Gas turbine manufacturers struggling to meet surging demand from data centers - report
Turbine manufacturers beginning to limit investments to reduce risks of overexposure
Gas turbine manufacturers are struggling to keep up with demand from the data center sector.
Natural gas has quickly become a crucial power source to meet the skyrocketing energy demands associated with data center growth across the US.
However, according to a recent report from CTVC, gas turbine manufacturers are struggling to meet the surging demand, with delivery backlogs beginning to stretch past 2029.
Three companies- GE Vernova, Siemens, and Mitsubishi Heavy Industries- currently produce the majority of gas turbines globally. GE Vernova alone has the capacity to manufacture more than 50GW of turbines over the next five years.
However, according to Heatmap, rather than pushing for massive expansion, they have begun to limit investments to protect margins in order to reduce risks of overexposure if the expected growth of data center demand fails to come to fruition.
Fears of overbuilding have been exacerbated even further by the implications of DeepSeek - a Chinese AI model - which exhibited similar results to US-developed models at a fraction of the energy.
As a result, several power producers have begun to step back from gas as a precaution. Most notably, last month Engie canceled two planned gas power plants in Texas. The power producer cited a long timeline and heightened costs as the primary factors behind the decision.
As a result, gas manufacturers are advising developers that they may require more than seven to eight years to secure new turbines, which fall well outside data center development timelines.
The concerns have led some in the sector to begin to question the applicability of natural gas as a bridging fuel to low carbon alternatives, with many beginning to argue that it could be cheaper to go all in on low carbon alternatives. This is leading to increased interest in baseload alternatives such as small modular reactors and hydrogen fuel cells.
Despite this, many data center operators and natural gas producers remain bullish on the role the energy source will play in powering new data center capacity.
Both ExxonMobil and Chevron have announced plans to develop natural gas generation to directly serve the data center market.
In January, Chevron partnered with Engine No. 1 to collaborate with GE Vernova to establish a multi-gigawatt power plant using seven GE Vernova 7HA natural gas turbines. The partnership aims to develop up to 4GW, with an in-service target date at the end of 2027.
The power plant is set to supply AI data center developer Crusoe’s planned "large scale data center campuses" which Crusoe will build at as yet undetermined locations across the US.
Prior to this, in December, Exxon revealed it was planning to develop a 1.5GW natural gas-fired power plant dedicated to the data center sector.
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Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
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(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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