Fuel Energy’s Increase Sparks a Turbine Provide Crunch

Gas power is experiencing a stunning resurgence, driven by soaring electricity demand. But as utilities scramble to secure new capacity, a turbine supply crunch is unfolding, forcing urgent procurement strategies, strategic collaborations, and a rethink of long-term generation planning.

For much of the past decade, gas power’s future has been in flux, riding on the assumption that the rise of renewables and growing pressure to decarbonize would gradually phase out fossil fuel-based generation. But at the end of 2023, an extraordinary reversal began to unfold.

“Gas turbines were dead in 2022–2023. I heard customers say we’ll never be able to get a regulator to approve gas turbines ever,” said Richard Voorberg, president of Siemens Energy North America, during a keynote speech at POWERGEN International in February. “Look at where we are today. We’re ramping up our capacity, we’re trying to produce more and more gas turbines,” he said. “And frankly, we can’t make enough gas turbines to support this market.”

Scott Strazik, CEO at GE Vernova, expressed similar astonishment during a company investor event in December 2024. “I’ve been involved in the gas business for 12 years,” he said. “I can’t think of a time that the gas business has had more fun than they’re having right now,” he said.

As experts told POWER, the sharp shift in gas power’s fortunes wasn’t entirely unexpected. Long recognized as a bridge resource, gas power has been a critical support for an energy transition centered on decarbonization. For years, it has gained momentum as the most viable, mature, and rapidly deployable dispatchable resource to replace aging coal and oil generation while facilitating the integration of intermittent renewables. The global supply shocks of 2022–2023, compounded by surging industrial demand, reinforced the urgency of supply security and infrastructure expansion. At the same time, the power sector has faced mounting reliability concerns, especially during extreme weather events, compounded by persistent delays in new resource development—owing in part to regulatory uncertainty, slow permitting, and transmission bottlenecks.

But the scale and speed at which gas power’s fortunes have reversed have more recently been propelled by the rapid rise of electricity demand, which has forced the power industry to rethink its long-term generation mix. Driven prominently by artificial intelligence (AI)–driven data centers and other large industrial loads, demand projections have only grown more staggering. PJM Interconnection, the largest grid operator in the U.S., recently raised its long-term load forecast, anticipating a dramatic 70 GW increase in summer peak demand over the next 15 years, bringing its summer peak to 220 GW by 2040. Winter peaks are expected to climb to 210 GW over the same period.

“Supply is coming off of the system, and new supply additions are not keeping pace,” Asim Haque, PJM’s senior vice president of Governmental and Member Services, recently told a U.S. House subcommittee. At the Electric Reliability Council of Texas (ERCOT), long-term load forecasts project a similar summer peak surge of 67 GW by 2032, driven by a load increase of 148 GW by 2030 from cryptomining, data centers, hydrogen production, and industrial needs, including from oil and gas (Figure 1).

Owing to these factors, gas power has recently gained crucial political backing, private sector urgency, and increased infrastructure investment. At the heart of this shift lies evolving priorities among major energy consumers, particularly hyperscalers. “About four years ago, they would say, if we’re building a data center, it must be renewables. And about two years ago, they said, we preferred renewables. And today, they care about power,” said BlackRock Co-Founder, Chairman, and CEO Larry Fink at the CERAWeek by S&P Global conference in Houston this March.

Gas Power in a Volatile Global Energy Landscape In its January-released Electricity 2025 report, the International Energy Agency (IEA) noted that gas-fired generation globally reached 1,615 TWh in 2024, a 2.6% increase over 2023. That marked a “new global high,” the agency noted. While the U.S. remained the world’s largest gas power market, gas power has grown into a key balancing resource for renewables in several regions, including China, India, and Southeast Asia. In China, the IEA suggests gas generation could surge 7% annually through 2027, largely owing to renewable integration challenges, flexibility needs, and industrial demand. Saudi Arabia, another notable emerging market, is looking to expand its gas power generation even more—by 10% annually 2027—to bolster its oil-to-gas transition and improve system efficiency. For now, Europe remains the “only major region where gas-fired output declined. Gas power in the region fell 6% in 2024 and is projected to decline another 6% annually through 2027, as aggressive renewables adoption and carbon policies displace fossil fuels. Considered as a whole, however, the IEA projects gas power will rise by an average annual rate of around 1% in 2026 and 2027. A key uncertainty lies in supply challenges and global market pressures related to global gas markets. For example, the IEA’s Gas Market Report Q1-2025 underscores that the market remains highly sensitive to project delays, geopolitical risks, and infrastructure constraints. While North America is projected to account for 80% of new liquefied natural gas (LNG) supply in 2025, setbacks in major projects, such as Golden Pass LNG and Energia Costa Azul, have pushed expected production into late 2025 or beyond. The halt of Russian gas transit via Ukraine in 2025 is expected to reduce European pipeline gas imports by 15 bcm, potentially increasing LNG demand and further tightening global supply. Meanwhile, shipping bottlenecks at the Panama and Suez canals owing to drought and security threats in the Red Sea have led to longer LNG transit times and higher freight costs, adding volatility to gas markets.

