Why Tech Giants Are Ditching the Power Grid

It is the industrial version of what homeowners might do to get through a hurricane. Only in this case, some technology companies are planning to rely on off-grid gas power for many years.

This is happening as electricity is becoming a major political issue, with fights breaking out over how much energy costs, where it comes from and who ought to pay for what. Data centers, which consume huge amounts of energy, are at the center of these debates.

Going off grid was no one’s first choice. Off-grid power generally costs a lot more, partly because developers need to install more equipment than will be used at any one time in case machines break or need servicing. A lot of this gear is also less efficient than the airplane-size machines used at big power plants, meaning it needs to burn more gas to generate the same amount of electricity.

But in some states, it might take years to get permission to plug new power plants into the grid.

By the end of 2025, an estimated 39 percent of the gas power capacity being developed in the United States was designed to serve data centers on-site, according to the Global Energy Monitor, a nonprofit organization that tracks energy projects. That is up from 5 percent at the end of 2024.

“Necessity is the mother of invention,” said Joe Kava, a consultant who previously led global data center development for Google. “The hyperscalers are not going to be curtailed because they can’t get power,” he said, using a term that refers to large tech companies.

Power plants have bloomed in New Albany, Ohio, near Columbus, as if overnight. It was little more than a year ago that Sloan Spalding, the mayor, learned that a data center developer wanted to build the town’s first gas-fired power plant. Now, three are under construction, all meant to exclusively power data centers, and at least one other is planned.

“Frankly, we were all a little surprised,” Mr. Spalding said.

Together, the plants that are already under construction are expected to rely on about 61 engines, 30 small turbines and 16 other generators, regulatory filings show. All of that equipment burns natural gas to generate electricity, but each operates differently. That does not include battery storage systems to manage demand fluctuations and diesel generators for backup power in emergencies.

It is the kind of equipment you might expect in remote oil fields. Were they connected to the grid, the machines being installed in New Albany could potentially power around 600,000 homes. Another power plant that was proposed last week would be big enough to provide electricity for an additional 200,000 homes or more if regulators approve it.

“For better or for worse, we are the pioneers in this process,” Mr. Spalding said. “There’s not a lot we can do to stop it.”

Tech giants generally say they don’t want to build or operate power plants. In some places, the companies are fighting efforts to require data centers to rely on their own power sources or reduce energy consumption when electricity systems are under strain.

But the tech industry’s appetite for energy has become almost insatiable because of artificial intelligence, and there are only so many places where companies can draw large amounts of power from the grid quickly. Wait times vary by region, but it now takes an average of four years or more for data centers to connect to U.S. grids, according to JLL, a real estate services firm.

One of the first companies to go it alone was Elon Musk’s xAI, which opened a data center in Memphis in 2024, powering it with more than a dozen gas turbines rolled in on flatbed trucks. The Southern Environmental Law Center later claimed the company flouted permitting requirements and violated the federal Clean Air Act in Memphis and at another location in Southaven, Miss. xAI, which eventually received permits for some turbines in Memphis and stopped using others, did not respond to requests for comment.