Exxon cannot resist the power of artificial intelligence

Artificial intelligence continues to change the power and energy markets, with even oil giants like Exxon Mobil getting into the mix.

Exxon this week announced plans to build a power plant for data centers, reflecting how much electricity technology companies expect to need over the next decade. According to one estimate, about half By 2027, new AI data centers may not have enough capacity.

The oil and gas company already operates power plants for its own operations, but the new project will be its first for foreign customers. The planned power plant will run on natural gas and produce more than 1.5 gigawatts of energy.

In a twist, Exxon said it intends to capture and store more than 90% of the carbon dioxide produced by the plant.

The company does not plan to connect the power plant to the grid, avoiding the interconnection problem that plagues many new power plants. Annually strategy document Published on Wednesday, Exxon described the new project as “reliable, fully islanded power independent of grid infrastructure”. Where the power plant will be located has not been reported. Exxon did not respond to a request for comment before publication.

The company should complete the facility within the next five years he said The New York Times. That’s a shorter period than most nuclear power plants, which have attracted the attention of energy-hungry tech firms. Most of them are not scheduled to be online until today early 2030s.

But Exxon faces stiffer competition from renewables, which are proving to be rapidly deployed and prices continue to drop. Google’s announced recently Investment in renewable energy, including partners, will total $20 billion to start sending electricity to the grid in 2026. Microsoft contributes to the $5 billion, 9 gigawatt renewable energy portfolio that has already made its first investment; the first solar project is scheduled to go online six to nine months from now on.

Complicating matters for Exxon is the addition of carbon capture and storage (CCS). significant expense to the construction and operation of a fossil fuel power plant. So far, there are only a few power plants in the world that capture a fraction of their carbon pollution. according to to the Global CCS Institute and none of them run on natural gas. That could change given tax credits available under the Inflationary Reduction Act, which offer $60 to $85 per metric ton of carbon captured and stored.

Still, there are some drawbacks to making the technology work on a commercial scale. There are some hit their targets and others are far short. A long-running CCS facility in Canada promised to capture 90% of the carbon dioxide from a small coal plant, but after nearly a decade of operation, it has captured just under 60%. according to to the Institute of Energy Economics and Financial Analysis.