3 ms·

The cost of gas is completely irrelevant. In order to bring a new large load onto the grid, you have to coordinate with ERCOT, and they just made that process

by stonogo 4mo ago

The cost of gas is completely irrelevant. In order to bring a new large load onto the grid, you have to coordinate with ERCOT, and they just made that process more tedious. Once you get your grid connection approved and built out, you have to source your own power anyway, and frankly there just isn't enough power on the market to realize the stated datacenter buildout goals in this country. In short, you're going to have to build your own power plant anyway, so why bother with the grid? Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Unless you're dealing with nuclear, the fuel cost just doesn't matter compared to the rest of the buildout, and gas wins because you can take off-the-shelf turbines and bolt them down. You can only get away with it in places that don't care about environmental regulations, which are the places most likely to approve new buildout of gas infrastructure anyway. Nobody in the northeast is going to approve the creation of a brand new carcinogen factory.

epistasis 4mo ago
> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, partnering with one of them and launching the project early while waiting on the interconnection queue, and adding enough batteries, gives a more robust solution right now without the SPOF nature of large single generators. Add to that the long backorder list for gas turbines right now, with no end in sight, and I'm surprised that Microsoft would power this particular location with turbines because it's probably their best chance to do off-grid massive solar projects. Massive off-grid solar is what China is choosing for some absolutely massive new industrial projects. Nuclear is a no-go because it takes so long to deploy, but solar + batteries are cheap COTS and available in abundance, unlike gas turbines.
- stonogo 4mo ago
  > Is it, though? Yes. There is no point in waiting for interconnection when you can just... not do that, and do all your generation behind the meter, with complete control of the generation to match your load. Solar wants an interconnect so they can sell off surplus; with gas you just turn the dial down to meet the load and walk away. The clock is running on the datacenter goldrush. 70-90% of the capex window is going to be soaked up just with construction time. Introducing a capricious ERCOT permit process and shopping around for friendly solar projects to hop in bed with makes no sense when you can just write a check and solve the problem forever. I'd bet the deal with Chevron was to enable Microsoft to hop the queue here and get those GEV turbines soonest.
  - epistasis 4mo ago
    I'm not saying wait for an interconnection, I'm saying take a project that already has a fully developed plan, that's waiting for interconnection, and build the DC right there next to it, beef up the battery component of the plan and go to town. Interconnection happens some time in the future, giving far more financial opportunities for everyone, but in the interim the electricity goes fully to the DC.
    - alex43578 4mo ago
      Because I expect the economics of enough batteries to carry a data center’s worth of demand through the night and morning is too expensive compared to essentially free natural gas. Data centers would ideally run at ~100% utilization, so any drop in solar output needs to be fully met by batteries.
      - jeffbee 4mo ago
        > Data centers would ideally run at ~100% utilization I don't think this is broadly accepted among major data center operators.
        Matticus_Rex 4mo ago
        IIRC ERCOT estimated from their experience it was something like 85% on average?
        pixl97 4mo ago
        Of conventional data centers or one's running GPUs? If you're not saturating your GPUs you're likely leaving money on the table.
        jeffbee 4mo ago
        I don't really agree. The energy component of opex still dominates over the depreciation.
- chasd00 4mo ago
  > Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, gas turbines run at night too so there's no storage/backup supply issue to consider. They also take up significantly less space than wind or solar and those data centers are already gigantic.
- dopa42365 4mo ago
  >Add to that the long backorder list for gas turbines right now If demand > supply then the price goes up. Doesn't mean you can't buy something though.
- caminante 4mo ago
  Good luck. The renewables overbuild required to firm baseload demand for a datacenter is insane. You need something like 4x solar and 1.5x storage in a 10hr battery. Respectfully, the laws of NPV and IRR hurdles don't matter in Chinese infrastructure. Whatever you choose in the US, it's not cheap, and developers crawl over each other to sign up hyperscalers. Race to the bottom.
- cucumber3732842 4mo ago
  >Is it, though? When you can colocate across the street from someone who's otherwise paying to get rid of it is. When the fuel is free-ish who cares about backorder on turbines. You can run big diesels on NG (just like the pipeline people do).
- jillesvangurp 4mo ago
  Gas turbine production is fully committed for years to come. There is no way to speed up production quickly. And for manufacturers of turbines, building new production capacity is a highly risky proposition because demand might well evaporate for these things. So they are reluctant to do that. If you want power quickly, wind, solar, and battery can be planned, installed, and producing power within a couple of years. Nothing else comes close to being that quick. If you want power this decade, that's pretty much the only thing available.
iririririr 4mo ago
hopefully when the Ai bubble burst, all those new renewable plantals will be feeding the grid. and power will be the Aeron chairs of 2030.
protocolture 4mo ago
>so why bother with the grid? To sell excess back to the grid when funny things happen to texans in the winter?
jtbaker 4mo ago
> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Last I heard the wait time for turbines was ~5 years at the moment. I'm sure MSFT has some inside baseball with Chevron but it doesn't work as a general rule of thumb.

