Speaking to CNBC on Tuesday, Microsoft VP of Energy Bobby Hollis said the company is considering using natural gas with carbon capture technology to power its artificial intelligence (AI) data centers as demand surges, according to , the company’s vice president of energy.
“That absolutely would not be off the table,” Hollis told CNBC, emphasizing that Microsoft would only pursue the carbon capture option if it is “commercially viable and cost-competitive.”
As it stands companies developing carbon capture rely on federal tax credits like the 45Q to make the technology viable. EPA requirements for natural gas plants also mandate that new plants have CO2 filters that allow for the transportation and storage of the gas.
But both the 45Q and EPA requirements are not guaranteed to continue being in force. Earlier in March Rep. Scott Perry (R) proposed legislation to repeal the tax credit, while the EPA as a whole is facing scrutiny under the new administration.
Even before the AI surge reached its peak Microsoft had been looking for alternative energy sources and in 2023 it turned to nuclear power, putting pen to paper on an agreement to restart the Three Mile Island plant.
Natural gas with carbon capture – the answer for power hungry data centers?
Building natural gas plants with carbon capture technology could be seen as energy companies hedging their bets, as the new administration’s desire to develop natural gas come to the fore, while keeping an eye on the mid and long-term when a more climate-friendly voice could once again be heard from the White House.
ExxonMobil and Chevron have both announced plans for developing natural gas plants with the emission capturing units recently.
In December Exxon said it aims to commence operations within five years of starting its project, offering a faster timeline compared to alternative low-carbon energy sources like nuclear or geothermal power. This will be possible because of the unusual decision not to connect the future plant to the electric grid, making it AI customer-focused by design.
In January, Chevron also showed progress by partnering with GE Vernova for an ever faster plant construction that would start operations by 2027 and provide up to four gigawatts of power.
Another partnership also confirmed the growth trajectory of this combined approach, with Baker Hughes teaming up with Frontier Infrastructure. Baker Hughes will contribute with its know-how in the areas of CO2 compression, well design and monitoring of storage wells, allowing Frontier to develop its Sweetwater Carbon Storage Hub in Wyoming.
Read more: Exxon Wants To Satiate Power-hungry Data Centers With Natural Gas & Carbon Capture
