Data center demand inflates natural gas plant costs

The escalating demand for electricity, largely driven by AI-powered data centers, is causing a significant surge in the cost of building natural gas power plants. Costs have risen 66% in two years, with construction times also increasing. This surge is partly due to a shortage of gas turbines, a critical component, with prices expected to jump nearly 200% over 2019 levels. Tech giants like Microsoft and Meta are heavily investing in these plants, but the rising expenses and longer lead times present challenges. Some companies, like Google, are exploring alternatives such as renewables paired with long-duration energy storage.