A Gas Turbine Supply Crunch Is Brewing

For now, the surge in demand is already testing the limits of the supply chain. While energy-focused data analytics and market intelligence firm Enverus projects 46 GW of new gas-fired power will come online over the next five years—compared to 39 GW in the past five years—POWER’s analysis of recent power company earnings reports suggests actual capacity in the pipeline may be significantly higher. Several utilities have indicated their demand for new gas capacity will be primarily for peaking power and firming capacity rather than continuous baseload generation. Many companies are notably also considering gas power fleet optimization and modernization.

“Looking at the order numbers, we’re not only getting advanced class gas turbines, but there’s orders for F-class, there’s orders for E-class,” Bobby Noble, senior program manager for Gas Turbine Research and Development (R&D) at EPRI, told POWER. “We’ve got a wide range of options being placed on order for the new capacity, depending upon the anticipated need.”

But manufacturers are already struggling to keep pace. “Right now, it’s years out—2029, 2030 before you can expect to have a new build ready to go,” Noble said. “We’re looking at a five-year-plus wait for new installs.” Original equipment manufacturers (OEMs) also have units in service that need replacement components and servicing, Noble noted. At the same time, competition for key components is growing, particularly for aeroderivative turbines, which are in high demand for peaking power. “You now have demand from the airline sector competing with power generation needs,” he added.

So far, all three major OEMs—GE Vernova, Siemens Energy, and Mitsubishi Power—have reported record backlogs. “For the full year, we built approximately 20 GW of gas orders, double last year’s level, and secured 9 GW of slot reservation agreements for new turbines,” GE Vernova’s Strazik said in January. Strazik noted the company is ramping up production from 48 turbines per year to 70–80 by 2026.

“We see accelerated activity in pipeline and gas that’s very focused in the U.S.—but not just the U.S. And what I’d emphasize on gas is it’s becoming an even more diversified demand cycle and that you can start to see in the numbers,” he said. GE Vernova had 25 HA orders this year—triple that of 2024—20 F-class units, and “north of 40 aeroderivative units,” he said. “Today, we’ve taken a business that was $6 billion of backlog two years ago. It’s $20 billion today.” While more than half of the backlog came from Europe, “20% to 25% is in North America, and the other 20% to 25% is the rest of the world with Asia really growing,” he noted.

Strazik noted that H-class turbines are in particularly high demand for AI-driven data centers, which require 24/7 efficiency, while reserve margins in PJM and ERCOT are driving simple-cycle F-class pipeline growth. “There’s a lot of simple-cycle demand growth for F-class that makes a lot of sense, and the reality is those are easier for us to make,” he said. Still, for now, GE Vernova expects to remain at a production ceiling of roughly 20 GW annually by 2027, he said.

Meanwhile, Siemens Energy said it is fielding a record order backlog of €131 billion. “Gas Services booked €5 billion of orders in the quarter, and the margin quality improved further as prices continue to increase,” the company noted in its latest earnings report. The strong demand spans large-scale turbines and industrial gas units. To meet demand, the company noted it was ramping up manufacturing capacity across multiple global sites, including expanding its blade and vane production in Tampa, Florida, and combustion system manufacturing in Budapest, Hungary. It is also strengthening its presence in high-growth regions, such as Saudi Arabia, where it has expanded its Dammam facility to assemble HL-class turbines.

