AI’s Power Hunger Ignites Global Gas Turbine Rush, Squeezing Supply Chains

The Unprecedented Gas Turbine Renaissance

In industrial complexes across Japan, Germany, and the United States, a manufacturing revival is underway that few predicted just years ago. Workers at Mitsubishi Heavy Industries’ Takasago facility are racing to complete gas turbines weighing more than Boeing 747 aircraft—massive machines containing thousands of precision components requiring years to manufacture. This surge represents a dramatic reversal for an industry that recently faced what seemed like terminal decline.

As recently as 2022, industry leaders declared gas turbines effectively “dead,” with Siemens cutting nearly 7,000 jobs in 2017 amid projections that annual demand would stabilize at just 110 large units—a fraction of the industry’s 400-unit capacity. The clean energy transition appeared to spell the end for gas-powered generation. Today, that narrative has completely flipped, with orders forecast to reach 1,025 units in 2025, including 183 large turbines—the highest since 2011 and a 50% increase over the previous five-year average.

AI’s Insatiable Appetite for Power

The driving force behind this remarkable turnaround stems from an unexpected source: artificial intelligence. The computing infrastructure required to train and run advanced AI models demands unprecedented levels of reliable, 24/7 electricity—something intermittent renewables struggle to provide alone. The U.S. Department of Energy projects that data centers will consume 6.7-12% of the nation’s electricity by 2028, up from just 4.4% in 2023.

“There’s so much demand right now that we can’t meet it all,” says Yasuhiro Fujita, a 39-year veteran of Mitsubishi Heavy Industries. “I feel this boom is a big one because it’s worldwide. But right now, there’s a lot of demand out of North America.”, according to recent research

The computing requirements for projects like OpenAI and SoftBank’s $500 billion Stargate AI infrastructure initiative have made the United States the epicenter of new gas-fired power plant construction. Energy companies like Entergy are building multiple gas plants specifically to power massive data center campuses, including Meta’s Hyperion facility in Louisiana.

The Global Supply Chain Squeeze

The concentrated demand from U.S. tech giants has created a supply crunch with far-reaching consequences. The oligopoly of Mitsubishi Heavy Industries, Siemens, and GE Vernova that controls approximately two-thirds of global gas turbine production is struggling to scale manufacturing quickly enough. Customers now face wait times of three to five years for new turbines, with GE Vernova largely sold out through 2027 and now negotiating 2030 deliveries.

Manufacturers have revived practices not seen since the early 2000s boom, including demanding deposits to secure place in production queues and charging premiums for earlier delivery slots. According to Takao Tsukui, president of Mitsubishi Power, annual turbine orders representing 40 gigawatts of capacity between 2021-2023 have leaped to 60-70 GW for the 2024-2026 period.

Environmental and Geopolitical Consequences

This AI-driven dash for gas presents significant environmental challenges, running counter to global climate commitments under the Paris Agreement. While manufacturers are developing turbines capable of burning hydrogen for zero-emission power, the availability of clean hydrogen fuel remains uncertain.

The supply bottleneck also carries geopolitical implications. Asian emerging economies that viewed liquefied natural gas as a “bridge fuel” between coal and renewables now face extended delays in completing their power plants. “Nobody foresaw the U.S. coming in like this for the turbines,” says Wood Mackenzie gas analyst Raghav Mathur. “Even if Asian utilities want to place an order, they have to wait four or five years.”

This dynamic threatens to deny the U.S. and Japan a strategic tool for regional influence—supplying technology that China hasn’t yet mastered. With gas options constrained and grid infrastructure limiting renewable deployment, energy analysts warn that Asian nations may turn to coal plants, often using Chinese technology, to meet electricity demand.

Manufacturing Challenges and Strategic Shifts

The big three turbine manufacturers are pursuing aggressive production increases despite significant supply chain constraints. Mitsubishi Heavy Industries aims to double production within two years, while Siemens Energy has seen its U.S. orders jump from just one turbine in 2022 to approximately 200 units currently.

However, scaling production presents formidable challenges. Suppliers are already stretched thin serving booming aerospace and defense sectors. Rather than building new facilities that risk becoming stranded assets, manufacturers are focusing on modernizing and automating existing operations., as detailed analysis

Christian Buch, CEO of Siemens Energy, cautions that despite the current surge, he doesn’t believe U.S. demand will fundamentally reshape LNG markets long-term. The industry remains mindful of historical cycles where booms were followed by busts.

Emerging Markets Caught in the Crossfire

As manufacturers prioritize lucrative U.S. orders, emerging markets face potentially severe consequences. Southeast Asian nations that postponed LNG investments during the 2022 price spike now confront turbine shortages that threaten their energy transition timelines.

Vietnam and the Philippines, which have made significant bets on LNG, appear particularly vulnerable. The Institute for Energy Economics and Financial Analysis predicts Vietnam will miss its 2030 target of 22.5 GW of LNG-fired power capacity (up from just 1.6 GW currently) due to turbine availability constraints.

“The LNG-to-power industry in southeast Asia has faced many, many years of hurdles related to financing,” notes IEEFA researcher Sam Reynolds. “And I would put this gas turbine shortage as the cherry on top.”

Long-Term Outlook and Sustainability Questions

Industry leaders express confidence that the current boom differs fundamentally from previous cycles. “There’s real demand from data centers and AI,” emphasizes Mitsubishi Power’s Tsukui. “That’s decisively different from back then.” He predicts strong demand will persist for 5-10 years “at least,” driven by AI’s continuing expansion.

Nevertheless, questions about sustainability linger. Columbia University gas specialist Anne-Sophie Corbeau captures the uncertainty: “The big question for me is whether this is something which is going to be sustained or like a soufflé. People are starting to wonder if there’s an AI bubble. Who’s going to pay for these [AI] services and are we going to make advances in energy efficiency?”

As the industry races to meet unprecedented demand, the tension between AI’s power requirements, climate commitments, and global energy equity continues to intensify—with gas turbines sitting squarely at the center of this complex equation.

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