Microsoft and Chevron plan one of the largest gas-powered data center projects in US

Microsoft inked a 20-year power purchase agreement with Chevron, locking in decades of carbon emissions from a new natural gas power plant.

Microsoft and Chevron announced plans on Monday to develop a 2.67-gigawatt natural gas power plant in West Texas to serve the tech company’s AI and cloud data centers. Under the 20-year power purchase agreement, the plant will provide dedicated electricity to a Microsoft-operated data center.

Two large GE Vernova turbines will generate most of the power, with a Caterpillar subsidiary Solar Turbines providing the rest. (The Solar Turbines name might sound familiar - xAI uses them in its unpermitted power plant near Memphis.)

Microsoft will buy power from the power plant for 20 years. The project will be “among the largest co-located natural gas power and data center developments in the U.S.,” Chevron said in a press release.

A significant shift for Microsoft

Though Microsoft has been telegraphing the move for months now, it’s still a significant shift for a company that has been vocal about its sustainability efforts. Microsoft has pledged to eliminate its carbon emissions by 2030, a goal that will be harder to reach with this new power plant.

Environmental impact

Project Kilby, as the power plant is known, will potentially release more than 13 million tons of carbon dioxide, 3,200 tons of criteria air pollutants, and 278,000 pounds of hazardous air pollutants, according to the Environmental Integrity Project.