Tech companies like Microsoft and Meta have turned to natural gas to power their expanding data centers, but the enthusiasm comes at a cost. A new report from BloombergNEF reveals that the expense of constructing a new combined cycle gas turbine (CCGT) power plant has surged by 66% over two years, reaching $2,157 per kilowatt of generating capacity in 2023.

The rise is due to growing demand for electricity from data centers, with the number expected to increase tenfold by 2035. This growth has prompted a scramble among utilities and tech companies alike to secure power sources, driving up natural gas prices and equipment shortages.

While some governments urge data center operators to source their own power through agreements for renewable energy, others are embracing natural gas due to the sheer scale of new facilities. The average data center is set to expand from 10% to more than 100 megawatts over the next decade, pushing up costs and causing wait times for essential equipment.

Despite these challenges, not all tech companies are jumping on the natural gas bandwagon. Google has begun exploring renewable energy paired with advanced storage solutions like iron-air batteries, which can release electricity over 100 hours. This approach offers a cheaper alternative to the skyrocketing costs of new natural gas projects.

As data centers continue to grow in importance and size, their impact on our energy infrastructure will only become more pronounced. The race for green and reliable power sources is far from over, and the future may well be one of increasing complexity and cost.