Politically Connected On-Site Power Startup Planning Off-Grid Generation to Energize AI Campus in Amarillo
Off-grid power may be the only way to expediently deal with a looming data center energy crunch, according to many leaders at high levels of government, private equity and power generation. Co-located units can bypass long interconnection and regulatory delays to meet the demand sooner.
In one case, a startup co-founded by former U.S. Energy Secretary and Texas Gov. Rick Perry is partnering with Texas Tech University on ambitious plans to build an $11 billion connected natural gas and artificial intelligence (AI) data center campus in Amarillo.
Fermi America is touting its plan of an “Amarillo HyperGrid” as the next generation in on-site power development to meet growing AI and cloud-based data center demand. The first phase will bring in six Siemens Energy SGT800 gas-fired turbines and one SST600 steam turbine to deliver about 478 MW of co-located power for the AI campus in the Texas Panhandle.
The project developers have a longer vision incorporating co-located nuclear energy for the complex.
Fermi America was co-founded by a team that includes American private equity investor Toby Neugebauer and Perry, who was the energy secretary in President Donald’s Trump first administration and Texas governor from 2000 to 2015. The company is named after Italian physicist Enrico Fermi, who played a significant role in the Manhattan Project to develop nuclear power.
Neugebauer has been a significant political donor to Republicans such as Perry and U.S. Sen. Ted Cruz in the past.
Although gas-fired power is the initial behind-the-meter power solution for the planned Amarillo HyperGrid, Fermi America also will seek federal Nuclear Regulatory Commission (NRC) approval to build utility-scale reactor plants alongside the Amarillo AI site.
Many in the U.S., such as Neugebauer and Perry, contend that AI is a national security issue and off-grid power is the best way to fuel those heavy loads. Nuclear power also operates at consistently high-capacity factors and does not generate carbon emissions.
Behind-the-meter power is the only solution to ensure “America’s AI dominance,” Neugebauer said in a statement. “Without it, we're handing China the keys to AI. There will only be one winner."
In the meantime, the project’s first gas-fired installation also will utilize selective catalytic reduction to reduce total emissions from the combined-cycle turbine power generation, according to the Fermi America statement. The company’s second power-unit acquisition, which closed last month, will add a set of three secondary market General Electric industrial gas turbines and a paired steam turbine which previously operated to provide power for an industrial customer in New Jersey.
All of those previously used GE units will be refurbished and made operative in simple cycle mode.
"The executed agreements will allow Fermi America to acquire highly reliable, energy-efficient, and environmentally advanced power generation systems to support the artificial intelligence campus," added Fermi America Chief Power Procurement Officer, Larry Kellerman. "The initial fleet represents ISO rated capability of over 600 MW of power generation equipment that is available for shipment and refurbishment, avoiding multi-year Original Equipment Manufacturer (OEM) lead times."
Utility-scale nuclear power plants currently generate about 18% of total U.S. electricity, but building new plants is time consuming and hugely expensive. Southern Co.’s Vogtle Unit 3 and 4 reactor expansion projects, while now delivering the single biggest carbon-free generation nationwide, took about a decade and cost close to $35 billion to add the two units.
Next-generation combined cycle gas-fired power installation as a starter would be cheaper and quicker to build while also contributing less CO2 emissions compared with current coal and gas generation, the company says. Fermi America hopes to build the first of the nuclear power installations by 2032.
West Texas also is home to the Permian Basin oil and gas play which is the most prolific in the U.S.
Details on the partnership with Texas Tech University are not clear yet, nor what kind of financial backing the company has beyond its associations with Neugebauer and Perry.
And while Fermi America is seeking federal nuclear regulatory approval, its appeal is first to the Trump Administration, which is seen by many as seeking to pull oversight power away from the NRC and place it within the White House, according to some reports.
The Trump-led U.S. Department of Energy has announced plans to streamline advanced reactor project development and reduce the lengthy review processes of the NRC.
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About the Author
Rod Walton, Microgrid Knowledge Managing Editor
Managing Editor
For Microgrid Knowledge editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
I’ve spent the last 15 years covering the energy industry as a newspaper and trade journalist. I was an energy writer and business editor at the Tulsa World before moving to business-to-business media at PennWell Publishing, which later became Clarion Events, where I covered the electric power industry. I joined Endeavor Business Media in November 2021 to help launch EnergyTech, one of the company’s newest media brands. I joined Microgrid Knowledge in July 2023.
I earned my Bachelors degree in journalism from the University of Oklahoma. My career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World, all in Oklahoma . I have been married to Laura for the past 33-plus years and we have four children and one adorable granddaughter. We want the energy transition to make their lives better in the future.
Microgrid Knowledge and EnergyTech are focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.