Meta moves into power trading to support AI energy demand

Meta Platforms Inc. is preparing to trade electricity in US power markets as it seeks to speed construction of new generation needed to support its artificial intelligence expansion.

Urvi Parekh, Meta’s head of global energy, said plant developers and investors have warned that too few power buyers are willing to sign early, long-term agreements. Trading would give Meta the flexibility to enter those contracts and provide commitments that developers require to secure financing. Parekh said producers want buyers to take a larger role in backing new supply.

Demand for electricity has risen sharply as technology companies race to build more advanced AI tools. Meta, Microsoft Corp. and Alphabet Inc.’s Google each need far more power for their data centers. A Meta facility now under construction in Louisiana will require utility Entergy Corp. to add at least three new gas-fired plants.

Power companies often cannot move ahead with major projects without long-term buyers. Trading would allow Meta to hedge risk by reselling excess energy into wholesale markets if its data centers use less than expected. Analysts say tech firms are increasingly active on both the demand and supply sides of the US electricity system.

BloombergNEF projects that power demand from data centers supporting AI development will quadruple over the next decade. The surge has pushed residential electricity costs near record levels and turned energy prices into a political concern. More generation could moderate future increases.

Meta said power trading would help it manage long-term energy and capacity deals. The company noted it could lock in purchases from plants that are not yet built, allowing developers to complete lengthy planning steps. Other major energy users, including food producers and airlines, have long traded commodities to manage risk.

Trading also carries financial hazards. Market swings have led to large losses for companies in the past. Even so, Meta, Microsoft and Apple Inc. have sought federal approval to trade power. Microsoft cited the need to sell surplus supply, while Apple said trading is required to deliver clean energy to its facilities.

Parekh said Meta plans to build experience through external partners before entering markets on its own. The company is focused on PJM Interconnection LLC and the Midcontinent Independent System Operator, where it wants faster development of generation. CEO Mark Zuckerberg has said Meta is prioritizing heavy investment in AI infrastructure and expects large increases in electricity needs.