Microsoft buys 20 years of gas power in a state drowning in cheap solar
Chevron will run seven US-made gas turbines in West Texas to power a Microsoft data center, in a grid where almost every new megawatt is wind, solar, or storage.
The plant sits where natural gas prices at the WaHa hub have gone negative, as low as -$9 per MCF, because there's nowhere to send it. Microsoft pledged to be carbon-negative by 2030, and just signed a two-decade contract to burn stranded fossil fuel at the wellhead instead.
A 2.67 GW gas plant next to a state full of cheap renewables
Chevron has signed a 20-year power agreement with Microsoft for a West Texas data center. Per the press release, "a majority of the generation [is] from large GE Vernova (NYSE: GEV) turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar Inc." Commenters identify seven US-made GE Vernova 7HA natural-gas turbines, around 2.67 GW of new build at roughly $6–8B in fixed cost. The wager is pointed: gas, in a state where new solar and wind are cheaper, against Microsoft's 2030 carbon-negative pledge.
The Chevron newsroom announcement is light on the why. The thread supplied it.
Burning stranded gas while Microsoft holds the leverage
One reader with turbine knowledge insisted this is the real thing, not a parking-lot stopgap.
"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… seven U.S.-made GE Vernova… 7HA natural gas turbines." — a commenter who IDs the turbine class
The economics, another argued, point one way.
"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. … 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." — a commenter who supplied the recovery math
The siting logic explains the fuel choice.
"West Texas is like Costco for natural gas. … 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." — a commenter on stranded-gas economics
And still it cut against the grain of the grid.
"Fascinating they're going this direction when solar and batteries are so cheap in Texas… Nearly all new additions to the grid are solar, wind, and storage right now on Texas' grid… Especially with the shortage in gas turbine manufacturing, very surprising!" — a commenter citing the ERCOT build mix
Read together, the deal is less about clean power than about cheap, 24/7 power Microsoft can lock down for two decades, even if that means soaking up gas the region can't otherwise sell.
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