Why a Plane-Size Machine Could Foil a Race to Build Gas Power Plants

To listen to the officials of the Trump administration and many energy managers, the United States are on the precipice of a new era of natural gas that will be largely led by the voracious power needs of the data centers.

But transforming natural gas into electricity requires giant metal turbines that are increasingly difficult to protect. The companies that have not already reserved this equipment, which can weigh as much as a large plane and cost hundreds of millions of dollars, are facing expectations of three or four years, about twice a year earlier.

The cost of building electrical gas power plants has also increased, to the point that in some parts of the country, solar panels and batteries are likely to be cheaper, the managers of energy and consultants said. According to some estimates, it now costs two or three times more to build a gas plant like a few years ago.

The challenge of guaranteeing enough gas turbines is one of the clearest examples of how the intense investments in artificial intelligence are remodeling the electrical industry, crushing suppliers and overturning the long -standing notions of what makes sense financially.

It is also a reminder of the gap that often exists between the plans and objectives of politicians and managers and reality on the field.

The demand for US gas is clearly increasing, all the more because of the data centers necessary to train and use chatbots and other forms of artificial intelligence, but there are limits to more gases the country can use – limits that elected officials and energy magnates cannot easily want.

GE Vernova, the largest manufacturer of large gas turbines in the world, is among those bets that the recent burst of interest in the energy of the gas will last. The company, formed last year in the breaking of General Electric, is spending over 160 million dollars to review its gas turbine system on the edge of Greenville, SC

By the end of next year, the 1.5 million square foot factory should churn out about 35 % more than gas turbines. The building is a buzzing and reported expanse of partially automated assembly lines interspersed with components of the metal turbine.

“Other electrons will be created by the gas,” said Scott Strazik, CEO of GE Vernova, in a recent interview. “The appetite is very real.”

In this period of last year, the interest in natural gas data centers to feed the collected data centers, capturing much of the energy industry for the aforementioned.

Technological giants such as Microsoft and Google worked years ago to lower their emissions. But since it has become clearer as and how quickly their energy needs will grow, companies have turned to gas. If burned, natural gas produces carbon dioxide, the main cause of climate change. But gas systems can be built faster than nuclear power plants and work all day, unlike the energy of the wind and solar.

As the whirlwind sales went up, the waiting times and the prices were also. It takes about four months for GE Vernova to assemble the turbines used in the power plants. But that clock begins only after the company has received all the components, such as the dense metal fins that capture the hot air inside the turbine, causing the rotation of a rotor.

In these days, the backlog is so serious that it remembers the supply chains growled by the pandemic, which bound production of cars, medical devices and much more.

Between these delays and the time needed to build an power plant, a company that starts from scratch today would probably not have a new gas system that runs before 2030. Other critical electrical equipment such as transformers are also more difficult to obtain.

In comparison, a large solar project that includes batteries to store energy for use in the evening could reasonably be completed in three years, said Jesse Noffsinger, partner of the consultancy company McKinsey & Company.

Chris Wright, the energy secretary, said that the Trump administration encouraged electrical equipment suppliers to increase the US production capacity. In an interview, the possibility of invoking the Defense production deedWhich authorizes the president to extend loans and take other steps to encourage companies to produce critical equipment. President Trump used the law, issued in 1950, for Increases the production of things as fans during the pandemic.

Wright, who previously guided an oil and gas company, said that it expected that natural gas soon satisfied about half of the country’s electricity needs, compared to 43 % of last year. As for the wind and the sun, “they will continue to play a role,” said Wright. “But will they be the shoulders of an electrical network? Never.”

Mr. Wright is much more optimistic than other energy experts concerned the gas. Consulting companies such as McKinsey and Rystad Energy expect that the share of the US electricity market will remain relatively stable as renewable energy grows faster.

It is difficult to compare the cost of gas energy with that of solar panels or wind turbines and batteries. This is because it is not always sunny or windy, which means that other sources of power are sometimes necessary to integrate renewable energies. The costs of the gas also add up over time and can open during the crises, as they did after the invasion of Ukraine’s 2022 Russia. On the contrary, solar and wind parks cost relatively little to operate once built.

In general, the construction of a gas plant can now be as expensive as the installation of solar panels combined with batteries, according to Rystad, when they include tax credits that apply to renewable energies and storage. A big factor is that gas turbines now cost about 50 percent more than just 10 months ago, according to the Jefferies investment bank.

“We are in this strange land of no man in which it is very profitable to manage a plant and it is clear that we will need more electricity,” said McKinsey of gas plants. But in some markets, he added, it is not clear whether to build new ones will have a financial sense.

The legislators in Texas, who obtain about 30 percent of its electricity from renewable energies, have tried to guarantee the construction of gas systems. The Senate of the State has recently approved a bill aimed at ensuring that half of any new generation capacity comes from sources other than wind, solar and batteries. The house has not yet taken the account.

“My biggest concern is: how big is it? For how long?” Bill Newsom, CEO of another gas turbine manufacturer, Mitsubishi Power Americas, said of the current barrage of interest in gas. “I lose sleep every night.”

This year, 93 percent of the electricity capacity added to the US networks will be renewable energy and the storage of the batteries, According to the Energy Information Administration. The gas will represent only 7 percent.

S&P Global Commodity Insights recently estimated That by 2040, the United States should add at least nine times more renewable energy and batteries of the gas generation capacity to satisfy the new demand for electricity. This is partly due to the fact that many customers prefer renewable energy and various bottlenecks are slowing down the construction of gas plants.

But the forecasts vary widely, even in the coming years. The complicating issues is that utilities have often overrated power needs. From 2012 to 2023, utility planners overrated the electricity demand of 23 percent, on average, in their 10 -year forecasts, according to RMI, a non -profit research organization that aims to reduce emissions.

Joseph Dominguez, who manages the largest operator of the country’s nuclear power plant, is among those who question how big the boom in gas energy will be in the end. His company, Constellation Energy, has made an agreement of 16.4 billion dollars In January to buy Calpine, which has many gas plants.

“But this is a very different thing to say that I would have invested to replicate that fleet today,” said Dominguez. He pulled on a graph on his tablet showing how many scientists expect global temperatures to increase in the next decades. Last year was the hottest recorded.

“This world will beat rather ugly for its inhabitants and will guide radically different political results from those we are discussing today,” said Dominguez.