Gas turbines and on-site power for AI data centres explained

AI data centres are turning to on-site gas turbines and fuel cells because grid connections take years. Tracked projects are large on paper but small in operation: one tracker counts about 2 GW running against roughly 90 GW announced. Turbine makers report multi-year order books, and local air permits have become a flashpoint.

This post explains what "behind the meter" means, how these deals are structured, who owns the plant, how a later grid connection works, and where the published numbers disagree. Every figure is labelled by source and date as of 19 October 2026. Nothing here is investment advice or a forecast.

Key numbers at a glance

• GE Vernova Q2 2026 results, 22 July 2026: gas equipment backlog plus slot reservations rose from 100 GW to 116 GW in the quarter, with firm backlog at 53 GW and slot reservations at 63 GW (company statement).
• GE Vernova, same release: expects at least 125 GW under contract by the end of 2026 (company statement, forward looking).
• GE Vernova, same release: output of 20 GW a year in the third quarter of 2026, 24 GW in 2028, 30 GW targeted for 2030 (company targets).
• GE Vernova, same release: data centre orders above $5 billion so far in 2026, more than double 2025's total (company statement).
• Cleanview tracker, mid 2026: 59 behind-the-meter data centre projects, about 90 GW announced, about 2 GW operating (analyst tracker, methodology described by Cleanview).
• Cleanview: over 25 percent of planned US data centre capacity is behind the meter; 92 percent of projects announced since the start of 2025 (analyst tracker).
• Cleanview: projected cumulative operating capacity of 13 GW by the end of 2027 if projects with signed tenants meet timelines, or as low as 5 GW if delays continue (analyst scenario).
• Cleanview, Meta New Albany entry, status as of mid May 2026: 400 MW of gas generation in two 200 MW plants, neither connected to the grid, targeted for the third quarter of 2026 (analyst tracker citing Ohio permit documents).
• Datacentres.com Research, 19 August 2026: announced gas and fuel cell capacity tied to data centres over 12 GW globally, up from under 3 GW at the start of 2025 (unnamed industry trackers).
• Datacentres.com, same article: US interconnection queues hold more than 2,600 GW, with typical PJM waits of five to seven years (as cited from Lawrence Berkeley National Laboratory queue data and the author's reporting).
• Datacentres.com: on-site gas costs roughly $800 to $1,200 per kW, fuel cells roughly $3,000 to $4,000 per kW (author's estimates, ranges).
• Epoch AI, updated 28 July 2026: Stargate Abilene at an estimated 421 MW of IT power, projected 843 MW by Q4 2026 (analyst estimate, partly from satellite images).
• FERC, 18 December 2025: order in docket EL25-49 finding PJM's tariff unjust and unreasonable for co-located load and directing new transmission service options (regulator order, as summarised by Beveridge and Diamond).
• PJM, 14 July 2026: natural gas was 46 percent of cleared and committed capacity in its 2028/2029 auction, up from 43 percent in the 2027/2028 auction (grid operator).
• EIA, 6 October 2026 outlook: natural gas 40 percent of US generation in 2026 (government forecast).

What "behind the meter" means

Your electricity meter is the point where the grid hands power to a customer. Power made on the customer's side of that point is "behind the meter". For a data centre it means generating its own electricity next to the building, using gas turbines, gas engines or fuel cells, instead of waiting for the utility to deliver it.

There are three common set-ups.

• Bridge power. The site generates its own power until the grid connection arrives, then keeps the generators as backup or sells them on.
• Island power. The site never relies on the grid for its main supply.
• Hybrid. The site connects to the grid and also runs on-site gas, using each as conditions allow.

A related word is co-location, which usually means a data centre sits next to an existing power plant and connects to it directly. That is different from building new generation for the data centre, and regulators treat the two differently, as the section on rules below shows.

Why developers do this

The main reason is time. The datacentres.com article, published 19 August 2026, says US grid connection queues hold more than 2,600 GW of proposed generation and load projects and that typical waits in PJM run five to seven years. It cites Lawrence Berkeley National Laboratory for the queue data. It also says large power transformers carry a 36 month lead time, while fuel cells can be commissioned in as little as 90 days. Those figures are the article's own and are attributed by its author to the laboratory and to industry reporting.

The same article gives an illustrative example of a 300 MW campus that could earn $180 to $220 million a year in lease revenue and loses $15 to $18 million of deferred revenue for each month of delay. It frames a premium of about $200 million to self-generate as the price of avoiding a four year wait. The article itself calls these figures illustrative, so read them as a way of thinking about the trade, not as quotes.

The turbine bottleneck, in brief

Turbines have their own queue. GE Vernova's second quarter release on 22 July 2026 reports 116 GW of gas equipment in firm backlog or held by slot reservations, where a customer pays to hold a place on the production line before placing a firm order, and the company targets 20 GW of annual output in the third quarter of 2026 rising to 30 GW in 2030. The full order book picture for GE Vernova, Siemens Energy and Mitsubishi is in the companion explainer on gas turbine order books in 2026.

