Fueling the Growth of Data Centers with Natural Gas Power

Traditional Grid and Renewable Energy Integration

Historically, data centers relied primarily on electricity from the local and regional grid. Over recent years, many large tech companies have committed to powering their data centers with 100 percent renewable energy to meet sustainability goals. Typically, this is achieved with solar and wind power, either through direct on-site installations or through power purchase agreements (PPA) with renewable energy suppliers. On-site solar arrays, can supply daytime energy needs and reduce dependence on the grid, while wind farms provide complementary generation, especially in regions with favorable wind conditions.

However, the intermittent nature of renewable energy sources poses challenges for the continuous uptime required by data centers. To mitigate this, energy storage technologies, such as lithium-ion or lithium-nickel batteries, have been deployed to store excess renewable energy for use during periods of low generation. Emerging technologies, like flow batteries and even hydrogen storage, are also being explored for their potential to provide longer-duration energy storage. Despite these advancements, enhancing the reliability and sustainability of data center operations is still necessary.

Natural Gas for Reliable, Flexible Power…with a Caveat

With the increasing demand for data centers energy use and the need for more steady power, independent power producers and data center developers are turning to natural gas power technologies, which are becoming favored. Options for gas plants include single-cycle combustion gas turbines, reciprocating engines (recips), or larger generating combined cycle gas turbines (CCGT) that can serve as peaking, intermediate, or baseload power sources. Other turbine technologies may be available, such as cogeneration plants or aeroderivative gas plants, depending on potential uses of byproducts.

Engine type choice often depends on the required demand and load flexibility. Single-cycle turbines and recips are valued for their quick startup times (typically within three minutes), rapid output adjustments, and efficient operation across varying loads, making them essential for grids relying on intermittent renewable energy. In contrast, CCGTs take longer to start, but deliver continuous, high-capacity intermittent or even base-load power.

Rapid deployment of natural gas power plants also has its challenges. Due to the recent surge in demand, manufacturers have a backlog of orders, limiting the availability of turbines in the near term. Additionally, water requirements for CCGTs, data center cooling, and air emissions permitting timelines must be carefully evaluated during the siting process. This is where Tetra Tech can help. We have assisted clients in securing accessible water sources either through new groundwater wells, procuring existing irrigation well yields, or via surface water permits. We also bring hands-on experience navigating the regulatory process efficiently and within tight timelines.

Regardless, natural gas engines can supply reliable power and offer flexibility to meet fluctuating electrical demand through quick startup and deliver cleaner energy compared to traditional diesel generators or coal plants.

Bringing the Best Together with Microgrids

To enhance resilience and control over energy supply, some data centers are developing microgrids—localized grids that can operate independently from the main grid. Microgrids integrate multiple energy sources, including on-site gas plant generators, energy storage, and even co-located renewables, enabling data centers to maintain operations off the grid or during grid outages to optimize energy costs and emissions. Additionally, advancements in energy management software and AI-driven optimization enable real-time monitoring and adaptive control of energy consumption, further improving efficiency and integration of diverse energy sources.

The Path Forward

The data center boom presents an energy challenge and an opportunity for innovation. Natural gas power plants play a key role in providing reliability and flexibility, backed by the support of an extensive network of pipelines to meet the immediate energy needs. Although the limited availability of larger capacity CCGTs poses a challenge, combining combustion turbines and reciprocating engines with energy storage is being used whenever possible. In this evolving landscape, enhancing operational flexibility is essential for plants to efficiently manage data center load variations while optimizing the dynamic performance of equipment and processes.

Some have suggested that natural gas is a bridge to the next energy technology, such as small modular reactors (SMR). Despite the significant hurdles, the deployment of SMRs is expected to accelerate significantly over the next decade. Tetra Tech’s Sam Khalilieh believes that SMRs will be crucial in replacing fossil fuels, stabilizing renewable grids, and expanding energy access. It will require the right combination of engineering, design, and infrastructure solutions alongside deep understanding of compliance and regulatory requirements.

Tetra Tech has supported a wide variety of data center facilities and power generation sites across the globe. We deliver cohesive solutions that maximize energy efficiency, ensure reliable power, simplify coordination, reduce costs, and accelerate timelines to keep pace with, and in some cases, get ahead of the power needs of an increasingly digital world.