American Supercritical came out of stealth Wednesday with $8 million in funding and a plan to attach supercritical CO2 units to the simple-cycle gas turbines that many data centers rely on for power. These turbines convert only about 35% of fuel energy into electricity, with the rest lost as hot exhaust. The startup says its closed-loop CO2 system can capture that exhaust heat and generate additional electricity without burning more fuel or adding water use.

Carbon dioxide becomes supercritical under pressure and temperature, giving it liquid-like density and gas-like behavior. The company's units transfer exhaust heat directly to the pressurized CO2, producing extra power in what cofounder Simon Shuham calls 'miniature combined-cycle plants.' Unlike conventional combined-cycle systems, the CO2 loop does not need refilling and can eliminate or greatly reduce water consumption. The company plans to sell a 10-megawatt unit first and claims it can boost turbine efficiency by up to 50%.

Supercritical CO2 power has been studied for more than 50 years, but commercialization has been slow. Doug Hofer, an adviser and former GE turbine engineer, says more compact heat exchangers were a key breakthrough, but established turbine makers have little incentive to back a potential competitor. University of Central Florida professor Subith Vasu says supply-chain and cost hurdles remain. With data-center power demand soaring and $7 trillion in global data-center investment expected by 2030, the startup sees a ready market for retrofits that let operators expand without adding new turbines.