hungry tech firms. Most of those aren’t scheduled to come back online until the early 2030s.
But Exxon faces stiffer competition with renewables, which have proven quick to deploy and proceed to drop in price. Google’s recently announced renewable energy investment, which including partners will total $20 billion, will start sending electrons to the grid in 2026. Microsoft is contributing to a $5 billion, 9-gigawatt renewable portfolio that has already made its first investment; the inaugural solar project is scheduled to come back online six to nine months from now.
Complicating matters for Exxon is the undeniable fact that carbon capture and storage (CCS) adds considerable cost to construction and operation of a fossil fuel power plant. To this point, there are only a handful of power plants worldwide that capture a few of their carbon pollution, according to the Global CCS Institute, and none of them run on natural gas. Which will change given the tax credits available under the Inflation Reduction Act, which provide between $60 to $85 per metric ton of carbon captured and stored.
Still, the technology has some kinks to work out on the industrial scale. Some have hit their targets, while others have fallen far short. One long-running CCS facility in Canada promised to capture 90% of the carbon dioxide from a small coal plant, yet after nearly a decade in operation, it managed to capture slightly below 60%, according to the Institute for Energy Economics and Financial Evaluation.
