Green Fundamentals: Gas Gridlock
Data-driven discussion of climate technology, finance, and policy
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This post and the information presented are intended for informational purposes only. They reflect solely the personal opinions of the author in his individual capacity. They do not reflect the views or opinions of any current, past, or future employer, organization, or affiliate.
Gas Turbine Scarcity Is Reshaping the Power Markets; Whoever Locks in Supply, Wins
Gas turbines have become the most critical commodity in U.S. energy markets. If you don’t have one locked in your order book, you’re staring down 2029+ delivery slots, and the developers who move first will shape the energy mix of the late 2020s.
For the last two decades, gas power buildout followed a boom-bust cycle, with manufacturers burning capital during periods of overinvestment, only to retrench when demand collapsed. This time? Demand is surging, but turbine makers are keeping the gates locked.
GE Vernova CEO Scott Strazik made it clear on the company’s latest earnings call: their gas turbine backlog is now fully stretched through 2028, and new orders are being priced at a premium. Developers without a slot are scrambling, because the AI-driven data center power boom is just beginning.
Source: Goldman Sachs
The Demand Explosion: No Longer Theoretical
For twenty years, power sector demand was a non-story. That’s over.
Data center load is expected to surge by 160% globally by 2030, adding the equivalent of a top 10 energy-consuming country to the grid.
The U.S. Southeast alone could see 20 GW of new gas capacity built in the next decade, largely to serve hyperscalers and manufacturing.
Even in markets where renewables are dominant, gas is the critical backstop—and there’s not enough of it.
We’re already seeing this play out in Virginia, where Dominion Energy is building a 1 GW gas-fired power plant explicitly to meet rising data center demand. These projects are replicable—but only if the turbines arrive on time.
Why the Market Can’t Meet Demand
The problem isn’t that gas turbines are complex. It’s that GE Vernova, Mitsubishi, and Siemens have no incentive to flood the market with supply. In 2018, the gas turbine sector overexpanded into a collapsing market. GE alone laid off 12,000 workers, and Siemens nearly spun off its energy division. They won’t make that mistake again.
Now, the industry is running with a structurally constrained order book:
GE Vernova has capped production at 20 GW per year through 2028. If you miss that cut, you wait.
Developers are bidding up “premium slots” for 2027+ deliveries, turning gas turbines into an auction market.
There’s no supply chain slack. Heavy-duty turbines require globalized supply chains that were weakened by the pandemic. You can’t just ramp production overnight.
The consequence? Even as power demand spikes, gas turbine manufacturers are enforcing capital discipline, lengthening their backlog to maintain pricing power.
Source: Global Energy Monitor
The New Playbook for Gas Turbine Sourcing
With the traditional supply pipeline clogged, some developers and energy companies are finding creative ways to secure gas turbines. Here’s what they’re doing:
Buying Priority Slots with Cash Upfront: Some companies are cutting to the front of the line by paying for “premium slots” in advance. Chevron secured 4 GW of GE Vernova’s 7HA turbines to power AI data centers—effectively reserving the manufacturing slots before formal project approvals. For example, NextEra and Chevron have both placed “slot reservations” ahead of turning those into contracted orders, allowing them to get turbines 1-2 years sooner.
Joint Ventures with Manufacturers: To avoid being at the mercy of slow turbine deliveries, some energy companies are partnering directly with manufacturers for faster access. For example, Duke Energy’s strategic agreement with Siemens gives them first priority on deliveries, locking in turbine supply for their Lincoln County expansion. Saudi Aramco and Mitsubishi formed a co-investment structure to ensure turbines for new industrial projects.
Buying Used or Retrofitting Existing Assets: With new turbines facing delays, some developers are refurbishing older assets or buying lightly used turbines from projects that were canceled or delayed. For example, Engie and Calpine have both purchased used or surplus gas turbines, cutting delivery times by 2-3 years. Dominion Energy is retrofitting existing simple-cycle turbines to increase output and efficiency, rather than waiting on new deliveries.
Manufacturing Local Supply Chains: Some energy developers are looking to localize production to shorten turbine wait times. For example, Hanwha Power and Baker Hughes are setting up domestic manufacturing hubs for gas turbine components, reducing dependence on global supply chains. GE Vernova’s acquisition of Woodward’s turbine combustion business gives it more control over its supply chain, potentially reducing delivery lead times.
The Bottom Line: Adapt or Fall Behind
The gas turbine scarcity isn’t a short-term bottleneck—it’s the new reality.
If you don’t have a turbine order locked in, you don’t have a project.
If you’re waiting until 2027 to buy turbines, you’re already too late.
If you think last-minute supply will materialize, you’re wrong.
Energy developers must be aggressive in their sourcing strategies—whether that means paying upfront for premium slots, forming direct partnerships, or acquiring used turbines. This is no longer just a question of who is willing to build new gas power—it’s a question of who can actually get the equipment to do it.
The companies that solve this supply chain puzzle will own the dispatchable power market for the next decade. The rest? They’ll be waiting in line.
See footnote for detailed valuation methodology and explanation.1
While technology companies are typically valued on Next Twelve Months (NTM) Revenue, traditional industrial businesses are often valued on Last Twelve Months (LTM) EBITDA. Due to the varied business models across climate tech (and the fact that many of the companies are not yet EBITDA positive) valuation multiples here are calculated based on Next Twelve Months (NTM) Gross Profit.
‘Climate Tech’ includes (1) any pure-play climate technology company that (2) has more than $200M market cap and (3) has positive revenue as well as gross profit (see sector deep dives for full list). ‘Traditional’ includes legacy market participants in relevant sectors (see sector deep dives for full list).
This post and the information presented are intended for informational purposes only. They reflect solely the personal opinions of the author in his individual capacity. They do not reflect the views or opinions of any current, past, or future employer, organization, or affiliate. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.