Natural gas is experiencing a surprising revival on the US power grid as data centers fuel unprecedented electricity demand. For years, renewable projects dominated interconnection queues while gas projects dwindled. However, the surge in AI-driven data center construction has flipped this trend, with grid operators now prioritizing reliable, around-the-clock fossil fuel generation.

The Southwest Power Pool reports natural gas capacity seeking grid connection has jumped more than sevenfold from 2022 to 2025. Meanwhile, Texas grid operator ERCOT shows gas projects have surpassed wind as the third most common proposed energy source. PJM, serving the data center-heavy Virginia corridor, now finds gas leading its reformed interconnection queue—a stark reversal from 2020 when 95% of backlogged projects were renewables.

Major gas producers like EQT and equipment manufacturer Kodiak Gas Services are positioning for this demand surge, with over 100 proposed gas-fired plants in Texas alone. However, turbine shortages could delay many projects until 2030 or 2031, raising concerns about stranded assets as renewable costs continue falling.

Despite the gas resurgence, analysts project renewables will still dominate long-term capacity additions. Wood Mackenzie forecasts 72GW of new gas capacity versus 268GW combined from solar, wind and storage between 2026 and 2030. Grid operators face a critical balancing act between meeting immediate data center demands and achieving long-term decarbonization goals.