Chevron and Microsoft signed a 20-year power purchase agreement for a dedicated 2.67-gigawatt natural gas-fired power plant. Located in West Texas, Project Kilby will supply electricity directly to a new Microsoft hyperscale data center. The facility will operate off-grid to bypass lengthy interconnection queues.
This partnership addresses the tech sector's need for reliable energy during the AI boom. The project highlights the challenge of balancing decarbonization with the constant power demands of digital infrastructure. Intermittent renewables currently struggle to meet these needs without significant battery storage.
A final investment decision is expected by the end of 2026. The plant is scheduled to be operational by 2028. The deal allows traditional energy providers to diversify revenue by meeting rising tech sector electricity consumption.