Rystad: Explosive Data Center Growth Drives Natural Gas Surge

Power demand from new data center installations in the United States is expected to grow by 1,000 percent from the end of 2024 through 2035, according to a new study released at the end of February by Norwegian research firm Rystad Energy. Natural gas power plant expansion is projected to become the largest source powering the data center growth, most of which is driven by rapid advancements in AI technology and growth in cloud computing services.

“The US power sector is entering a critical growth phase. Meeting the demands of data centers while balancing investments in natural gas and renewables will shape the industry’s path forward. Without targeted action, rising costs and energy shortages could pose significant challenges for both consumers and industry,” the company said in a release.

Natural Gas Advantages Over Nuclear, Geothermal

Rystad’s findings are consistent with a story I wrote here last October, based on articles by both Bloomberg and the Wall Street Journal, along with remarks delivered by BP CEO Murray Auchincloss to investors the last week of that month.

“Hyperscalers are driving crazy demand into natural gas right now,” Auchincloss said during that investor call, adding, “I’m pretty optimistic on natural gas prices through the decade.”

The story referenced in the Wall Street Journal focuses on the fact that some of the tech firms looking to secure their power needs had a preference for either nuclear and geothermal power, mainly due to their low emissions footprints. But the ability to source geothermal remains largely experimental and is dependent on where the demand center is located.