Chevron, GE Vernova, Engine No.1 Join Race to Co-Locate Natural Gas Plants for U.S. Data Centers

Chevron Corporation has announced a strategic partnership with Engine No. 1 and GE Vernova to develop natural gas-powered plants dedicated to supplying energy to data centers across the United States.

Engine No. 1 is an investment firm focused on driving long-term value creation through active ownership, particularly by advocating for sustainable business practices and corporate governance reforms. The firm gained prominence by successfully pushing ExxonMobil to adopt more environmentally conscious strategies.

For its part, GE Vernova, a division of General Electric, is dedicated to deploying innovative energy solutions, encompassing power generation, grid infrastructure, and renewable energy technologies. The connection between these two companies lies in their shared emphasis on the energy transition—Engine No. 1 has invested in and influenced companies within the energy sector, while GE Vernova plays a direct role in advancing cleaner energy solutions.

As announced on Jan. 28, the new tri-partnership initiative with Chevron aims to address the escalating energy demands driven by advancements in artificial intelligence (AI) and data processing. Analysts have estimated the total value of the joint investment at $8 billion.

Chevron's Diversification Play

Chevron is a global leader in the oil and gas industry, engaged in various sectors including exploration, production, refining, and marketing of petroleum products.

In recent years, the company has been diversifying its portfolio to include alternative energy solutions, reflecting a commitment to meeting evolving energy needs.

In 1999, it created Chevron's Future Energy Fund, managed by Chevron Technology Ventures (CTV), which has made several strategic investments in companies focusing on lower-carbon technologies.

With almost 30 investments to date, CTV is looking at a broad range of technologies, from carbon-capture to fusion reactors to help the company meet zero carbon emissions goals.

Some of the investments include:

Zap Energy: A Seattle-based startup developing advanced nuclear fusion technology aimed at creating a compact, scalable fusion reactor.
TAE Technologies: A company focused on developing commercial fusion power with an emphasis on advanced beam-driven field-reversed configuration technology.
Carbon Clean Solutions Limited: Specializes in low-cost carbon dioxide separation technology for industrial applications, aiming to reduce CO₂ emissions.
Carbon Engineering: A Canadian-based company working on direct air capture technology to remove CO₂ from the atmosphere and synthesize it into clean fuels.
ChargePoint: Operates a vast electric vehicle charging network, providing solutions across various sectors to support the growing EV market.
Infinitum Electric: A Texas-based company re-engineering traditional motor technology to decrease carbon footprints and improve performance across multiple industries.
Natron Energy: Develops new battery products for mission-critical stationary applications, offering solutions with rapid charging capabilities and long cycle life.
Spear Power Systems: Provides advanced energy storage solutions for maritime, aerospace, and industrial applications, focusing on high-performance and reliable systems.
Svante: Developing carbon capture technology capable of capturing CO₂ directly from industrial sources at a reduced capital cost, facilitating commercial-scale carbon capture.
Vutility: Offers real-time, high-resolution energy monitoring solutions, enabling businesses to optimize energy consumption and improve operational efficiencies.

Partnership Notes

On Chevron’s role in the newly announced partnership with Engine No. 1 and GE Vernova, Mike Wirth, Chief Executive Officer and Chairman, Chevron Corporation, said:

We are proud to play our part in bringing to fruition President Trump’s vision for a new American golden age, powered by our enormous energy resources and unrivaled workforce. President Trump’s pro-American energy policies and commitment to energy and AI dominance give us the confidence to invest in projects that will create American jobs and strengthen our national security.

Founded in 2020, Engine No. 1 is an investment firm known for its activist approach toward environmental, social, and governance (ESG) issues. As mentioned above, the firm gained prominence in 2021 by challenging ExxonMobil's board, advocating for a transition towards more sustainable energy practices.

In the partnership, Engine No. 1 brings its investment expertise and focus on sustainable value creation. In the venture with Chevron and GE Vernova, they will be using their expertise to focus on fast-tracking the development of natural gas power plants to focus on the energy demands of AI data centers.

Chris James, Engine No. 1’s Founder and Chief Investment Officer, said:

Energy is the key to America’s AI dominance. By using abundant domestic natural gas to generate electricity directly connected to data centers, we can secure AI leadership, drive productivity gains across our economy and restore America’s standing as an industrial superpower. This partnership with Chevron and GE Vernova addresses the biggest energy challenge we face.

GE Vernova is the energy division of General Electric, specializing in a wide array of energy solutions, including power generation technologies and services. The company offers advanced natural gas turbines and is actively involved in developing sustainable energy technologies.

In this collaboration, GE Vernova will supply its state-of-the-art 7HA natural gas turbines, known for their efficiency and reliability. The initial buildout is expected to leverage seven of the GE turbines, in the projects the companies refer to as “power foundries” across the US.

Chevron and GE Vernova's leader expressed confidence that the availability of natural gas and the fast-tracked construction could have the first facilities in place in two years or so. Scott Strazik, Chief Executive Officer for GE Vernova, remarked:

We are excited to enable the advancement of data center growth in the U.S. by supporting delivery of critical power needs to customers using innovative solutions. GE Vernova is uniquely positioned to provide the energy systems and support required to make this large-scale endeavor possible, as the leading U.S. energy manufacturer.

4 GW of Behind the Meter Natural Gas-Data Center Plant Adjacency Planned Across U.S.

The collaboration between Chevron, Engine No. 1, and GE Vernova focuses on constructing natural gas-fired power plants co-located with data centers in the Southeast, Midwest, and Western regions of the United States.

By situating power generation facilities adjacent to data centers, the partnership aims to enhance energy efficiency and reduce transmission losses.

