SpaceX and Tesla plan their own natural gas power plants for massive $16.8 billion Texas chip factory

[Skye Jacobs]

The takeaway: SpaceX plans to build natural gas power plants and large battery systems for the massive chip factory it is developing with Tesla in Texas. The companies are moving ahead with the first phase of the Terafab project, which is expected to cost $16.8 billion, and have confirmed that the factory will be built in Grimes County. The initial development is expected to create 3,000 jobs and will receive a $30 million Texas Enterprise Fund grant.

Riley Trettel, who oversees energy and data center development for SpaceX, said the companies will handle much of the project's power needs themselves.

"We're bringing our own power," Trettel said during a public meeting in Grimes County. "We're going to be building natural gas fired power plants, and we're going to be building very large battery arrays in order to store energy."

The decision points to the power demands expected from the semiconductor plant. Chip factories require large amounts of steady electricity, and the project's developers are planning generation and energy storage as part of the broader construction effort.

The factory is expected to cover 100 million square feet over several phases. It will be built on about 3,000 acres, though SpaceX controls more than 13,000 acres in the area. That gives the company room for the factory, power infrastructure, and further development.

Trettel said work on the site will begin quickly. "We are going to be moving nearly immediately to get going on the project," he said. "We need to get our civil work started. We need to start to get foundations in place, and we're going to get cracking."

– Elon Musk (@elonmusk) August 6, 2026

Intel joined the project in April and is expected to provide expertise in chip design, fabrication, and packaging. The factory is expected to make two types of chips. One would be used in Tesla electric vehicles and Optimus humanoid robots. The other would be designed for use in space.

Elon Musk, who leads both SpaceX and Tesla, has said the chip industry is not moving fast enough to meet demand from his companies and the wider technology sector. He has also raised concerns about geopolitical risks in the semiconductor supply chain.

The energy plan fits with Musk's approach of keeping key parts of the supply chain within his companies. Tesla already builds Megapacks, utility-scale battery storage systems, and operates a Megapack factory west of Houston.

Rising demand from data centers and advanced factories has increased interest in new natural gas plants and battery storage across Texas and other major markets. For SpaceX and Tesla, building power assets alongside the factory could reduce reliance on outside power development as the Terafab project moves from site work to production.

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SpaceX and Tesla plan their own natural gas power plants for massive $16.8 billion Texas chip factory

 

[pnntmp]

Fantastic news!

Now waiting for the first lawsuit from some China -financed NGO because the chip factory will disturb the insects around.

 

[LordVile95]

Fantastic news!

Now waiting for the first lawsuit from some China -financed NGO because the chip factory will disturb the insects around.

They should be going for a clean energy source rather than gas

 

[Megalomaniac]

They should be going for a clean energy source rather than gas

Exactly: Or some exotic low-emissions fuel related to space exploration.

Tesla claimed it was supposed to be beyond petroleum.

Something smells Musky.

 

[Loadedaxe]

Fantastic news!

Now waiting for the first lawsuit from some China -financed NGO because the chip factory will disturb the insects around.

They should be going for a clean energy source rather than gas

Exactly: Or some exotic low-emissions fuel related to space exploration.

Tesla claimed it was supposed to be beyond petroleum.

Something smells Musky.

You guys are managing to argue about everything except the actual engineering.

Just use clean energy sounds great, but a semiconductor fab this enormous requires massive amounts of uninterrupted 24/7 power. Solar and wind can absolutely supplement it, but they are intermittent, and batteries store power ...they don't magically create it. Nuclear would be a great low carbon baseload option, but you aren't simply ordering a nuclear plant from Amazon and plugging it in next Tuesday.

That is why the interesting part of this story is being overlooked...SpaceX says Terafab will generate its OWN power with natural gas plants and huge battery arrays rather than dumping this massive new load onto ERCOT.

And “some exotic low emissions fuel related to space exploration”? Why?
It's a chip factory, not the Enterprise.

You choose an energy source because it can reliably and economically produce the required electricity, not because it sounds futuristic.

There are plenty of legitimate questions here for sure, like emissions, water consumption, tax incentives, the sheer $16.8 billion scale, and whether the predicted demand will ever justify this monster.

Those would actually make an interesting discussion.

As for lawsuits over insects and China funded NGOs...come on. We can discuss a gigantic industrial project without immediately turning everything into a conspiracy theory.

Sometimes engineering and economics are complicated. A bumper sticker answer from either side doesn't make them less complicated.

 

[m4a4]

Hmmm, wonder if they'll also solar panel up the roof to help fill the batteries on sunny days. Not seeing anything obvious on my shallow look.