What gets installed instead

Because large combined cycle turbines are scarce, developers use other equipment. Cleanview says heavy-duty turbines are largely unavailable and that developers turn to mobile generators, aeroderivative turbines (jet engine based units), reciprocating engines and refurbished turbines. It reports more than 8.8 GW of permitted engines and turbines from Caterpillar and Solar Turbines among the equipment its permit review found, with Caterpillar at 33 percent and Bloom Energy fuel cells at 14 percent of its OEM share count. OEM means original equipment manufacturer.

The Meta campus in New Albany, Ohio shows what that mix looks like in one place. Cleanview's project entry, citing Ohio Power Siting Board documents, lists 30 generating units per 200 MW plant: three Solar Titan 250 turbines, nine Solar PGM 130 units, three Siemens SGT400 turbines and fifteen Caterpillar 3520 engines, with one more Solar unit held for outages. Each plant can produce up to 258 MW at design conditions but is rated at 200 MW.

How behind-the-meter deals are structured

A behind-the-meter plant is a power plant like any other. It needs an owner, an operator, a fuel supply, permits and a contract that says who pays for what. The published projects show a few patterns.

A third party owns the plant and sells to one customer. At New Albany, the power partner is Will-Power OH LLC, a subsidiary of the pipeline company Williams, and the data centre customer is Sidecat LLC, a Meta subsidiary, according to Cleanview's entry. Williams' own project page describes two sites, Socrates North and Socrates South, about 20 acres each with a combined 400 MW, and lists target in-service dates of the third quarter of 2026 for South and the fourth quarter for North. Cleanview describes the output as dedicated exclusively to the adjacent Meta data centre under a 10 year agreement with Williams. Construction was under way in mid May 2026: Cleanview's satellite review showed 11 of 15 turbines complete at the southern site.

The campus developer builds generation next to grid supply. Stargate Abilene, covered below, pairs utility substations with an on-site gas plant, which makes it a hybrid.

Temporary units bridge to a grid connection. The Memphis case below shows the bridge model and its risks, since mobile turbines can be installed faster than permits are issued.

Contract terms such as price per megawatt hour, fuel pass-through and penalties for outages are not public for any of these projects. Published material confirms structure and size, not economics.

Rules, permits and the later grid connection

Permits come from the state. In Ohio, the Socrates plants are regulated by the Ohio Power Siting Board, and Williams lists separate siting cases for the northern and southern plants (25-0188 and 25-0185) plus amendments for battery storage and a sound wall. Air permits are a separate track, which is where the Memphis and Southaven disputes arose.

Co-location with an existing plant needs grid operator rules. On 18 December 2025 the Federal Energy Regulatory Commission (FERC), which regulates interstate transmission, found PJM's tariff unjust and unreasonable because it lacked clear terms for generators serving co-located load, according to a 5 January 2026 summary by the law firm Beveridge and Diamond. FERC directed PJM to offer three alternatives to ordinary network service: interim non-firm service while upgrades are built, a firm contract demand service for loads that keep their grid draw within set limits using on-site generation, and a non-firm version of the same. FERC also found PJM's rules for behind-the-meter generation no longer just and reasonable because they do not fully account for that load in resource adequacy planning, and ordered changes with a transition for some existing customers. Final rates and terms were sent to a paper hearing with replies due on 17 April 2026.

Texas sets its own approval clock. Texas Senate Bill 6, as enrolled in 2025, requires notice before a new large load enters a net metering arrangement with an existing generator. ERCOT must study the arrangement within 120 days of receiving complete information, and the Public Utility Commission must decide within 60 days of receiving the study, or the arrangement is treated as approved. The bill also requires large loads to disclose their on-site backup generation, and lets ERCOT direct them to run that backup or curtail load in an emergency once other market tools are used.

The grid connection can come later. Cleanview reports that neither New Albany plant connects to the grid, while other buildings on the same campus do, and suggests the self-powered buildings will likely connect after the 10 year agreement ends. PJM's 14 July 2026 auction release describes "Connect and Manage" frameworks that would let large loads such as data centres connect but operate flexibly when needed, and says PJM began facilitating bilateral contracts of 10 years or more between large loads and new generation on 9 June 2026. Those are proposals and processes, not finished rules. For more on flexible connection, see the explainers on curtailment and flexible load and FERC's large load rules.

Two case studies

Stargate Abilene, Texas. This Oracle owned, OpenAI used campus, built by Crusoe, is a hybrid. Epoch AI's directory, updated 28 July 2026, estimates 421 MW of IT power and 843 MW projected for the fourth quarter of 2026. It describes a 200 MW substation built in 2022 and expanded in 2024 and a 1 GW substation that looked complete by July 2026. On the gas side it lists five turbines in place next to Building 2 as of 26 September 2025, five more under construction, and an on-site power plant that looked complete by 24 March 2026. These are inferred from satellite images, which Epoch notes. Epoch gives a current cost of $15.9 billion and a projected $31.9 billion.

xAI in Memphis and Southaven. TechCrunch reported on 18 June 2025 that the Southern Environmental Law Center, on behalf of the NAACP, sent a notice of intent to sue under the Clean Air Act. The notice said xAI had installed and operated at least 35 combustion turbines at its Colossus site near Memphis without required air permits, and that at one point the turbines could generate 421 MW. A flight on 15 June found at least 26 still on site. The notice alleged the turbines could emit more than 2,000 tons of nitrogen oxides a year. The Greater Memphis Chamber said some turbines were being removed, with about half staying as backup until a second substation connected the site.