Meanwhile, there are no current plans to use the power grid for energy transmission, making these co-located power plants effectively “behind the meter” investments with a goal of having no impact on consumer electricity prices.

The project's initial phase plans to deliver up to 4 GW of power, with operations expected to commence by the end of 2027.

AI and Sustainability

The collaboration between Chevron, Engine No. 1, and GE Vernova represents a significant investment in the infrastructure necessary to support the burgeoning AI industry, aligning with broader efforts to enhance energy efficiency and sustainability.

By leveraging abundant domestic natural gas, the partnership aims to provide reliable and scalable power solutions to meet the growing energy demands of AI-driven data centers, thereby supporting the advancement of AI technologies within the United States.

Meanwhile, with an eye toward sustainability, the initiative is designed with the flexibility to integrate lower-carbon solutions, such as carbon capture and storage (CCS), capable of capturing over 90% of CO₂ emissions from the turbines, and the incorporation of renewable energy resources.

Other Recent Natural Gas Developments for Data Centers

As of February 2025, the data center industry has seen a host of significant developments in natural gas plant technologies and strategic partnerships aimed at meeting the escalating energy demands driven by AI and cloud computing.

In addition to the partnership between Chevron, Engine No. 1, and GE Vernova, other consequential initiatives include the following:

ExxonMobil's Entry into the Electricity Market

ExxonMobil has announced plans to build natural gas-fired power plants to supply electricity to AI data centers. The company intends to leverage carbon capture and storage technology to minimize emissions, positioning its natural gas solutions as competitive alternatives to nuclear power. This announcement in particular seemed to herald a notable shift in industry as fossil fuel companies venture into the electricity market to meet the rising demand for low-carbon power.

Powerconnex Inc.'s Natural Gas Plant in Ohio

An Ohio data center in New Albany, developed by Powerconnex Inc., plans to construct a natural gas-fired power plant on-site to meet its electricity needs amidst the AI industry's increasing energy demands. The New Albany Energy Center is expected to generate up to 120 megawatts (MW) of electricity, with construction beginning in Q4 2025 and operations commencing by Q1 2026.

Crusoe and Kalina Distributed Power Partnership in Alberta, Canada

AI data center developer Crusoe has entered into a multi-year framework agreement with Kalina Distributed Power to develop multiple co-located AI data centers powered by natural gas power plants in Alberta, Canada. Crusoe will own and operate the data centers, purchasing power from three Kalina-owned 170 MW gas-fired power plants through 15-year Power Purchase Agreements (PPAs).

Entergy's Natural Gas Power Plants for Data Centers

Entergy plans to deploy three new natural gas power plants, providing over 2,200 MW of energy over 15 years, pending approval by the Louisiana Public Service Commission. This initiative includes a partnership with Meta to power a new $10 billion AI data center in northeast Louisiana.

Oracle's Project Stargate in Texas

Oracle, in collaboration with OpenAI, SoftBank, and investment firm MGX, has announced the Stargate Project—a joint venture committing up to $500 billion into AI infrastructure over the next four years. The project includes plans for substantial natural gas turbine plants to power the data centers, with an initial commitment of $100 billion.

Naturgy's Expansion of Renewable Gas Injection Capacity

In Spain and Portugal, Naturgy, through its distributor Nedgia, has increased its capacity for injecting renewable gas by over 30% in the past year. Currently, eight biogas plants are operational, producing 226 GWh of green gas annually. Plans are underway to add 53 additional plants, expected to generate 3,365 GWh, equivalent to the consumption of over 673,000 households. This expansion positions Naturgy and Nedgia as leaders in the production and distribution of green gases in the Iberian Peninsula.

EDF's Identification of Sites for Data Centers in France

France's state-owned utility company, GE Vernova client EDF, has identified four sites on its land suitable for data centers, totaling an estimated 2 GW of available power through existing grid connections. This initiative aims to accelerate investments in data center infrastructure, promoting EDF's energy as both reliable and clean for data centers. The company is also searching for two additional sites to support data center development.

EnBW's Advocacy for New German Power Plant Development

Georg Stamatelopoulos, CEO of EnBW, has urged the forthcoming German government to expedite a pending project for developing new gas-fired power generation capacity. The proposal seeks the construction and modernization of 12.5 GW of gas power plants to ensure system stability as the country transitions to 80% renewable energy sources by 2030.

Total Planned Capacity

Let's summarize the planned capacities from the developments above:

Chevron, Engine No. 1, and GE Vernova Partnership: 4 GW
Exxon Mobil's Natural Gas Plants: Capacity not specified
Powerconnex Inc.'s Ohio Plant: 0.12 GW
Crusoe and Kalina Partnership: 0.51 GW (three 170 MW plants)
Entergy's Natural Gas Plants: 2.2 GW
Oracle's Project Stargate: Capacity not specified
Naturgy's Renewable Gas Expansion: 3.365 GW
EDF's Identified Sites: 2 GW
EnBW's Proposed German Plants: 12.5 GW

Excluding projects where specific capacities are not detailed, the total planned capacity for data centers through these natural gas developments alone amounts to approximately 24.695 GW.

And the concerted effort within the data center industry to rapidly secure reliable and scalable power solutions by leveraging natural gas and other innovative technologies to meet the skyrocketing energy demands of AI and cloud computing is arguably only just beginning.

At Data Center Frontier, we not only talk the industry talk, we walk the industry walk. In that spirit, DCF Staff members may occasionally employ AI tools to assist with editorial content. This article was created with help from Open AI's GPT-4.

Keep pace with the fast-moving world of data centers and cloud computing by connecting with Data Center Frontier on LinkedIn, following us on X/Twitter and Facebook, and signing up for our weekly newsletters using the form below.