(The Center Square) - Strained electrical grids and long wait times to hook up to public utilities will push about 40% of all new data center capacity additions entirely off the main grid through 2030, according to energy research firm Enverus.
The report by Enverus Intelligence Research (EIR) projects hyperscalers will spend about $5 trillion through 2030 to add 62 gigawatts of off-grid, natural gas-fired power serving data centers clustered primarily in parts of Texas, Pennsylvania, and Ohio.
Faced with long waits to connect to the public grid, major tech hyperscalers like Amazon and Google are pushing back their short-term net-zero carbon pledges. To meet their immense, short-term power needs, these and other tech giants are building off-grid, privately controlled, “behind the meter” natural gas generation facilities.
“Everybody wants to come on the grid, but that has been pretty saturated to this point," Thomas Mulvihill, a research associate at Enverus, explained in an interview with The Center Square. "Now we're seeing a huge shift towards this behind-the-meter story. Tech companies aren't concerned with how quickly it takes them to build the data center shell; they are entirely constrained by time-to-power."
According to Enverus data, more than 80% of the off-grid, natural gas-powered data center growth will occur in Texas, the PJM market region, which covers Pennsylvania and Ohio, and the Western United States. The Austin-based energy analytics firm estimates this domestic off-grid natural gas demand will amount to 1.3 billion cubic feet per day in 2030.
Texas-based energy analyst David Blackmon ties the demand for gas-fired power generation to tech-sector economics, noting that the migration to gas-fired generation is driven by necessity rather than climate strategy.
"This isn’t a green revolution; it’s a gas-fueled sprint for speed and revenue," Blackmon wrote in an analysis of data center infrastructure. "With AI data centers raking in millions per megawatt annually, developers are prioritizing quick deployment over efficiency or eco-hype."
The scale of the grid bottleneck is most acute in Texas. The Electric Reliability Council of Texas is currently tracking more than 438 GW of large-load interconnection requests, with nearly 90% coming from data centers. For perspective, ERCOT’s all-time historical peak demand record is just 85.5 GW.
Because burning massive volumes of natural gas threatens corporate climate goals, the hyperscalers' decarbonization strategies are increasingly driven by regional geology. A 2024 Enverus study on underground carbon storage potential ranked Texas and neighboring Louisiana as the top two states in the nation for available pore space, the microscopic cavities in deep rock formations used to permanently trap carbon dioxide emissions, giving the two states a large advantage over Ohio and Pennsylvania in implementing decarbonization strategies.
Enverus’s 2024 study found that while carbon storage on the Gulf Coast can break even for as little as $8.70 per ton, only about 1% of Appalachian rock formations can be developed at a comparable price point under current federal subsidies.
"Texas has a big head start," Blackmon told the Center Square, noting that overall storage opportunity across both Louisiana and the Lone Star State is immense due to their deep geological formations.
Lacking the same deep storage geology, data center operators in Ohio and Pennsylvania cannot cheaply bury carbon emissions locally, and alternative plans to construct local wind or solar projects are stalled by PJM’s seven-year grid connection delays.
In the race to bring data centers online quickly, tech companies are increasingly choosing to deploy portable gas turbines and gas-powered fuel cells directly on-site, but these strategies are triggering pushback from environmental watchdogs. A coalition including the Sierra Club and the Environmental Integrity Project recently threatened to sue developers Vantage Data Centers and VoltaGrid over behind-the-meter gas-fired power generation in San Antonio, alleging that the two tech sector companies are exploiting a legal loophole to bypass federal Clean Air Act reviews.
"The developers are building massive power plants for a pair of huge data centers using permits meant only for minor sources of air pollution, allowing them to operate near residential neighborhoods without standard public disclosure or emissions monitoring," the coalition said in a legal challenge to the San Antonio data centers.
In April, the Environmental Integrity Project released a report indicating that 74 planned off-grid data center gas-fired power plants now under consideration in the United States could emit 662 million tons of greenhouse gases annually—a climate footprint matching the nation of Australia.
Mulvihill questions how long hyperscalers will want to remain off-grid given their rigid requirements for 99.995% operational uptime. "As time goes on—you've done four or five years behind the meter—do you not want to get an insurance connection to the grid?" Mulvihill asked.
How that inevitable demand for an "insurance connection" to the public grid plays out—whether it shifts infrastructure costs onto everyday utility ratepayers—will be decided in the years ahead, according to Mulvihill.
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