 

[pnntmp]

They should be going for a clean energy source rather than gas

They should be going for *any* reliable and economically viable energy source.
Nat gas is reliable, abundant, cheap and clean, so it's a perfect choice.

When you start building your own chip factory, pick an energy source of your choice. Until then, leave others to decide on their own factories.
Or you may apply as a consultant for Terafab, and if you get the job - tell them what you think they should be going for.

 

[Loadedaxe]

They should be going for *any* reliable and economically viable energy source.
Nat gas is reliable, abundant, cheap and clean, so it's a perfect choice.

When you start building your own chip factory, pick an energy source of your choice. Until then, leave others to decide on their own factories.
Or you may apply as a consultant for Terafab, and if you get the job - tell them what you think they should be going for.

You’re right on one important point...natural gas is reliable, dispatchable, abundant and currently very practical for a facility that absolutely cannot tolerate unstable power.

But calling it simply “clean” is stretching it. It’s cleaner than coal, certainly, but it still produces CO₂ and methane emissions. “Cleaner” and “clean” are not the same thing.

LordVile’s original comment was oversimplified too ... “just use clean energy” ignores reliability, capacity, storage and construction timelines...but that doesn’t mean the only choices are “natural gas is perfect” or “shut up unless you own the factory.”

I’m not being judgmental here, and I’m not arguing just for the sake of arguing. This is important. I just think everyone's comments should be based on common sense, engineering reality and the actual tradeoffs involved instead of everyone immediately planting a flag on one side.

Natural gas makes a lot of practical sense here, but it comes with environmental costs. Clean energy has obvious advantages, but it also has reliability and implementation challenges at this scale.

 

[Kashim]

As for lawsuits over insects and China funded NGOs...come on. We can discuss a gigantic industrial project without immediately turning everything into a conspiracy theory.

You're talking to MAGA-tards, so what do you expect? Everything is a conspiracy theory to them, it's in their DNA. The more fantastical and outlandish the story the better. These are the same people who believe the nonsense in the bible about talking snakes, people living to be 900 years old, rain that lasts 40 days, senior citizens building giant arks that can hold two of every species (all 2+ million), magical Jews who can walk on water and can come back from the dead, etc. Compared to that nonsense China funded NGOs aren't all that far fetched.

 

[Loadedaxe]

You're talking to MAGA-tards, so what do you expect? Everything is a conspiracy theory to them, it's in their DNA. The more fantastical and outlandish the story the better. These are the same people who believe the nonsense in the bible about talking snakes, people living to be 900 years old, rain that lasts 40 days, senior citizens building giant arks that can hold two of every species (all 2+ million), magical Jews who can walk on water and can come back from the dead, etc. Compared to that nonsense China funded NGOs aren't all that far fetched.

And this is exactly how a technology discussion turns into tribal nonsense.

You just took a conversation about energy policy, natural gas and a semiconductor fab and somehow turned it into “MAGA-tards,” Christianity, talking snakes and Noah’s Ark.

That isn’t an argument. It’s a pile of stereotypes and insults aimed at millions of people who don’t all think, vote or believe the same things.

There are Republicans who reject conspiracy theories. There are Democrats who believe ridiculous things. There are Christians who read parts of the Bible literally, others who read them symbolically, and plenty of people across every political and religious group who are perfectly capable of thinking critically.

More importantly, none of that tells us whether the original claim about a “China-funded NGO” is true.

That is the part that should matter most...show evidence for the claim or call it speculation. Political labels and mocking someone’s religion don’t magically turn speculation into fact.

I’m not interested in defending MAGA, Democrats, Republicans, Christians or atheists just because they belong to a particular tribe. I’m interested in whether what someone says is actually supported by facts and common sense.

If we want TechSpot discussions to be worth reading, maybe we should debate the claim instead of inventing a biography for everyone we disagree with.

 

[pnntmp]

You’re right on one important point...natural gas is reliable, dispatchable, abundant and currently very practical for a facility that absolutely cannot tolerate unstable power.

But calling it simply “clean” is stretching it. It’s cleaner than coal, certainly, but it still produces CO₂ and methane emissions. “Cleaner” and “clean” are not the same thing.

LordVile’s original comment was oversimplified too ... “just use clean energy” ignores reliability, capacity, storage and construction timelines...but that doesn’t mean the only choices are “natural gas is perfect” or “shut up unless you own the factory.”

I’m not being judgmental here, and I’m not arguing just for the sake of arguing. This is important. I just think everyone's comments should be based on common sense, engineering reality and the actual tradeoffs involved instead of everyone immediately planting a flag on one side.

