New Albany's Next Big Power Move: A New Gas Plant

When a data center developer builds not one, not two, but three on-site natural gas power plants in the same city, that's not a coincidence — it's a strategy. It reveals something important about the current state of the data center industry.

PowerConnex, an affiliate of Herndon-based data center developer, is proposing its third on-site natural gas power plant in New Albany, Ohio. This move continues a pattern that's becoming increasingly common across the country: hyperscale and colocation operators who can't wait for utility grid upgrades are simply building their own generation capacity. New Albany is becoming a case study in what that looks like at scale.

What's Actually Being Proposed

The project follows the same blueprint as its predecessors — an on-site natural gas power plant designed to meet the energy appetite of a data center campus that needs reliable, high-density power delivered now, not after years of grid interconnection queues and utility negotiations.

On-site generation at this scale isn't just a backup plan — it's the primary plan. For data center operators dealing with load requirements that can stretch into the hundreds of megawatts, waiting for a utility to build out transmission infrastructure is simply not a viable business model. Customers signing colocation contracts have SLAs that don't bend for grid constraints.

What makes the New Albany situation notable is the repetition. A third plant signals that the first two weren't anomalies — they were proof of concept. PowerConnex has found a formula that works, and they're scaling it.

The Economic Case for New Albany

New Albany doesn't end up on the data center map by accident. The city has spent years cultivating the right combination of available land, zoning flexibility, and business-friendly policies that make large-scale infrastructure investment feasible. Licking County and its surrounding areas have attracted significant capital precisely because they've made it easier to build.

Each gas plant and associated data center facility brings a wave of construction employment — electricians, civil contractors, mechanical trades — followed by the permanent operations workforce that runs the facility. Data centers aren't the labor-intensive factories of the 20th century, but they do generate high-quality, high-wage technical jobs in operations, electrical maintenance, and security. The tax base impact is often more significant than the headcount suggests.

The real economic multiplier here isn't just the plant itself — it's what the plant enables. By solving the power reliability problem on-site, PowerConnex can attract the kind of enterprise and hyperscale tenants whose presence in a market pulls ancillary businesses, fiber providers, and supporting infrastructure along with them. New Albany becomes stickier as a data center destination with each facility that comes online.

There's also a longer game around property values and commercial real estate activity in the corridor. Data center campuses tend to anchor development in ways that other industrial users don't — they generate sustained demand for connectivity, physical security services, and local vendor relationships.

What Three Gas Plants Mean for Local Energy Infrastructure

Here's the non-obvious angle that often gets missed in these announcements: on-site generation at data center campuses doesn't exist in a vacuum. It changes the relationship between the data center operator, the local utility, and the broader grid in ways that aren't always straightforward.

When a large load like a data center builds its own generation, it partially or fully withdraws from the utility as an energy customer — but it still typically remains interconnected for backup, supplemental power, or export. That changes the utility's load forecasting, their capital planning, and in some cases, their revenue model. Three on-site plants in the same city represent a meaningful shift in how New Albany's energy supply picture gets drawn.

The integration with existing infrastructure requires careful engineering. Natural gas supply lines need to handle the additional throughput. Interconnection agreements with the local utility have to be negotiated. Permitting for combustion equipment runs through air quality regulators who are increasingly attentive to cumulative impacts — not just what a single plant emits, but what three plants in proximity emit collectively.

That last point is where the complexity compounds. Each individual facility may clear environmental review. Three of them, in the same municipality, burning the same fuel, represent a cumulative air quality consideration that regulators and community stakeholders are paying closer attention to than they were five years ago.

The Environmental Tension Nobody Wants to Ignore

Natural gas is cleaner than coal — that's true, and it matters. But "cleaner than coal" is a low bar when you're talking about new infrastructure being built in 2024 and beyond, with operational lifespans measured in decades.

The data center industry has made aggressive public commitments around carbon neutrality and renewable energy. The hyperscalers — Microsoft, Google, Amazon, Meta — have announced targets ranging from 100% renewable energy matching to net-zero operations by various dates in the 2030s. On-site gas generation sits uncomfortably alongside those commitments, and the tension is real.

The honest answer from operators is usually some version of: "We need gas now because the grid can't reliably deliver what we need, and renewables plus storage aren't there yet for 24/7 firm power at this scale." That's a defensible position from a pure reliability standpoint. It's a harder position to defend when the plants you're building today will still be running in 2040.

The methane leakage question adds another layer. Natural gas generation's carbon footprint is heavily dependent on upstream methane emissions during extraction and transmission — emissions that are notoriously difficult to measure and often underreported. A facility that looks carbon-moderate on a direct combustion basis may look considerably worse when full lifecycle emissions are accounted for.

None of this makes the New Albany gas plant a villain in the story. It makes it a symptom of a genuine infrastructure gap that the industry hasn't solved yet.

Where This Goes From Here

The New Albany situation is a preview of debates that will play out in communities across the country as data center demand continues to compound. AI workloads are driving power consumption curves that were considered extreme by the standards of just three years ago. The infrastructure to support that demand — whether it's gas, grid, nuclear, or renewables — has to come from somewhere.

The trend line, at least at the policy and corporate commitment level, points toward an eventual transition away from on-site fossil generation. Battery storage is getting cheaper and more capable. Long-duration storage technologies are moving from pilot to commercial. Small modular reactors are attracting serious investment from data center operators who need firm, carbon-free power. Microsoft's deal with Constellation to restart Three Mile Island's Unit 1 reactor is the clearest signal yet that the industry is hunting for alternatives to gas that can actually deliver baseload reliability.

The question isn't whether natural gas generation at data centers will eventually be replaced — it's how many gigawatts get built in the meantime, and what the transition costs look like.

For New Albany specifically, the immediate opportunity is clear: get the infrastructure built, attract the tenants, and capture the economic activity. The longer-term question is whether the community, the utility, and the developer have a shared vision of what this corridor looks like in 15 years — and whether the gas infrastructure being built today is designed with that transition in mind or optimized purely for today's economics.

Developers who are thinking ahead are already exploring hybrid configurations: gas for firm baseload, paired with on-site solar and battery storage to offset a portion of emissions and reduce fuel costs over time. Some are designing facilities with the electrical infrastructure to transition to grid power or alternative generation when the economics and reliability picture shifts. That kind of forward engineering costs something upfront. It costs a lot more if you don't do it.

New Albany's third gas plant will get built, almost certainly. The smarter conversation — for developers, policymakers, and the utilities serving this market — is what gets built alongside it.

Call to Action: Explore more about the future of energy infrastructure and data centers at InfraSale Marketplace.

[INTERNAL LINK: data center trends]

[INTERNAL LINK: renewable energy commitments]

[INTERNAL LINK: energy infrastructure developments]