The race to power artificial intelligence is quietly reshaping the global energy map, and not necessarily for the better.
From Silicon Valley to Tennessee, some of the world’s biggest technology companies are leaning heavily on natural gas to keep their expanding fleets of data centres running. What began as a pragmatic solution to rising electricity demand is now morphing into a costly and potentially dangerous dependency, with consequences that stretch far beyond balance sheets.
Recent estimates suggest the environmental cost alone could rival that of entire nations.
AI data centres drive surge in gas power demand and costs
A simple problem is driving the shift towards gas: AI needs power, and lots of it. Data centres are among the fastest-growing consumers of electricity, with demand expected to jump from 40 gigawatts today to 106 gigawatts by 2035. Increasingly, these facilities are massive, with future sites expected to average over 100 megawatts.
To keep up, companies such as Microsoft and Meta are investing in dedicated gas-fired plants, often built directly alongside their data centres. These so-called “behind-the-meter” systems allow firms to bypass strained public grids and avoid political backlash over rising electricity bills.
But this strategy comes at a steep price.
The cost of building combined-cycle gas turbine plants has surged by 66 per cent in just two years, while construction timelines have lengthened significantly. Even more striking is the spike in turbine costs, up nearly 195 per cent since 2019, with supply bottlenecks pushing delivery timelines into the next decade, reports BloombergNEF.
In other words, the industry is doubling down on an energy source that is becoming both harder and more expensive to scale.
Greenhouse emissions from gas-powered data centres raise climate concerns
If the financial cost is rising, the environmental toll may be even more alarming.
A recent analysis, reports Wired, suggests that just 11 gas-powered data centres in the United States could emit more greenhouse gases annually than entire countries with populations in the tens of millions. Combined, these facilities could release up to 129 million tonnes of emissions each year, exceeding the footprint of nations like Morocco.
The rapid growth of behind-the-meter gas projects is a major contributor. Capacity is expected to surge from just 4 gigawatts in early 2024 to 100 gigawatts by 2027, according to energy monitoring groups. Experts warn that this marks a sharp reversal after years of progress in phasing out fossil fuels.
There are also high-profile examples amplifying concern. New mega data centre campuses under development in Tennessee, linked to Elon Musk, could individually rival the emissions of countries such as Iceland.
This model risks locking in long-term dependence on fossil fuels at precisely the moment when industries should be accelerating towards cleaner alternatives.
Not everyone is following the same path, however.
Some companies are exploring renewable-heavy strategies, pairing solar and wind with long-duration storage technologies such as iron-air batteries capable of delivering power for up to 100 hours. These systems, while still emerging, offer a glimpse of a lower-cost and lower-carbon future.
For now, though, the gravitational pull of gas remains strong.
The irony is difficult to ignore: the very infrastructure powering the next generation of intelligent systems may be entrenching one of humanity’s oldest problems: reliance on fossil fuels.
