AI continues to reshape power and energy markets, and even oil giants like ExxonMobil are getting in on the act.
Exxon this week announced plans to build power plants for its data centers, reflecting how much the power technology company expects to need them over the next decade. By 2027, nearly half of new AI data centers may not have enough power, according to some estimates.
Oil and gas companies already operate power plants for their own operations, but the new project will be the first for an external customer. The planned power plant will run on natural gas and will generate more than 1.5 gigawatts of electricity.
In a twist, Exxon said it intends to capture and store more than 90% of the carbon dioxide its factories produce.
The company has no plans to connect the plant to the power grid to avoid interconnection logjams that plague many new power plants. In its annual strategy document released Wednesday, Exxon described the new project as “reliable, fully independent power that does not rely on grid infrastructure.” He did not say where the power plant would be located. Exxon did not respond to requests for comment before publication.
The facility should be completed within the next five years, the company told The New York Times. That's a shorter schedule than most nuclear power plants that have come to the attention of energy-hungry tech companies. Most of them will be online until the early 2030s.
But Exxon faces increasing competition from renewable energy. Renewable energy has proven to be fast-tracked and continues to fall in price. Google recently announced investments in renewable energy totaling $20 billion, including partners, and plans to start sending electrons to the grid in 2026. Microsoft is contributing to a $5 billion, 9 gigawatt renewable energy portfolio and has already made its first investment. The first solar projects are expected to start in six to nine months from now.
Complicating matters for Exxon is the fact that carbon capture and storage (CCS) makes fossil fuel power plants significantly more expensive to build and operate. So far, only a handful of power plants around the world capture some of their carbon pollution, and none run on natural gas, according to the Global CCS Institute. The situation could change given the tax credits available under the Inflation Control Act, which range from $60 to $85 per tonne of carbon captured and stored.
Still, there are some problems with this technology that need to be resolved on a commercial scale. Some companies have met their goals, while others have fallen far short. One of Canada's longest-running CCS facilities had promised to capture 90% of carbon dioxide from small coal-fired power plants, but according to the Institute for Energy Economics and Financial Analysis, nearly a decade has passed. After operation, we managed to recover just under 60%. .