Energy trio wants to pipe gas from coal mines to keep datacenter lights on

Three companies in the US are teaming up to address the burgeoning energy needs of datacenters by using coal mine methane piped to on-site fuel cells at locations that are already hotspots for building bit barns.

Diversified Energy, FuelCell Energy, and TESIAC, an investment biz focused on infrastructure, are forming a partnership to meet the soaring demand for reliable power from server facility operators.

The agreement will see Diversified Energy supply natural gas and waste methane captured from coal mines to three locations in Virginia, West Virginia, and Kentucky. Solid oxide fuel cell technology from FuelCell Energy will use the gas to generate electricity on site, while TESIAC's role is to secure financing options for the projects.

Virginia is already known for its many bit barns, especially Northern Virginia, considered the datacenter capital of the world. However, developers are now looking further afield, with the neighboring state of Kentucky now becoming a favored area for siting new facilities.

Investment has been pouring into data facilities over the past year due to a huge jump in demand, largely driven by the craze for compute power to teach and deploy larger and more sophisticated AI models.

But this expansion isn't without its challenges, and powering those multiplying bit barns is one of them. A study last year predicted that US power consumption from datacenters is set to more than double by 2030, while one developer on the other side of the pond proclaimed that access to power is the single biggest constraint on new builds, and that he would be investing "hundreds of millions and more" if it weren't for issues in getting the projects wired up to the national grid.

These challenges have led bit barn operators to seek other options to power their expanding sites, including building near nuclear power plants and on-site generation of their own electricity, and various energy companies seek to profit from this.

• Our world faces 'unprecedented' spike in electricity demand
• Datacenter energy demand in bitbarn 'capital of the world' Virginia nearly doubled in second half of 2024
• London has 400 GW of grid requests holding up datacenter builds
• Datacenter energy use to more than double by 2030 thanks to AI's insatiable thirst

The trio in this case say they aim to provide on-site, scalable power generation to ensure uptime even in volatile market conditions, with the possibility of selling any spare capacity to the grid.

Diversified Energy president and chief financial officer Brad Gray claimed that his company's natural gas and coal mine methane footprint is "advantageously positioned in the Appalachian Region" to support the power generation needs of datacenters directly.

FuelCell Energy president and CEO Jason Few stated that the companies were confident they can meet operator energy needs more quickly and cleanly than other market alternatives.

"We believe the future of AI and other high-performance computing will require an abundant supply of clean, reliable, and locally generated power, ensuring that datacenters can operate with maximum efficiency and sustainability," he said.

However, methane is typically not used directly in fuel cells, but is first converted into hydrogen through a process called reforming, which still releases CO₂, though significantly less than directly burning methane would.

The partnership said it will share further information about specific projects and development timelines in the near future. ®