What's happened
Microsoft and Chevron have agreed to develop Project Kilby, a 2.67-gigawatt natural gas power plant in West Texas that will supply electricity to a Microsoft data center under a 20-year power purchase agreement. The plant, using GE Vernova turbines and Caterpillar Solar Turbines, will be among the largest co-located gas-power and data-center developments in the United States. Construction has not started yet, and a final investment decision is expected this year, with power delivery anticipated in 2028. The project likely increases emissions despite Microsoft’s carbon-free pledge.
What's behind the headline?
Brief
- Microsoft and Chevron plan a 2.67 GW gas-fired plant (Kilby) to power a Microsoft data center under a 20-year PPA.
- The project is among the largest co-located gas-power and data-center developments in the U.S.
- Emissions estimates suggest substantial CO2 and pollutant outputs, challenging Microsoft’s carbon-neutral aspirations.
Why this matters
- This move signals a pragmatic pivot: large-scale compute demand may outpace progress on carbon-free electricity, pushing cloud providers toward gas-fired resilience.
- If commissioned in 2028, Kilby will reshape Texas energy use and set a precedent for data-center energy sourcing.
Forecast
- The final investment decision is expected this year; construction timelines depend on regulatory and market conditions. Data capacity continues to grow as AI workloads expand.
- Emissions will rise in the near term unless offset by new reductions elsewhere or carbon capture initiatives.
How we got here
Microsoft has been expanding its data-center footprint and has historically prioritized renewable energy and nuclear solutions to offset emissions. Kilby marks a notable shift toward natural gas to meet growing demand for electricity at data centers. Reeves County, Texas, is the site under discussion, with Chevron partnering to supply the majority of the power through GE Vernova turbines, while Caterpillar will provide additional turbines.
Our analysis
TechCrunch reports a 2.67 GW plant in West Texas under a 20-year PPA, with GE Vernova and Solar Turbines involved; CNBC notes the project would serve the Kilby data center and is a major step for gas-powered data infrastructure. CNBC and TechCrunch provide complementary details on timelines, capacity, and potential emissions.
Go deeper
- What will Microsoft do to offset Kilby’s emissions beyond its 2030 carbon-neutral goal?
- When will final investment decisions and construction begin, and what regulatory approvals are required?
More on these topics
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GE Vernova - Company
GE Vernova, Inc. is an energy equipment manufacturing and services company headquartered in Cambridge, Massachusetts. The company operates through three main segments: Power, which designs, manufactures, and services gas, nuclear, hydro, and steam technol
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Caterpillar Inc. - Construction machinery and equipment company
Caterpillar Inc. is an American Fortune 100 corporation which designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance to customers via a worldwide dealer network.
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Microsoft - Technology company
Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.