Gas Turbines

Here comes the gas boom (again)

With simple-cycle and combined-cycle gas turbines in such high demand, buyers of F-Class, advanced-class and aeroderivative gas turbines are experiencing lead times not seen since the gas boom of the early 2000s.
Here comes the gas boom (again)
(JAC gas turbine. Image credit: Mitsubishi Heavy Industries)

By Joey Mashek, Burns & McDonnell

Natural gas is yet again making headlines for its role in providing reliable power to maintain grid stability.

Amid federal and state mandates driving the sector toward cleaner and more efficient solutions, natural gas has emerged once again as a crucial player in the transition to a more sustainable energy landscape. Recent Integrated Resource Plans (IRPs) indicate that utilities are planning for the largest increase in gas plants in over a decade, with the years 2028 and 2030 expecting dramatic increases in renewable energy usage to balance and maintain grid reliability.

Regulatory drivers aside, the need for energy-dense, dispatchable electricity is fueled by the continuous retirement of coal facilities, the burgeoning of data centers, the rapid development of AI technologies and the onshoring of manufacturing trends. By 2028, the growth of data centers, supercharged by the development of AI, could consume 7.5% of all electricity in the U.S. This calls for an urgent need for the U.S. to enhance its infrastructure to accommodate this significant load growth in addition to what’s currently planned. These factors highlight the challenge that renewable energy sources alone face in supplying the necessary power capacity to meet escalating energy demands. 

The demand for new gas generation builds is back 

Given the prevailing demand, the lifecycle of gas projects is now being significantly prolonged. Essentially, if you haven’t started proactive project planning yet, you may be already running behind.

A reoccurring conversation we’ve been having with customers is about the need to build new gas generation in addition to renewables. With simple-cycle and combined-cycle gas turbines in such high demand, buyers of F-Class, advanced-class and aeroderivative gas turbines are experiencing lead times not seen since the gas boom of the early 2000s.

Historically, the steps for developing a new gas generation project included front-end studies, siting and permitting and interconnecting to the grid before buying the equipment needed for the project. In the current market, securing long-lead equipment and entering the interconnection queue has become the main priority. 

Yes, the gas boom is back. Its resurgence in the market highlights its indispensable role in today’s energy transition. Natural gas facilities can provide the critical path forward to support and solve the challenge of increasing load growth. Nearly half of the coal-generating capacity seen in 2011 is expected to be retired by the end of 2026 as the U.S. continues its sustainable efforts. 

Signs of a booming market for simple-cycle, combined-cycle and recips are prominent across the United States. It may be too early to tell what it will bring and how long it will last, but keep an eye on signs such as lead times for major equipment, craft labor availability and changes in project development processes as indicators of the ongoing longevity of the gas boom. 

About the Author: Joey Mashek is the U.S. sales and strategy director for the Power Group at Burns & McDonnell. With nearly 20 years of experience, he discusses, develops and negotiates generation needs for utilities, independent power producers (IPPs), cooperatives, municipalities and end users across North America.

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