The gas turbine OEM market has been caught with its pants down. Years of relatively low demand caused manufacturers to ramp down production and set up their supply chains.
Further, they issued decarbonization strategies with a focus on pet projects such as hydrogen-based turbines, battery energy storage systems (BESS), carbon capture, ammonia turbines, wind energy and solar photovoltaic.
From the outside, there appeared to be little determination to boost gas turbine sales. The perception was that gas turbine sales would never recover. But the signs of a big opportunity were there at least two years ago.
AI burst onto the scene with corresponding needs for outrageous amounts of power. OEMs failed to spot the trend and ramp up production. In recent months we do not hear much from the industry about what is being done to raise production. The result is lead times for turbines of three, four, five and even as much as seven years depending on the model, according to Bobby Noble, senior program manager for Gas Turbine Research and Development at EPRI.
Despite such backlogs, the next few years could experience the greatest period of construction of massive combined cycle plants throughout North America – some of them as big as 1 GW. Companies like NRG Energy want 13 GW of new gas-fired generation capacity. PG&E is predicting 10 gigawatts of new electricity demand from data centers over the next decade.
OEMS are reporting big orders and growing backlogs. Siemens Energy has doubled their orders in the last quarter compared to the same quarter a year ago. Data centers are a big part of this.
It remains to be seen if gas turbine OEMS can ramp back up their production capabilities enough to bring lead downs down to a level that doesn’t cause data centers and others wanting power to look elsewhere.
If wait times remain as they are today and costs spiral, the likelihood of a gas turbine boom diminishes with each passing month. The industry is inadvertently telling hyperscale data centers like Google, Microsoft, Amazon, and Facebook to find alternative sources of energy to power their AI data center dreams.
