Shares of Cipher Digital were higher Thursday after it said it is developing pipelines to connect natural gas lines directly to its data centers to bypass grid bottlenecks.

Shares were recently up 12% at $17.02.

The data center operator said that the lateral pipelines will connect Cipher's sites to nearby natural gas supplies, allowing the on-site generation of up to 2.5 gigawatts of electricity.

Data centers, which have been sprouting across the country at a breakneck clip, are notorious for their power consumption as massive amounts of computing require both energy to power them and to keep them cool, putting significant pressure on grids that also power homes, hospitals and businesses. Cipher's plan revolves around the "bring-your-own-generation" concept, which requires technology companies to build or contract their own dedicated power supplies instead of connecting to and relying on public grids.

The company said it will work with power providers to develop and operate generation infrastructure at the sites, a move it says marks a significant step toward making new power available to them before the end of 2027.

"Securing and delivering power is the foundation of everything we do and bringing our own electricity generation allows us to unlock significant new capacity quickly," Chief Executive Tyler Page said.