Editor’s Note: This is an updated version of an article published January 28.
GE Vernova, Chevron and Engine No. 1 are forming to build a new company aimed at delivering up to four gigawatts (GW) of reliable power for U.S. data centers.
The first projects, branded as “power foundries,” are expected to leverage seven GE Vernova 7HA natural gas-fired turbines, secured under a slot reservation agreement, on an accelerated timeline. The turbines are expected to serve co-located data centers in the U.S. Southeast, Midwest and West regions. The first projects have targeted operation dates by the end of 2027.
The partnership forms as energy demand for AI development and data processing continues to skyrocket. The companies cited early actions of the Trump Administration “setting the critical foundation to encourage investment leveraging America’s energy abundance to enable America’s AI leadership.”
The projects are not designed to initially flow through the existing transmission grid. Over time, surplus electricity from the projects could be sold back to the grid through future interconnects, providing additional capacity to the broader energy market without driving up costs for consumers.
“By directly connecting natural gas-powered plants to data centers, the initiative avoids putting additional pressure on the grid while enabling the U.S. to maintain its leadership in AI innovation,” the companies said in a statement.
The projects are expected to be designed with the flexibility to integrate solutions like carbon capture and storage (CCS) and renewable energy resources.
Data centers, while not the only reason for load growth in the U.S., are the largest driver. Data centers by 2030 could require 8-12% of the total U.S. demand, based on various estimates.
As new data center projects struggle to get timely access to power, data center leaders are seeing value differently. Time to power is playing an increasingly important role in this equation.
Collocating power plants and data centers is one solution to bypass the often-lengthy interconnection process. Looking for a quick fix, tech giants and AI companies are increasingly looking to strike deals with power plant owners to plug in directly.
The most prominent example is the data center that Amazon Web Services is building next to the Susquehanna nuclear plant in eastern Pennsylvania.
The arrangement between the plant’s owners and AWS is the first such to come before the Federal Energy Regulatory Commission (FERC). For now, FERC has rejected a deal that could eventually send 960 megawatts (MW) — about 40% of the plant’s capacity — to the data center.
While nuclear is a favorite of data center developers, natural gas may get most of the business – at least for the time being.
Onsite turbines, reciprocating engines and fuel cells will increasingly power data centers, according to a recent survey by Bloom Energy. In November, data center leaders told the company they expected approximately 30% of all data center sites to use some onsite power as a primary energy source supplemental to the grid by 2030, 2.3 times more than just seven months earlier.
The report noted there were more data center announcements featuring onsite power in 2024 than the previous four years combined.
Increased investment from GE Vernova
As for GE Vernova, its gas turbine orders have picked up in response to rising electricity demand.
For the nine months that ended September 30, 2024, the company had 14.1 GW in gas turbine orders, compared with 7.4 GW for the same period in 2023.
“We foresee gas power generation continuing to grow low single digits, which will play an indispensable role in ensuring grid stability and energy security,” the company said in a quarterly report last Fall.
GE Vernova has a plan to deliver up to 80 heavy duty gas turbines per year, resulting in an additional 20GW of electricity worldwide. The company said it intends to invest almost $300 million in support of its Gas Power business.
In Greenville, South Carolina, the company plans to invest more than $160 million to support capacity growth, quality, industrialization and delivery efforts, along with new testing capability with hydrogen fuel. In Schenectady, GE Vernova previously announced it would hire more than 100 people in 2025, investing over $50 million.
The company is also planning to invest nearly $50 million combined in its Parsippany, New Jersey, and Bangor, Maine locations.
Outside of its gas power business, GE Vernova’s nuclear business, GE Hitachi, plans to invest more than $50 million at its Wilmington, North Carolina factory. The company is working to launch its-next generation nuclear fuel design, a critical component to the company’s small modular reactor, the BWRX-300.
This $50 million investment also seeks to expand automation at the plant, which has been manufacturing fuel since 1968 and serves much of the company’s U.S. boiling water reactor fleet. GE Vernova said this will strongly positioning it for the future, particularly as the demand for nuclear energy increases and as several U.S. utilities restart retired plants.
GE Vernova further plans to invest nearly $100 million at its Advanced Research Center in Niskayuna, New York. This investment aims to bolster the center’s electrification and decarbonization initiatives, attract top-tier talent and drive advancements in cutting-edge technologies such as direct air capture (DAC), alternative fuels for power generation, the future grid, critical infrastructure security and more.
