After years of investing in renewable energy, major tech firms like Amazon and Google are turning to natural gas to power their data centres. However, a new report suggests that such a shift could prove costly, as gas prices may triple within the next few years.

Noreva, an energy research firm, predicts that declining supply growth and rising exports of liquefied natural gas will lead to higher prices in some parts of the U.S. This could force hyperscalers to reconsider their investments, given that natural gas now accounts for about half the cost of electricity from a large power plant.

Peter Gardett, CEO of Noreva, warns that the energy markets have been lulled into complacency regarding rising gas prices. He argues that simple arithmetic shows a much tighter market than in previous years, and at least one investor was surprised by how much natural gas price risk hyperscalers are willing to take on.

The situation is further complicated by surging demand for natural gas, particularly as Texas becomes more connected to international markets. As wells become more expensive to operate, the regional market dynamics could shift dramatically, potentially leading to higher prices and influencing utility bills beyond just electricity.