PG&E Explores Gas Grid for Data Centers Amid Surge in Demand
PG&E, California's leading energy provider, is facing a surge in demand for fossil gas from data centers, which could lead to system constraints. Despite this, the company is exploring ways to leverage its gas transmission grid to power these data centers more quickly than the state's electric grid.
PG&E's gas transmission system, with significant underground storage, can withdraw gas during peak demand. This, coupled with the company's lack of concern about gas-powered data centers hindering its 2040 net-zero emissions goal, has led to exploration of using excess capacity on its fossil gas transmission grid for data centers.
Hyperscalers, seeking fast access to power, have driven a frenzy of gas-powered data center announcements and pipeline expansions. PG&E plans to spend $73 billion by 2030 to upgrade its transmission system, largely due to new demand from these hyperscale data centers. However, PG&E is cautious about overbuilding infrastructure and seeks long-term commitments from data centers. The company estimates it could provide power to data centers in 18 to 24 months, faster than California's electric grid interconnection queue.
PG&E is navigating a complex landscape of high demand, limited capacity, and ambitious emission reduction goals. While it explores leveraging its gas transmission grid for data centers, the company remains mindful of potential constraints and seeks long-term commitments. The exact timeline for providing power to data centers depends on various factors, including infrastructure expansion and regulatory approvals.
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