Natural gas makes a lot of practical sense here, but it comes with environmental costs. Clean energy has obvious advantages, but it also has reliability and implementation challenges at this scale.

OK, what is "clean"?
Absolutely everything we do impacts the environment somehow. Manufacturing solar panels is not an exception.
We definitely need to do things that are not "clean" in terms of environmental impact in order to progress.
The environmental impact of using nat gas as a power source is negligible. The upside is colossal - we have energy to run factories, datacenters etc..
Why should we abstain from nat gas? "Climate change"?

 

[Endymio]

You're talking to MAGA-tards, so what do you expect? Everything is a conspiracy theory to them, it's in their DNA.

Conspiracy theories like "Trump's a secret Russian agent" or "Hunter's laptop is a Russian fake"? Conspiracies like "The election was stolen from Stacey Abrams" or "The assassination attempt on Trump was staged"? Or the recent shooting at the WH Correspondent's Dinner was staged by "right-wing activists" to build support for the new ballroom? That Ashley Biden's diary is a forgery? The widespread claims that the 2016 Presidential election (and even the 2004 election of Bush) were "hacked"?

When even far-Left sites like NYT and NPR are admitting that the Left is becoming hag-ridden with conspiracy theorists, you know the problem is overwhelming:

Left-Wing Misinformation Is Having a Moment (Published 2024)

America’s right flank remains the chief purveyor of misinformation, but this summer’s political tumult created ideal conditions for falsehoods to spread among progressives.

www.nytimes.com

https://www.npr.org/2026/04/27/nx-s1-5800827/more-on-the-political-left-are-embracing-conspiracy-theories

 

[Loadedaxe]

OK, what is "clean"?
Absolutely everything we do impacts the environment somehow. Manufacturing solar panels is not an exception.
We definitely need to do things that are not "clean" in terms of environmental impact in order to progress.
The environmental impact of using nat gas as a power source is negligible. The upside is colossal - we have energy to run factories, datacenters etc..
Why should we abstain from nat gas? "Climate change"?

I agree with you that “clean” is a relative term. Nothing we manufacture or consume is impact free. Solar panels require mining, refining, manufacturing, transport and eventually disposal. Wind, nuclear, hydro...all of them have environmental costs somewhere in the chain.

And I absolutely agree that society cannot simply stop using anything that has an environmental footprint. Reliable energy is what allows factories, hospitals, data centers, transportation and modern civilization in general to function.

Where I disagree is calling the environmental impact of natural gas “negligible.” It isn’t. Natural gas burns much cleaner than coal in several important respects, but it still produces significant CO₂, and methane leakage during production and transportation matters because methane is a very potent greenhouse gas.

That doesn’t make natural gas evil or mean we should immediately stop using it. It means we should describe the tradeoff accurately.

For something like this chip fab, natural gas may very well be the most practical solution available today because it is dispatchable, proven and reliable. That is a legitimate engineering argument.

But “natural gas is useful” and “climate change doesn’t matter” are two different claims.

My position is pretty simple...use the energy sources that keep civilization functioning, reduce their environmental impact where it is practical to do so, and keep developing better alternatives without pretending we can switch everything overnight, we cant, however we need to always be trying to find a better solution.

That seems a lot more realistic than either “ban fossil fuels tomorrow” or “their environmental impact is basically nothing.”

 

[LordVile95]

You guys are managing to argue about everything except the actual engineering.

Just use clean energy sounds great, but a semiconductor fab this enormous requires massive amounts of uninterrupted 24/7 power. Solar and wind can absolutely supplement it, but they are intermittent, and batteries store power ...they don't magically create it. Nuclear would be a great low carbon baseload option, but you aren't simply ordering a nuclear plant from Amazon and plugging it in next Tuesday.

That is why the interesting part of this story is being overlooked...SpaceX says Terafab will generate its OWN power with natural gas plants and huge battery arrays rather than dumping this massive new load onto ERCOT.

And “some exotic low emissions fuel related to space exploration”? Why?
It's a chip factory, not the Enterprise.

You choose an energy source because it can reliably and economically produce the required electricity, not because it sounds futuristic.

There are plenty of legitimate questions here for sure, like emissions, water consumption, tax incentives, the sheer $16.8 billion scale, and whether the predicted demand will ever justify this monster.

Those would actually make an interesting discussion.

As for lawsuits over insects and China funded NGOs...come on. We can discuss a gigantic industrial project without immediately turning everything into a conspiracy theory.

Sometimes engineering and economics are complicated. A bumper sticker answer from either side doesn't make them less complicated.

Then they should wait until they can get a SMR rather than dump a ton of CO2 into the atmosphere.