Data Centers Spark New Life in Gas-fired Generation

The Week That Was: February 7-14, 2025

NOTE: “The Week That Was” is a recap of ideas shared over the last seven days.

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What got my attention in 𝙏𝙝𝙚 𝙒𝙚𝙚𝙠 𝙏𝙝𝙖𝙩 𝙒𝙖𝙨?

• Chris Wright’s first Secretarial Order pivots the DOE’s priorities towards energy abundance, and I was left wondering how fast will the impact be felt (Can the DOE keep up with DOGE? | Chris Wright’s first Secretarial Order).

• Shell released their 2025 Energy Security Scenarios, including a new (and more positive in my opinion) “Surge” scenario considering “a new wave of economic growth spurred by productivity improvements catalyzed by AI” (Surge of Optimism in Shell's Scenario | The scenario explores the potential of AI to change the energy system).

• DeepSeek’s model advance has raised all sorts of questions about the future energy demand’s for AI, but many frame it as a datacenter tailwind. I wonder if this is a case of group think, or are we really in a golden moment where all news is good news for data centers and power demand?

• As AI, data centers and “gas-to-power” themes continue to dominate, we are seeing more related deals. Energy Transfer struck a 450 BBtu/d Deal with Cloudburst that left me wondering, “Can gas producers tap into the data center boom?” and get a premium on their gas?

• However, the is forecasting US power supplied by gas is set to DECLINE 3.7% and 0.8% in 2025 and 2026, all while financial buyers Blackstone, Quantum and Trafigura are accumulating gas-fired power assets. Why? Gas-fired generation is UNDERPAID (The reliability attribute is undervalued and likely the draw for financial buyers)

Expanded thoughts on each of these ideas are below.

𝗪𝗵𝗮𝘁 𝘄𝗲𝗿𝗲 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝘀𝘁𝗼𝗿𝗶𝗲𝘀, 𝗶𝗱𝗲𝗮𝘀 𝗮𝗻𝗱 𝗯𝗲𝘀𝘁 𝗰𝗼𝗻𝘁𝗲𝗻𝘁 𝘆𝗼𝘂 𝘀𝗮𝘄 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸? Please share in the comments for all of us!

Have a great week!

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