Fueling the AI Era: How Data Centers Rely on Natural Gas 

  • Adam Kay
  • Have you ever wondered what happens when a data center loses power unexpectedly? It happens more often than you might think, with approximately 78% of surveyed data centers having lost power over the three years between 2017 and 2020. The consequences can be devastating. Customer data can be lost, critical information can be made vulnerable to hacking, and the cooling systems that keep large servers from melting under their own heat can stop. Data centers that lose power can incur costs of more than $100,000 from unplanned outages—a not unsignificant financial impact. As a result, reliable energy is a priority for both data center operators and the Americans who rely on them, often without even realizing it. 

    As artificial intelligence continues its explosive growth in both capabilities and power demand, maintaining reliability for data centers is becoming harder while at the same time becoming ever more important. Natural gas is the best tool currently available for helping data centers avoid potentially catastrophic power outages. 

    There are three main ways that natural gas keeps data centers reliable. Natural gas has gone from a relatively small share of power generation – 141 GW of generating capacity in 1992, less than half as much as coal – to over 500 GW of generation capacity, or more than 2.5 times as much as coal’s share of the generation capacity in 2022. With utilities across America investing in bringing more natural gas power plants online to meet the AI-driven demand surge, it’s safe to say that natural gas is here to stay in providing power to data centers. 

    Natural gas also offers critical indirect benefits to data centers. If you’re one of the 187 million Americans that uses natural gas for heating, cooking, laundry, or other forms of direct use in your home, you’re helping to keep the electrical grid stable during times of high demand by keeping the demand for electricity lower. The natural gas system delivers three times as much energy on the coldest day of the year as the power grid does on the hottest day. Every home that is heated or meal that is cooked with natural gas is a home or a meal that didn’t need to draw that energy from the electric grid. Simply by existing, the natural gas delivery system flattens the demand peaks for the electric grid, enabling the overall energy system to operate much more reliably. 

    The natural gas delivery system is extremely reliable. Fewer than one customer in 650 experiences a natural gas outage – planned or unplanned – in any given year. The average electric customer experiences one unplanned outage a year. When that customer is a data center that can lose tens or hundreds of thousands of dollars on an outage, that becomes a serious problem. Fortunately, critical facilities like hospitals and data centers can install combined heat and power (CHP) natural gas generators. These generators are fueled by natural gas. If there’s natural gas in the pipeline, a facility with a CHP generator has power. When outages risk losing customer data, CHP generators can be a great investment in reliability. 

    America’s energy requirements are poised to skyrocket as more data centers and factories come online. Natural gas is a key resource to meet demand affordably and reliably.