Babcock & Wilcox to Convert Coal Plants to Gas for Data Centers

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Investments in the U.S. and European markets will target efforts to convert coal-fired power plants to run on natural gas to meet the growing demand from power centers, Babcock & Wilcox (Akron, Ohio) said.

"Natural gas offers cost-effective and rapid deployment to support the development of data centers until renewables can match the pace of electricity demand growth," the company said.

Delegates at a recent conference on data centers noted the industry requires a hefty amount of capital. In Louisiana, state regulators recently backed a data center for artificial intelligence (AI) planned by Meta Platforms Incorporated (Menlo Park, California), the parent company of Facebook. The $10 billion facility will include both gas- and solar-powered facilities across the campus.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can view detailed project reports on the data center with this link.

Babcock & Wilcox said its partnership with Denham would use "substantial investments" to convert coal-fired plants to run on natural gas, saying gas may be a bridge to a cleaner future. Denham (Boston, Massachusetts) has a long track record of developing and building large-scale power plants globally.

"This partnership brings two well-established, experienced teams together to quickly and effectively identify opportunities to leverage underutilized coal-fired power plants to provide affordable, reliable power for large-scale data centers," said Kenneth Young, the chairman and chief executive officer for Babcock & Wilcox. "The rapid growth of AI and data centers is driving demand for new, dedicated electrical generation capacity for these facilities, and we see a tremendous opportunity to help customers meet their energy needs affordably and efficiently."

The partners were short on project specifics, but the race is on for more developments as advanced technologies become more entrenched. Amazon.com (Seattle, Washington), among the larger investors in data centers and AI technology, expects a capital budget of $118 billion for this year, compared with about $84 billion in 2024, which the company has indicated is primarily driven by investments in AI infrastructure.

Due to large data centers, the U.S. Energy Information Administration (EIA), the Energy Department's data cruncher, said it expects electricity demand in the Texas and Gulf Coast region to increase annually by 7% by 2025 and another 14% in 2026.

"Electricity generation has been growing rapidly this year as a result of growing demand for power from data centers and industrial customers," the EIA said in its monthly report for September. "We expect that total U.S. generation by the electric power sector will grow by 2.3% in 2025 and a further 3.0% next year."

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