This year’s PowerGen International show took place in mid-February in Dallas at which data centers, artificial intelligence, and gas turbine exuberance predominated. It was a good place to gain insight into where the industry is going.
Powering the AI and Data Center Revolution
Artificial Intelligence (AI) is a big factor driving load growth in the U.S. and overseas creating a booming need for data centers, some enormous. Which has created a power crisis. Coupled with this boom in new data center construction, the traditional electric utility power provision channels are overwhelmed..
“We know power demand will continue to increase but, how much, is still to be determined,” said Marc Spieler is the senior managing director of global business development at AI chipmaker Nvidia. “The power generation industry is critical to driving AI.”
Fulfilling AI demand will cause high CAPEX spending by power producers which will push electricity rates higher. However, Spieler believes that AI can prevent electricity prices from soaring out of control via the introduction of operational efficiencies.
For AI chips to function, they must be supported by a network of high-power data suppliers. Compass Datacenters, a company which supplies many of those facilities, has been using hydrogenated vegetable oil (HVO) fuel to generate power but is now moving more into natural gas generation to fulfill demand.
“All large data centers should be connected to the grid at the highest voltage possible,” said Chris Crosby, CEO of Compass Datacenters. “AI is going to impact all of our lives.”
It is up to power producers and developers to get enough power to those facilities. That entails new power plants and a whole lot of transmission lines.
Providing Reliable Power
Entergy Texas, for example, is dealing with more than $2 billion of planned transmission investments.
“We are on our way to double our load demand within a decade,” said Eli Viamontes, the CEO of Entergy Texas. “We need a 40% increase in generation capacity in five years.”
The company is investing in all types of power generation to meet demand. That includes renewables, natural gas, hydrogen, and more. Carbon capture, too, will be included in some facilities.
Along with Meta and Amazon Web Services (AWS), Entergy is planning to build the largest data center in Louisiana.
Natural Gas Comeback
Richard Voorberg, Siemens Energy’s president for North American, said that back in 2022, a colleague wondered if the gas turbine business in North America might be dead.
Sales had all but disappeared under policies heavily favoring renewables and regulations hamstringing traditional power producers. What a difference two years makes.
“We cannot ramp up the grid fast enough,” said Voorberg, “we can’t make enough gas turbines to support this market.” He advocates the use of all possible sources of power and implementing the technology that makes the most sense and gets the job done.
While renewables and sustainability initiatives will continue to be important, he said. oil and gas continue to be needed to provide dispatchable power. Wind, though, may see a decline in new projects in the near term.
These opinions were supported by data from Industrial Info Resources (IIR). In late 2023, IIR noted that renewables now accounted for 95% of all planned new build generation over the following five years.
Natural gas made up the remaining 5%. In late 2024, gas arrested its decline and managed 7% of planned generation. Things have since taken a sharp up turn in early 2025.
“We expect build to increase a lot over the next few years,” said Britt Burt, Senior Vice President of IIR. “Data centers are driving high demand and they need firm power. But we still expect plenty of renewables to come onto the grid.”
