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Chevron signs 20-year power agreement with Microsoft for West Texas data center
31–40 of 169 posts
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#32Sorry, but who in his right mind, signs contracts for 20 years - could you have imagined the world today 20 years ago? No and no. All one should do is sign snippet contracts of 5 years with the offer of an option to predefined condition. Split it into 4 sequences with a renewal.
Very normal. Here in Europe (well nordics at least) pretty much all the capacity of any wind farm is already sold before construction begins. The PPA (power purchasing agreement) is usually pretty much required to get the loan/funding anyway.
Basically most projects start with the wind company using its own money to find a site and get it approved and then they go and try to find someone to sell the electricity to at a fixed rate before construction begins as selling directly to the spot market has way too much risk for the banks to give loans.
Not sure how different it is in Central Europe with solar as there isn’t much solar up here in the north (just doesn’t make much sense as during the 3 to 4 months in the winter when electricity price is at the yearly maximum you produce effectively nothing)
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#33The current natural gas price in West Texas (the WaHa hub, north of Coyanosa, TX) is negative. And has been for a while. The price peaked (dipped?) to -$9/MCF a couple months ago. That means gas producers had to pay $9 per MCF for it to be taken away. Oil in the Permian comes with gas, a lot of it, so to produce oil, you need to get rid of gas. Wells I'm familiar with have 4000-5000 cubic feet of gas per barrel of oi…
This might make sense for oil producers to get rid of their natural gas, which is nearly a waste material, but I'm struggling to understand how it makes sense for Microsoft. Despite the cheap natural gas, and an abundance of investors and builders with natural gas expertise, in the competitive electricity generation market everybody is deploying solar and batteries in west Texas because it's still more profitable than gas generation.
Further, there's a gas turbine shortage so Microsoft choosing to put their (presumably limited) allocation of gas turbines in West Texas, where they have good alternatives, seems a bit mysterious. Why not save that massive amount of turbines for the northeast DCs, where renewables work far poorer yet gas is more reliable?
The reasons that seem most convincing to me:
1. Political environment is hostile to renewables and Microsoft doesn't want to paint a target on their back by choosing solar plus batteries, the choice others are making in West Texas.
2. Grid connection drastically changes economics, but pipelines for gas are cheap or something, so the massive cost and delay from grid interconnection simply isn't worth it
3. There are particular political favors going on with Chevron, e.g. Chevron wants gas in the area and is willing to increase MS's turbine allocation if they do it in west Texas, or Chevron is helping get around pesky local political approvals for data centers, or something like that.
The cost of gas does not seem like a justification for this, though.
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#34Microsoft says [1] they're going to be carbon negative by 2030. Hard to see them doing that while deploying gigawatts of new fossil fuels. [1] https://www.microsoft.com/en-us/corporate-responsibility/sus...
it's easy ... they'll just change the definition of "carbon negative"!
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#35And in the mean time, western europe is having its second heat wave even before summer starts.
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#36[flagged]
Newsom aside, the idea is to change from oil to non-oil, efficient from mono-industrial.. The US Oil minions claim to be blind to this and cite quarterly profits, again
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#37With all the fracking in the USA, literally exponential growth, one of the things they do is gas burn off for months, sometimes years at all the sites
Why not use all that wasted heat energy to power all these datacenters?
(and why not build the datacenters at the Bakken formation)
You can see the burnoff from SPACE and it's for months at a time at each location, tell me that does nothing to global temperatures?
(look at the date on these photos, two decades of burnoff wasted energy)
* https://www.cnbc.com/2013/01/28/shale-gas-boom-now-visible-f...
* https://www.smithsonianmag.com/smart-news/at-night-giant-fie...
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#38[flagged]
Yeah, why would a governor be proud of pushing out two things that are unpopular with his constituents...
Re: Chevron signs 20-year power agreement with Microsoft for West Texas data center
#39The current natural gas price in West Texas (the WaHa hub, north of Coyanosa, TX) is negative. And has been for a while. The price peaked (dipped?) to -$9/MCF a couple months ago. That means gas producers had to pay $9 per MCF for it to be taken away. Oil in the Permian comes with gas, a lot of it, so to produce oil, you need to get rid of gas. Wells I'm familiar with have 4000-5000 cubic feet of gas per barrel of oi…
This might make sense for oil producers to get rid of their natural gas, which is nearly a waste material, but I'm struggling to understand how it makes sense for Microsoft. Despite the cheap natural gas, and an abundance of investors and builders with natural gas expertise, in the competitive electricity generation market everybody is deploying solar and batteries in west Texas because it's still more profitable tha…
The cost of gas is completely irrelevant. In order to bring a new large load onto the grid, you have to coordinate with ERCOT, and they just made that process more tedious. Once you get your grid connection approved and built out, you have to source your own power anyway, and frankly there just isn't enough power on the market to realize the stated datacenter buildout goals in this country.
In short, you're going to have to build your own power plant anyway, so why bother with the grid? Gas is the cheapest, fastest zero-to-production choice for onsite power generation, and has been for a long time. Unless you're dealing with nuclear, the fuel cost just doesn't matter compared to the rest of the buildout, and gas wins because you can take off-the-shelf turbines and bolt them down.
You can only get away with it in places that don't care about environmental regulations, which are the places most likely to approve new buildout of gas infrastructure anyway. Nobody in the northeast is going to approve the creation of a brand new carcinogen factory.