2. Technicians at PSM’s advanced repair and manufacturing facility in Jupiter, Florida, install a high-performance gas turbine rotor—part of the company’s efforts to enhance efficiency and extend the lifespan of industrial gas turbines through precision engineering and reconditioning. Courtesy: PSM

To keep pace, some utilities and independent power producers are increasingly looking for alternative suppliers, including in the turbine aftermarket, which is now dominated by traditional OEMs. Market traction is evident for PSM (Figure 2), a division of South Korea’s Hanwha Group, specializing in multi-platform OEM gas turbine retrofits and combustion system upgrades, and Missouri-based ProEnergy, which is focused on aeroderivative turbines. South Korea–based Doosan Enerbility is also notably expanding its presence in the U.S. gas turbine services market, leveraging its Houston, Texas–based subsidiary, Doosan Turbomachinery Services (DTS), to provide performance upgrades, rotor lifetime extensions, and hot part replacements for the extensive existing 660-large 7F (150 MW) fleet.

The Scramble for Gas-Powered Megawatts

Utilities and power companies, meanwhile, appear to be engaged in a high-stakes race for gas turbine procurement to meet surging demand. POWER’s analysis suggests many companies have laid out aggressive strategies, including booking turbine slots years in advance, expanding supplier networks, and rethinking project configurations to avoid grid reliability shortfalls.

Duke Energy, which has multiple gas-fired projects in the pipeline, has already locked in key supply chain components to accelerate development. “We have secured turbines and gas supply for each of these sites, expediting our ability to connect megawatts to support economic development growth,” said Duke Energy’s new CEO Harry Sideris during the company’s latest earnings call in February.

Entergy, grappling with rapidly growing power needs across Texas, Louisiana, and Mississippi, is also asserting a firmer grip on crucial component supplies. “We have turbines, transformers, and other critical equipment as well as labor to do the work lined up for everything that we’ve announced, and then we have some capacity beyond what we’ve announced today already lined up,” said Entergy CEO Drew Marsh. “And we’re continuing to work on additional capacity beyond that because there are—we believe there are—more opportunities. And so we’re trying to be prepared for those opportunities should they materialize.”

However, “It is a much different space than it was 18 months ago for sure,” Marsh added. “Pricing is getting tougher in some cases. Costs are getting more expensive just for the slots. So we’re mindful of that. But at this point, we haven’t seen anything that materially changes our expectations about where we are and what we might be able to accomplish.”

Southern Company is also fielding a staggering demand outlook, projecting that economic development projects will drive more than 50 GW of potential incremental load by the mid-2030s, 80% of which is tied to data centers. Balancing immediate needs with long-term generation planning, it is evaluating turbine procurement for both near-term and long-term capacity while leveraging brownfield expansion opportunities and assessing efficiency upgrades across its 7,000-MW gas fleet. “Clearly, we’re having to pay reservation fees to get in line,” Southern Co.’s CEO Chris Womack said in February. “But, I’ll tell you right now, we feel pretty good about where we are because of our history with these OEMs and having this diverse supplier experience that we’ve been engaged with over a number of years.”

Some utilities have moved to secure aeroderivatives and simple-cycle turbines for rapid deployment while planning for future combined cycle expansions. “We’re seeing a lot of utilities ordering advanced class units in simple-cycle mode today with plans to add the heat recovery steam generators (HRSGs) and steam turbine later,” Noble said. “They’re buying themselves time while making sure they don’t fall behind on capacity needs.”

Several other power companies are approaching their potential gas expansion more cautiously, awaiting policy and market shifts that state or federal actions could shape. Vistra is pressing ahead to advance two new natural gas peaker plants totaling 860 MW, with a targeted 2028 in-service date, and converting its Coleto Creek coal plant to gas to extend its operational life beyond 2027 in Texas, where dispatchable power is receiving state support. “We are in the early stages of development,” said CEO Jim Burke, stressing that the final decision on construction “will depend on our view of the economics, including any market reforms being considered.”

Collaboration for Efficiency

An especially notable outcome of the procurement race for gas power equipment is that it has triggered a new wave of strategic collaborations, including between OEMs and utilities, or utilities and their large-load customers. NextEra Energy in February, for example, reinforced a collaboration with GE Vernova to leverage the company’s advanced H-class turbines for new gas-fired projects in a strategy aligned with NextEra’s broader capacity expansion plans. Entergy has a similar agreements to secure “critical long lead time” equipment with Mitsubishi Power Americas and Siemens Energy, including for advanced gas turbines that could serve major projects across Texas, Louisiana, and Mississippi.

