US doubles down on gas power amid data center revolution

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Could Big Tech’s data centers remake the US power grid around natural gas?

Utilities and developers now plan 153 gigawatts of new gas-fired generation, based on S&P Global Market Intelligence data. That’s nearly double early-2025 plans, driven by fast-rising power demand.

S&P Global Energy CERA says this build-out is different because data center contracts help utilities lock in cost recovery and shift more risk to those large customers.

The biggest headline: SB Energy, backed by Japan’s SoftBank, plans a 9.2-GW gas plant in southern Ohio to supply a 10-GW data-center project.

And AEP is slated to develop a $4.2 billion transmission line to serve the data center, targeting power delivery in 2029, but pipeline capacity and multi-agency permits could slow timelines.

Costs are rising too. Wood Mackenzie expects gas turbine prices to hit $600/kilowatt by the end of 2027. That’s up 195% from 2019.

Bottom line: data centers are pulling gas build plans higher, but infrastructure, permitting, and demand uncertainty will decide what actually gets built.