[epistasis]

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. 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.

[bob1029]

West Texas is like Costco for natural gas.

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.

[epistasis]

And despite that, when there's any sort of price pressure, like there is for new electricity grid additions from investors, solar and batteries completely dominate the choice over natural gas in Texas.

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?

[ElevenLathe]

This is just a guess, but is the reason the same one that the gas is cheap all the way out in BFE west Texas? In other words, even if you could generate electricity from wellhead gas more cheaply than a bunch of wind turbines, solar panels, and batteries just west of Fort Worth, can you actually export it to east Texas where all the demand is? The solution here being: let's build our giant demand machine directly on the steppe and skip all that expensive infra, because data is much cheaper to move than energy.

[bob1029]

> data is much cheaper to move than energy

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.

[gnerd00]

West Texas is also a basket of methane leakage -- see CarbonMapper et al

[credit_guy]

But they are using wind:

> A majority of the generation will come from large GE Vernova (NYSE: GEV) turbines.

[alex43578]

Unless the article specifies wind, GE Vernova makes gas turbines too.

[dtagames]

Mostly it says that the oil business runs the show here in Texas, and in Washington.

[epistasis]

But I'm curious how oil could run the show for Microsoft though. Even if Microsoft wanted gas backup, they could add solar to the build, shut off the turbines during the day, and save money over an all gas setup.

Perhaps Microsoft had better ability to overturn local opposition to data centers if they had Chevron's political influence over the politicians too?

[dtagames]

What I meant was that all political and economic decisions here go in favor of oil. The war, the proposed laws to make Chinese EVs illegal, the softening of environmental regulations, etc.

Chevron and the US Government are joined at the hip, so these kind of deals "flow" naturally.

[rconti]

DC?

[softwaredoug]

While the US stays oil rich, we should expect the US to be a laggard in ending use of fossil fuels. China and EU are not oil rich, they’ll make a faster transition.

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.

[epistasis]

Well what I'm saying that is that on the Texas grid, solar and storage and wind are the cheapest energy, and being deployed in massive amounts because only on the Texas can an investor make money by providing the cheapest energy. (For most utilities, they take a fixed rate of profit and are incentivized to use the most expensive possible energy if they can get away with it.)

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?

[chasd00]

> But why would they go this direction?

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.

[tech_ken]

I can think of a few angles that might have pushed them towards gas, mainly (a) they wanted on-demand generation cap, (b) they didn't want to get into the batteries game at the volume they'd require, or (c) they didn't want to deal with securing the space needed to produce 2.6GW of solar. Also yeah they're definitely not price-sensitive, any of the hyperscalars is more than happy to pay extra to get exactly what they want.

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.