There is no free gas pipeline capacity to get gas out of West Texas. Any time new pipelines are built, they are filled within months.
This makes a ton of sense for oil producers (which are also gas producers) who can sell their gas for less of a loss (potentially a profit!) and also for MSFT who can lock in long term contracts for minimal cost. I'd guess these contracts are for $1-2/MCF which is win/win for the oil companies in the area and MSFT.
Further, there's a gas turbine shortage so Microsoft choosing to put their (presumably limited) allocation of gas turbines in West Texas, where they have good alternatives, seems a bit mysterious. Why not save that massive amount of turbines for the northeast DCs, where renewables work far poorer yet gas is more reliable?
The reasons that seem most convincing to me:
1. Political environment is hostile to renewables and Microsoft doesn't want to paint a target on their back by choosing solar plus batteries, the choice others are making in West Texas.
2. Grid connection drastically changes economics, but pipelines for gas are cheap or something, so the massive cost and delay from grid interconnection simply isn't worth it
3. There are particular political favors going on with Chevron, e.g. Chevron wants gas in the area and is willing to increase MS's turbine allocation if they do it in west Texas, or Chevron is helping get around pesky local political approvals for data centers, or something like that.
The cost of gas does not seem like a justification for this, though.
In short, you're going to have to build your own power plant anyway, so why bother with the grid? Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Unless you're dealing with nuclear, the fuel cost just doesn't matter compared to the rest of the buildout, and gas wins because you can take off-the-shelf turbines and bolt them down.
You can only get away with it in places that don't care about environmental regulations, which are the places most likely to approve new buildout of gas infrastructure anyway. Nobody in the northeast is going to approve the creation of a brand new carcinogen factory.
Is it, though? There's a ton of projects out there waiting to get their solar on the grid in west Texas, partnering with one of them and launching the project early while waiting on the interconnection queue, and adding enough batteries, gives a more robust solution right now without the SPOF nature of large single generators.
Add to that the long backorder list for gas turbines right now, with no end in sight, and I'm surprised that Microsoft would power this particular location with turbines because it's probably their best chance to do off-grid massive solar projects.
Massive off-grid solar is what China is choosing for some absolutely massive new industrial projects. Nuclear is a no-go because it takes so long to deploy, but solar + batteries are cheap COTS and available in abundance, unlike gas turbines.
gas turbines run at night too so there's no storage/backup supply issue to consider. They also take up significantly less space than wind or solar and those data centers are already gigantic.
Yes.
There is no point in waiting for interconnection when you can just... not do that, and do all your generation behind the meter, with complete control of the generation to match your load. Solar wants an interconnect so they can sell off surplus; with gas you just turn the dial down to meet the load and walk away.
The clock is running on the datacenter goldrush. 70-90% of the capex window is going to be soaked up just with construction time. Introducing a capricious ERCOT permit process and shopping around for friendly solar projects to hop in bed with makes no sense when you can just write a check and solve the problem forever.
I'd bet the deal with Chevron was to enable Microsoft to hop the queue here and get those GEV turbines soonest.
Data centers would ideally run at ~100% utilization, so any drop in solar output needs to be fully met by batteries.
I don't think this is broadly accepted among major data center operators.
Cheap gas is great, but 2.67GW of new build natural gas in this market will cost $6-8 billion in fixed costs. You need wholesale pricing of ~$50-60/MWh ... OVER 25 years! ... to recover just the fixed costs.
For West Texas, prices averaged mid-$30s over the last year.
Microsoft has all of the leverage here, and Chevron wants a big announcement in an area where they don't have a lot of experience.
Nearly all new additions to the grid are solar, wind, and storage right now on Texas' grid. Not because of Texas regulations, but because Texas' grid is one of the few grids where generation decisions are all made by independent investors trying to make money.
Especially with the shortage in gas turbine manufacturing, very surprising! Not sure if this says more about Microsoft or datacenters.
There are cases where the fields can produce more than the pipelines can carry away. If you put your gigantic gas turbines right next to the fields you can obtain access to some extremely cheap fuel. They might even pay you to burn it sometimes. Negative gas prices are a thing.
Look at the map for 2026 of the grid buildout in Texas at the bottom of this page:
https://www.eia.gov/todayinenergy/detail.php?id=67205
All solar and batteries (yellow and black), with a few tiny blue dots for gas. It was the same story in 2025. And it will be the same story in 2027 because solar and batteries are getting even cheaper.
