Material Insights · Understanding the Material World

Data centres and cloud and Natural gas

Gas is the largest single source of power for US data centres and the IEA expects it to supply the biggest share of their added demand to 2030, so the AI build-out has become a new source of US gas demand and a new buyer of scarce gas turbines.

Data centres and cloud (industry) and Natural gas (energy): 4 relationships.

How they are linked

1. Industry input

Physical flow · Strong · Natural gas → data centres and cloud

Data centres run around the clock and need firm power, and in the US gas-fired plants supply more of it than any other source; the site rates gas 5 of 5 on criticality for the utilities and power developers that serve them.

  • over 40% gas share of electricity used by US data centres, 2024
  • 26% gas share of data centre electricity worldwide, 2024
  • 5 of 5 site criticality for utilities and clean-power developers (gas-fired supply)

The link is strongest in the US. Worldwide coal is still the largest source, at about 30%, because China's data centres run mostly on coal, so the gas tie is regional rather than global.

Enterprise types that depend on it:

  • Utilities and clean-power developers: gas-fired supply (criticality 5 of 5)

Sources: Material Insights; IEA

2. New gas load

Transition · Rising · Data centre growth → US gas demand

Grid connections are slow, so many US developers are building or contracting gas plants, including on-site plants that bypass the grid, to bring AI campuses online.

  • over 130 TWh added yearly gas-fired generation for US data centres, 2024 to 2030 (IEA Base Case)
  • about 6.1 bcf/d RBC forecast of US data centre gas use by 2030
  • 2.1 to 4.1 bcf/d Enverus range for added Lower 48 gas demand from data centres by 2030

Forecasts differ widely: Enverus's upper figure assumes every new data centre is gas-fired, while its firmer figure counts only behind-the-meter projects with dedicated gas plants. The IEA notes that many on-site gas projects, largely in the US, are still at an early stage, so the demand is not yet certain. Worldwide, data centre electricity use rose 17% in 2025.

Sources: IEA; IEA; RBC Capital Markets; Enverus

3. Gas turbine supply

Shared risk · Strong · Turbine makers → gas-fired data centre power

A gas plant for a data centre needs turbines and transformers, and a few manufacturers supply them, so equipment queues as well as gas supply limit how fast gas-fired capacity can be added.

  • about 100 GW global gas turbine orders by end-2025 (RBC estimate)

The IEA reports that supply chains for gas turbines and transformers tightened over 2025 alongside those for advanced chips. Turbine scarcity raises the cost and delay of gas-fired projects and pushes some developers towards other sources.

Sources: IEA; RBC Capital Markets

4. Gas prices in power costs

Cost and price · Medium · Gas prices → data centre power costs

Five of the six largest US data centre states, Texas, Virginia, Georgia, Ohio and Arizona, are on grids where gas makes close to half of the electricity, so wholesale power prices there move with gas prices.

  • nearly half gas share of generation on the grids of five of the six largest US data centre states (Illinois is the exception), 2026

So far US Henry Hub prices have stayed contained despite the new load, which has kept gas the cheapest firm option. A sustained rise in gas prices would raise operating costs for data centres on these grids and strengthen the case for nuclear, storage and renewable contracts.

Sources: RBC Capital Markets

For investors

Key learnings

  1. In the US, data centre growth has become one of the main sources of new gas-fired power demand, with forecasts for 2030 ranging from about 2 bcf/d of added demand (Enverus) to about 6 bcf/d of total use (RBC).
  2. Equipment is a key bottleneck: gas turbine orders reached an estimated 100 GW by end-2025 and turbine and transformer supply chains tightened over 2025.
  3. Forecasts rest on assumptions about how many campuses go gas-fired, so announced on-site projects should be checked against actual turbine orders and gas contracts.

What to track

  • Henry Hub gas price: Operating cost of gas-fired data centre power and the edge of gas over other firm sources (Weekly · EIA)
  • Gas turbine orders and backlog: Pace at which gas capacity for data centres can actually be built (Quarterly · GE Vernova, Siemens Energy, Mitsubishi Power results)
  • US commercial electricity demand: Whether data centre load is arriving as forecast (Monthly · EIA Short-Term Energy Outlook)

For policymakers

Key learnings

  1. Where grid connections are slow, data centres turn to on-site gas plants, so connection rules shape the fuel mix of new load.
  2. Equipment supply, as much as fuel, limits how fast gas capacity can be added, so planners need turbine and transformer lead times in capacity plans.
  3. India's data centres drew about 0.5% of national power demand in 2024 and buy clean power mainly through open access, so keeping open access workable matters more there than gas supply.

What to track

  • Gas share of US data centre electricity: How far AI load is locking in gas-fired generation (Yearly · IEA Energy and AI updates)
  • India data centre capacity and green open access approvals: Whether new Indian load is met by renewables rather than fossil power (Yearly · Ministry of Electronics and IT, state nodal agencies, market reports)

India

India's data centre capacity reached almost 1.5 GW in 2025, according to the IT ministry; data centres drew about 0.5% of national power demand in 2024 and buy clean power mainly through green energy open access, so the gas link seen in the US is weak in India.

Sources

  1. Data centres and cloud: materials, Material Insights (2026)
  2. Energy and AI: energy supply for AI, IEA (2025)
  3. Data centre electricity use surged in 2025, even with tightening bottlenecks driving a scramble for solutions, IEA (2026)
  4. Natural gas powers the data center boom, RBC Capital Markets (2026)
  5. EIR forecasts modest impact on U.S. natural gas demand from data center expansion, Enverus (2025)
  6. India's data centre boom opens up a fresh segment for green developers, Saur Energy International (2024)
  7. India's DC capacity almost touched 1.5 GW in 2025: IT Ministry, W.Media (2026)