Microsoft weighs natural gas with carbon capture to power AI data centers

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🗞️ Driving the news: Microsoft is exploring the use of natural gas with carbon capture to power its AI data centers, according to VP of Energy Bobby Hollis
• The company will only pursue the technology if it proves to be “commercially viable and cost-competitive”
• This comes as Microsoft searches for reliable energy sources amid skyrocketing AI-driven electricity demand

🔭 The context: Carbon capture for natural gas plants relies on federal incentives like the 45Q tax credit and EPA regulations requiring CO2 filtration
• However, both policies face political uncertainty, with proposed legislation to repeal 45Q and broader scrutiny of EPA mandates
• Microsoft has already turned to nuclear power, signing a 2023 deal to restart the Three Mile Island plant

🌍 Why it matters for the planet: AI data centers require vast amounts of energy, and how they are powered will shape global emissions trends
• If Microsoft adopts natural gas with carbon capture, it could set a precedent for lower-carbon fossil fuel use
• However, critics argue that investing in gas infrastructure could lock in fossil dependency rather than accelerating renewables

⏭️ What's next: Major energy firms like Exxon Mobil and Chevron are already developing AI-focused gas plants with carbon capture, aiming for operations by 2027
• Microsoft’s decision will likely depend on the long-term viability of tax credits and regulatory stability
• The industry is closely watching how AI-driven energy needs will reshape power markets and decarbonization efforts

💬 One quote: “That absolutely would not be off the table.” – Bobby Hollis, Microsoft VP of Energy, on using natural gas with carbon capture

📈 One stat: Chevron’s planned gas plant with carbon capture could provide up to 4 gigawatts of power, with operations starting in 2027

See here detailed sustainability performance of companies like Chevron, Exxon Mobil and Microsoft 

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