by stonogo 4mo ago

epistasis 4mo ago

> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, partnering with one of them and launching the project early while waiting on the interconnection queue, and adding enough batteries, gives a more robust solution right now without the SPOF nature of large single generators. Add to that the long backorder list for gas turbines right now, with no end in sight, and I'm surprised that Microsoft would power this particular location with turbines because it's probably their best chance to do off-grid massive solar projects. Massive off-grid solar is what China is choosing for some absolutely massive new industrial projects. Nuclear is a no-go because it takes so long to deploy, but solar + batteries are cheap COTS and available in abundance, unlike gas turbines.

stonogo 4mo ago
> Is it, though? Yes. There is no point in waiting for interconnection when you can just... not do that, and do all your generation behind the meter, with complete control of the generation to match your load. Solar wants an interconnect so they can sell off surplus; with gas you just turn the dial down to meet the load and walk away. The clock is running on the datacenter goldrush. 70-90% of the capex window is going to be soaked up just with construction time. Introducing a capricious ERCOT permit process and shopping around for friendly solar projects to hop in bed with makes no sense when you can just write a check and solve the problem forever. I'd bet the deal with Chevron was to enable Microsoft to hop the queue here and get those GEV turbines soonest.
- epistasis 4mo ago
  I'm not saying wait for an interconnection, I'm saying take a project that already has a fully developed plan, that's waiting for interconnection, and build the DC right there next to it, beef up the battery component of the plan and go to town. Interconnection happens some time in the future, giving far more financial opportunities for everyone, but in the interim the electricity goes fully to the DC.
  - alex43578 4mo ago
    Because I expect the economics of enough batteries to carry a data center’s worth of demand through the night and morning is too expensive compared to essentially free natural gas. Data centers would ideally run at ~100% utilization, so any drop in solar output needs to be fully met by batteries.
    - jeffbee 4mo ago
      > Data centers would ideally run at ~100% utilization I don't think this is broadly accepted among major data center operators.
      - Matticus_Rex 4mo ago
        IIRC ERCOT estimated from their experience it was something like 85% on average?
      - pixl97 4mo ago
        Of conventional data centers or one's running GPUs? If you're not saturating your GPUs you're likely leaving money on the table.
        jeffbee 4mo ago
        I don't really agree. The energy component of opex still dominates over the depreciation.
chasd00 4mo ago
> Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, gas turbines run at night too so there's no storage/backup supply issue to consider. They also take up significantly less space than wind or solar and those data centers are already gigantic.
dopa42365 4mo ago
>Add to that the long backorder list for gas turbines right now If demand > supply then the price goes up. Doesn't mean you can't buy something though.
caminante 4mo ago
Good luck. The renewables overbuild required to firm baseload demand for a datacenter is insane. You need something like 4x solar and 1.5x storage in a 10hr battery. Respectfully, the laws of NPV and IRR hurdles don't matter in Chinese infrastructure. Whatever you choose in the US, it's not cheap, and developers crawl over each other to sign up hyperscalers. Race to the bottom.
cucumber3732842 4mo ago
>Is it, though? When you can colocate across the street from someone who's otherwise paying to get rid of it is. When the fuel is free-ish who cares about backorder on turbines. You can run big diesels on NG (just like the pipeline people do).
jillesvangurp 4mo ago
Gas turbine production is fully committed for years to come. There is no way to speed up production quickly. And for manufacturers of turbines, building new production capacity is a highly risky proposition because demand might well evaporate for these things. So they are reluctant to do that. If you want power quickly, wind, solar, and battery can be planned, installed, and producing power within a couple of years. Nothing else comes close to being that quick. If you want power this decade, that's pretty much the only thing available.

iririririr 4mo ago

hopefully when the Ai bubble burst, all those new renewable plantals will be feeding the grid. and power will be the Aeron chairs of 2030.

protocolture 4mo ago

>so why bother with the grid? To sell excess back to the grid when funny things happen to texans in the winter?

jtbaker 4mo ago

> Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Last I heard the wait time for turbines was ~5 years at the moment. I'm sure MSFT has some inside baseball with Chevron but it doesn't work as a general rule of thumb.