These are all decisions from private investors, trying to make money, and choosing solar and batteries over gas in the market where gas is the cheapest in the world, gas is like a waste product that's hard to get rid of.
Why would Microsoft choose dirty energy when all the profit-driven investors are choosing cheaper solar and storage?
It's something like 5-10 orders of magnitude cheaper to move information over fiber than it is to move the energy required to produce that same information through a [pipe/power]line.
> A majority of the generation will come from large GE Vernova (NYSE: GEV) turbines.
Of course it’s idiotic to actively hobble clean energy. Or to put your finger on the scale for one source of energy, like the current administration does.
But it’s not crazy to argue for “energy abundance” where the market just picks the cheapest energy on the market in the US and that just gradually moves cleaner over time.
So Texas is not a laggard when it comes to clean energy, they are actually driving clean energy forward the most, because clean energy is the cheapest and most profitable energy. And that's despite Texas having natural gas that's insanely cheap right from Henry Hub.
What this tells me is that like most hyperscalers, Microsoft is not price sensitive on the electricity side, because energy costs are tiny compared to the massive capital costs of the GPUs. But why would they go this direction? What political influence would make Microsoft choose more expensive electricity, when in the past they've been fairly good at driving clean energy forward in their data center power choices, and they'd pay a premium on energy costs to go with clean energy?
edit: for example that EIA list of new solar projects you linked indicates that the largest battery installations going up in '26 are all ~500MW, and that there are only four of them (of that size). I think the energy intensity of a multi-GW datacenter is the main reason that they're not going for solar here.
sibling comment has it, they want to do power generation on site and not connected to the grid and all the PITA that come with that. Further, they can pitch power independence to the locals which removes a big argument from the anti-datacenter crowd. Finally, the power gen i saw at Stargate in Abilene TX which was maybe 10 units (if that's what they're called) took up maybe 30 acres of land so they're not very big compared to the rest of the campus.
Perhaps Microsoft had better ability to overturn local opposition to data centers if they had Chevron's political influence over the politicians too?
Chevron and the US Government are joined at the hip, so these kind of deals "flow" naturally.
[1] https://www.microsoft.com/en-us/corporate-responsibility/sus...
Powering the future through innovative, sustainable energy solutions.
Solar Turbines Incorporated, headquartered in San Diego, California, is a wholly owned subsidiary of Caterpillar Inc. Solar manufactures the world’s most widely used family of mid-sized industrial gas turbines, ranging from 1 to 39 megawatts. More than 17,000 Solar units are installed in more than 100 countries with more than 3 billion operating hours. Solar is a leading provider of energy solutions, featuring an extensive line of gas turbine-powered compressor sets, mechanical drive packages, and generator sets.
When they say "large GE Verona", they mean the 7HA. This is an actual power plant with proper emissions controls. Not the aeroderivatives in parking lots we've seen so far.
> Their plan includes the use of seven U.S.-made GE Vernova Inc. GEV 7HA natural gas turbines to deliver the plant's initial capacity.
https://finance.yahoo.com/sectors/energy/articles/chevron-mi...
Why not use all that wasted heat energy to power all these datacenters?
(and why not build the datacenters at the Bakken formation)
You can see the burnoff from SPACE and it's for months at a time at each location, tell me that does nothing to global temperatures?
(look at the date on these photos, two decades of burnoff wasted energy)
* https://www.cnbc.com/2013/01/28/shale-gas-boom-now-visible-f...
* https://www.smithsonianmag.com/smart-news/at-night-giant-fie...
https://pv-magazine-usa.com/2026/02/09/totalenergies-signs-1...
Also Google and itself. I guess there's a difference between Google and Microsoft after all.
https://storage.googleapis.com/gweb-uniblog-publish-prod/doc...
Solar turbines is an interesting name for a gas turbine company. "It's green energy, we put solar in our name"
Its origin is traced back to a 1929 company, Solar Aircraft Company.
Confusing as it may be for people like yourself, I don’t think it really defends posting sarcasm that is not based in reality.
Basically most projects start with the wind company using its own money to find a site and get it approved and then they go and try to find someone to sell the electricity to at a fixed rate before construction begins as selling directly to the spot market has way too much risk for the banks to give loans.
Not sure how different it is in Central Europe with solar as there isn’t much solar up here in the north (just doesn’t make much sense as during the 3 to 4 months in the winter when electricity price is at the yearly maximum you produce effectively nothing)
Many investments won't pay off unless there is a 30 year plan so lots of investors work on that long term. Even if an investment pays off sooner you often are accounting better off longer terms - see an accountant