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Big Tech is building its own ‘power grid’ to help fuel data centers desperately needed for AI
Big tech companies are reportedly developing their own isolated, off-grid data centers where they can consume resources to provide the storage and compute needed for AI development and other digital services, according to a new report.
The GW Ranch project will see 8,000 acres of land in West Texas turned into an entirely off-grid data center facility that will consume more energy than the entire city of Chicago, according to The Washington Post.
The new project will generate all of its own electricity through natural gas and solar panels and—crucially for tech companies—won’t have to wait around for utilities to solve power availability issues.
The GW Ranch project is just one of several off-grid data center undertakings planned at sites in Wyoming, New Mexico, Pennsylvania, Utah, Ohio, and Tennessee, according to regulatory filings, permits, and other documents reviewed by the Post.
Several of the projects are already under construction. The builds are being pushed by big-name players in the world of tech: Meta, OpenAI, Oracle, and Chevron, to name a few.
Some states have already passed legislation making it easier for data center projects to set up shop.
In West Virginia, a new off-grid data center is being planned near the city of Davis. The project will include a gas plant large enough to produce enough power to fuel every home in the state.
“They removed local control completely for this speculative gold rush,” Amy Margolies, a resident fighting against the development, told the paper. “Everything is shrouded in secrecy, and the public is removed from the process.”
Some 5,246 data centers are operating in the U.S., according to the most recent information from the Data Center Map project, collectively consuming at least 17 gigawatts of power. A large nuclear power generator produces 1 gigawatt of energy, which can power between 300,000 and 750,000 homes.
In the race for AI dominance, countries are rolling out data centers at breakneck speed to cope with the immense amounts of compute needed.
Though the off-grid centers will incorporate solar power, most will rely on natural gas because more sustainable fuels provide less consistent output. Without an electric grid to act as a backup, natural gas will be the primary power source for the facilities. That will no doubt mean an increase in emissions at a time when human-driven climate change is already causing more frequent severe weather across the country.
“It is catastrophic for climate goals,” Michael Thomas, founder of Cleanview, an energy industry research group, told the Post. Cleanview has identified 47 off-grid data center projects across the country.
Even though the data centers will be off-grid, that doesn’t mean that typical ratepayers are isolated from the consequences of these developments.
Jigar Shah, an energy entrepreneur who helped manage federal energy investments under the Joe Biden administration, told the Post that tech companies, with their virtually limitless resources, will now be competing for maintenance and equipment against public utilities.
If it takes longer—or becomes prohibitively expensive—for utility companies or public utility agencies to access equipment, they will have to pour more money into trying to maintain older infrastructure. The cost of those rising maintenance expenses will almost certainly be passed on to ratepayers. In other words, their bills will go up.
“This whole thing feels like a fairy tale concocted on the back of a napkin,” Shah said.
Tech companies trying to build data centers on regional power grids have, in some cases, been throttled by how much energy grid operators can provide to their projects while still serving regular ratepayers.
That’s one of the reasons Elon Musk opted last year to build an entirely off-grid data center in Memphis. Bypassing the local grid allowed him to get the data center—used by his xAI company—running in a matter of months rather than years. His project is powered by dozens of portable gas generators: efficient, but not without environmental costs.
The Environmental Protection Agency ruled last month that Musk’s setup illegally breached emissions rules and told xAI to obtain permits for its generators.
When data centers do try to set up shop in populated areas, they’ve faced opposition from locals who do not want the noise and emissions pollution in their neighborhoods or who balk at the massive water and energy use—and the inflated energy bills that come along with the projects.
A large data center can consume up to 5 million gallons of water per day—the equivalent of a town of 10,000–50,000 people—according to the Environment and Energy Institute.
A group of concerned citizens in Tucson, Arizona, managed to defeat a proposal for a large data center in the city called “Project Blue,” citing water usage in the already parched desert and the potential for increased energy bills.
Data center operators no doubt hope to mitigate some of the public’s concerns by building off-grid.
“As designed, it is intended to operate independently and does not rely on ratepayer-funded infrastructure or impact existing residential customers,” Fundamental Data, the company building the Davis, West Virginia, data center, told the Post.
Though many of the tech companies backing the off-grid data centers have kept their names off the projects until they’ve gone through the permitting and clearance process, Meta has been upfront about its upcoming builds.
The parent company of Facebook has one project underway called Socrates in New Albany, Ohio, that will use a pair of off-grid gas power plants to provide its energy needs. That site is scheduled to go live later this year.
Meta is also building data centers in El Paso, where it’s working with a local utility provider to build a gas-generating facility through the linking of 813 smaller generators. Local and city officials protested the project, claiming Meta only received approval to build by stating the site would use clean energy.
El Paso Electric, Meta’s local energy partner, wrote in regulatory filings that to power the site using solar panels and battery storage, it “would require thousands of acres adjacent to the Data Center site which are not available,” according to a Texas Tribune report.
Meta said in a statement to the Post that it plans to fulfill its clean energy obligation by buying clean energy and adding it to the grid.
“As with all of our data centers, including dozens of renewable projects throughout Texas, we work to add energy to the grid and match our data center’s electricity use with 100% clean and renewable energy,” the statement said.
Shah is skeptical about the projects, noting that even with tech companies’ deep pockets, they can’t ensure uninterrupted reliability without the security of a major grid.
“I get that cost is no object for these companies and they just want to get online,” Shah told the Post. “But they have not figured out even with unlimited funds how to make these plants run with 24/7 reliability.”