“Through these partnerships, we have clear line of sight to acquire additional equipment for subsequent projects beyond our current plan. We also have long-standing relationships with our [engineering, procurement, and construction (EPC)] partners that can support additional projects,” noted Entergy CEO Drew Marsh during a a February earnings call. “Each of our combined cycle plants will be configured to enable future carbon capture and sequestration. Our current capital plan does not include dollars for CCS, but we are actively working on developing projects including customer supported investment and third-party ownership options. We have a FEED study underway at the Lake Charles Power Station with an expectation to move towards a decision this year.”

Also in February, NRG Energy forged a major alliance with GE Vernova and Kiewit through its subsidiary, TIC, to streamline turbine access, engineering, and project execution for new gas generation. The company has already secured two slot reservation agreements for 7HA turbines from GE Vernova, locking in 1.2 GW of capacity expected to come online by 2029. “With planned turbine access, coordinated [engineering and procurement] support, ready-to-build sites, and a fully integrated development approach, we can deliver power faster, more efficiently, and with greater certainty than anyone else in the market,” said Rob Gaudette, executive vice president with NRG Energy and head of NRG Business and Wholesale Operations. “Speed to market wins.”

Technological and Market Shifts in Gas Power

While gas power’s resurgence will likely persist for years, driven by soaring demand, industry is confronting critical infrastructure challenges, particularly in securing adequate natural gas pipeline capacity. Pipeline companies—responsible for delivering 75% of the natural gas used for U.S. power generation—are already struggling to keep pace with surging consumption, which has grown by 17% since 2018. Prospects for new gas infrastructure remain mired in permitting delays, regulatory hurdles, opposition from environmental groups, and uncertainties around long-term policy support, raising concerns about future supply constraints and winter reliability risks.

3. At Keadby Power Station in North Lincolnshire, a focal point in the UK’s energy transition, SSE is advancing the 849.45-MW Keadby 2 toward 100% hydrogen combustion while developing the 913-MW Keadby 3 CCS Power Station, which is expected to capture up to 90% of its carbon emissions when operational in the early 2030s. Courtesy: SSE

Still, for now, as in past years, OEMs and utilities remain committed to future-proofing their portfolios. All three of the major OEMs along with alternative suppliers and engine makers are heavily invested in advancing hydrogen and ammonia combustion to enhance fuel flexibility. Siemens Energy in December 2024, notably, launched the Mission H₂ Power initiative to develop a combustion system that will allow its flagship SGT5-9000HL gas turbine to run 100% on hydrogen to support the decarbonization of UK power giant SSE’s 849.45-MW Keadby 2 Power Station in North Lincolnshire (Figure 3), which began operations in March 2023. While R&D is promising, “The question there is how fast the infrastructure will be there to support adoption at scale,” Noble said.

The integration of battery storage with gas turbines to enhance grid stability and ramping speed is another notable trend, as demonstrated by hybrid plant configurations that combine synchronous condensers, flywheels, and energy storage systems to provide frequency support, inertia, and voltage control. In tandem, digitalization tools are also showing value, with predictive analytics optimizing gas turbine performance, AI-driven condition-based monitoring enhancing reliability, and digital twins enabling real-time efficiency improvements. Noble also pointed to a growing focus on AI-powered optimization tools to improve gas turbine dispatch strategies.

Finally, carbon capture and storage (CCS) remains a key priority for gas power, despite substantial industry pushback against the U.S. Environmental Protection Agency’s May 2024 power plant rule, which will require new gas plants to capture 90% of their carbon emissions. While CCS has not been demonstrated at scale or shown to operate under severe output restrictions, the industry is “working to understand how to keep our grid reliable and resilient,” Noble said. While projects like Net Zero Teesside will mark early steps, “We don’t just need one demonstration—we need multiple, tens of demonstrations before this is commercially viable,” he cautioned. “Utilities will have to weigh the options as the cost structure is a steep challenge. Whether using CCUS or some other means, keeping a reliable grid is the ultimate goal while meeting emissions requirements.”

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).