Chevron CEO Mike Wirth says natural gas will play a key role in powering data centers as renewables still face challenges supplying peak demand.
Wind and solar still face challenges meeting peak demand due their reliance on variable weather, Wirth said."It's a little hard to quantify right now because this is evolving so quickly on the AI side," Wirth told CNBC's Sara Eisen at the Milken Institute's Global Conference in Los Angeles.
Wind and solar offer affordable power in some regions, but they still face challenges in generating enough electricity to meet peak demand because they rely on variable weather conditions, the Chevron CEO said.
Wirth said coal plants are being phased out in the U.S., nuclear power is expensive, and geothermal energy is not as proven as other power sources."You come back to natural gas as the most likely source of that reliable baseload supply," the CEO said. Electricity demand in the U.S. is expected to surge by as much as 20% by 2030, according to research from Wells Fargo published in April. Natural gas demand could increase by 10 billion cubic feet per day, or bcf/d, by the end of the decade as a consequence, according to Wells. To put that in context, the U.S. currently consumes 35 bcf/d for power generation and 100 bcf/d total.
Goldman Sachs is forecasting that natural gas will provide 60% of the new electricity demand from data centers, while renewables will provide 40%. The investment bank saysThis solar stock is poised for 50% upside as demand strengthens on data center surge, Goldman saysMoney
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