Are consumers doomed to pay more for electricity due to data center buildouts?
Source: Ars Technica
Tech Companies Build Their Own Power Supplies
To avoid political backlash and long waits—up to four years—for grid connections, tech companies are already constructing their own power supplies for many new data centers.
Nearly three‑quarters of planned generation equipment for data centers is natural‑gas‑fired, according to energy‑research firm Cleanview, which is tracking 56 GW of projects across the United States.
A Wednesday pledge would see tech companies expand these efforts to prevent higher power costs from being pushed onto customer bills.
“Big Tech is trying to push back against the narrative that they’re the bad guy,” said Josh Price, director of energy and utilities at strategy firm Capstone.
Supply‑Chain Constraints
The boom in data‑center construction is straining the supply chain for power generation, making it difficult for companies to meet their commitments. Competition for gas turbines is fierce, with lead times as long as seven years for new orders.
- GE Vernova announced a 25 % expansion of turbine production.
- Mitsubishi Power plans to double its output over the next two years.
Despite these announcements, manufacturers remain cautious about expanding capacity, and the additional output may still fall short of booming demand.
Two‑thirds of gas projects in development in the U.S. have not yet announced a turbine manufacturer, according to Global Energy Monitor.
The price of gas turbines has risen sharply, and greater competition from tech companies will likely increase costs for utilities and industrial customers who also need generating capacity—costs that could ultimately be passed on to ratepayers.
Alternative Power Sources
To overcome shortages, data centers are increasingly turning to alternatives:
- Nuclear: Companies such as Google and Microsoft have struck deals to reopen nuclear power plants, though these plans will take years to materialize.
- Reciprocal engines and diesel generators: In the near term, firms are using these options, but experts warn they are not designed for the continuous power required by data centers.
“They say, ‘we have documented evidence that these can run 90 percent of the time’… But that’s not the average use case,” said Jigar Shah, an energy investor and former Department of Energy official.
Shah added that maintaining these data centers and their power supplies for decades would also pose challenges around securing spare parts and qualified technicians.
“The level of ineptitude by which the data‑center companies are sleepwalking into major problems just seems shocking for trillion‑dollar companies.” – Jigar Shah
Potential Impact on Consumers
If utilities and industrial customers face higher costs for generating capacity, those expenses could be transferred to ratepayers, potentially leading to higher electricity bills for consumers. The interplay between tech‑company‑driven power projects and the broader energy market will therefore be a key factor in determining future electricity pricing.
© 2026 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.