On 10 March 2026 a local news report said Mississippi's environmental agency had granted an air permit for turbines to power the Colossus 2 data centre at Southaven, covering what it called dozens of gas turbines. Critics including the SELC and the NAACP called the timeline absurdly short, noting the decision came three weeks after the comment period ended. Supporters cited jobs and the need for computing capacity. The report gave no permit limits.

These are contested facts and allegations, set out here without taking a side. The emissions and permitting debate is covered in more depth in the explainer on on-site gas power, emissions and permits.

How big is this, really? Where the sources disagree

The sources give very different totals, and the differences come from what they count.

• Cleanview counts announced behind-the-meter projects at about 90 GW across 59 sites, and about 2 GW operating. Its tracker covers US behind-the-meter projects.
• Datacentres.com Research cites unnamed trackers for over 12 GW of announced gas and fuel cell capacity globally.
• Epoch AI is tracking individual campuses.

The 90 GW and 12 GW figures cannot be reconciled from the published material. They differ in scope, date and method, and the datacentres.com trackers are unnamed so the method cannot be checked. A safe reading is that announcements are large, operating capacity is small, and projections range widely. Cleanview itself gives a 2027 range of 5 GW to 13 GW cumulative depending on delays.

Gas is also a large part of the ordinary grid. PJM's 14 July 2026 release shows natural gas made up 46 percent of the capacity cleared or committed for 2028/2029, up from 43 percent in the 2027/2028 auction, and the EIA's October 2026 outlook has gas at 40 percent of US generation in 2026. On-site gas is a layer on top of an already gas heavy system.

What this means for neighbours and costs

Two practical points follow from the rules above. On-site generation can double as a grid resource in an emergency, which regulators now want visibility of. And air permits are a real constraint: datacentres.com says at least two Texas projects faced permit objections in 2025 that added four to six months, a claim from a single article.

Fuel price is the other exposure. The same article says Henry Hub gas prices ranged from $2 to $9 per MMBtu over three years. It presents that as a historical range, not a forecast. A site with no grid connection carries that fuel risk in full unless its contract passes it on, and published contracts do not say how it is shared.

What is firm and what is uncertain

Firm:

• GE Vernova's reported backlog and the output targets it has stated.
• The xAI notice of intent to sue and the Mississippi air permit are matters of record, though allegations remain allegations.
• Epoch's description of Abilene hardware, within the limits of satellite inference.
• FERC's December 2025 finding on PJM co-location and the Texas net metering approval clock in Senate Bill 6.

Uncertain:

• The total amount of on-site capacity. The sources conflict by almost an order of magnitude.
• Lead times, prices per kW, and the share of on-site capacity that will actually be built.
• Whether on-site power stays a bridge or becomes permanent.
• The final PJM terms for co-located and behind-the-meter load, which FERC sent to a paper hearing.
• Contract economics. No published project discloses its power price or how fuel risk is shared.

What to watch next

• GE Vernova's third quarter 2026 results, which should show whether it reached 20 GW annual output and its backlog.
• Whether Cleanview's 2027 operating total lands nearer 5 GW or 13 GW.
• Outcomes of air permit challenges, including Southaven.
• ERCOT rules arising from Senate Bill 6.
• PJM's compliance filings on co-located load and its Connect and Manage proposal at FERC.
• Whether the New Albany plants reach service in the third and fourth quarters of 2026 as targeted.

Related reading: the demand forecasts that drive this, nuclear deals for AI, and OpenAI's Stargate and 26 gigawatts.

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Quick check

Sources

• GE Vernova second quarter 2026 results (GE Vernova, SEC filing, 22 July 2026)
• Behind the meter power: gas turbines and fuel cells emerge as data centres escape the grid (Datacentres.com Research, 19 August 2026)
• Behind-the-meter data centers report (Cleanview, mid 2026)
• OpenAI Stargate Abilene directory entry (Epoch AI, updated 28 July 2026)
• xAI is facing a lawsuit for operating over 400 MW of gas turbines without permits (TechCrunch, 18 June 2025)
• State approves xAI's use of gas turbines in Southaven (Action News 5, 10 March 2026)
• Texas S.B. 6 bill analysis, enrolled (Texas Legislature)
• Socrates Power Solution Facilities (Williams, project page, checked 19 October 2026)
• Meta New Albany project entry, behind-the-meter data centers report (Cleanview, status as of mid May 2026)
• FERC orders PJM to create clear rules for co-located data centers and large loads (Beveridge and Diamond, 5 January 2026)
• PJM capacity auction procures 138,318 MW of generation resources (PJM, 14 July 2026)
• PJM auction procures 134,479 MW of generation resources (PJM, 17 December 2025)
• Short-Term Energy Outlook, October 2026 (US Energy Information Administration, 6 October 2026)

Last reviewed: 19 October 2026.