If you’ve been following the story so far, with the rise of the second Trump administration, renewable energy is out, fossil fuels are back, in particular fossil gas, personified by the selection of fracking millionaire Chris Wright as Secretary of Energy.
The demands of new data centers and AI, we are told, make “reliable” gas turbines the only choice in the near term, followed by “new” modular nuclear in the 2030s.
Possible glitch in the Matrix is that, gas turbines are hard to build, and the supply chain is backed up quite a bit. There has been some pushback on that narrative lately, but a little history and perspective help.
Gas executives faced the ire of climate activists when they called gas a “bridge” from coal to clean power. With the rapidly growing demand for power, these executives now think gas will be central to the future.
The turbine shortage risks exacerbating a major divergence in climate efforts between poor and rich nations. Without gas, developing economies may be forced to keep using coal for longer, threatening plans to reduce emissions. Meanwhile, developed countries may be pushed to more quickly adopt solar and wind farms backed up with expensive batteries.
John Ketchum, chief executive officer of NextEra Energy Inc., the biggest US solar and wind developer, said clean energy should be a “critical bridge” until gas plants can be built.
Suppliers of turbines have been caught flat footed by the resulting acceleration in orders. In the US, natural gas fuel accounted for about 40% of electricity generation. President Donald Trump’s policy moves against renewable energy, in addition to the proliferation of data centers and a thirst for more power, are expected to strengthen its role.
The market is tight, said Scott Strazik, chief executive officer of GE Vernova. “There’s such a thirst for power right now,” he said.
The crux of the bottleneck is that there are only three major suppliers for the largest turbines used in power plants across a handful of factories from Germany to Japan, and they aren’t able—or willing—to increase production capacity fast enough to meet rapid demand.
GE Vernova is already in talks with customers about fulfilling turbine orders as far out as 2030. Mitsubishi Heavy plans to quickly double its gas turbine capacity, but has most slots booked for 2027 and 2028. Siemens Energy declined to give specific timelines on its orderbook, but said turbines are only one of many things needed to build a gas power plant.
“It’s not so easy to ramp up,” Joern Schmuecker, Siemens Energy’s senior vice president of gas service, said in an interview. “The whole supply chain is struggling to also keep pace.”
The technology’s deployment surged in the 1990s with the US power market’s deregulation. Gas turbines were favored for their speed of installation and efficiency, triggering a rush in orders.
Yet that boom was short-lived as gas prices climbed and the resulting downturn triggered a wave of industry consolidation that concentrated manufacturing capability with the current three main suppliers. The experience also left companies wary of being too aggressive in expanding capacity.
With the growth of AI data centers, there’s been a lot of talk about America’s pivot to natural gas power.
But renewables continue to dominate the US power sector. 93% of capacity built in the last 12 months came from solar, wind and batteries.
There are certainly more planned gas projects now than there were a few years ago. But media headlines would mislead you on the scale of the change.
There is currently 8.9 GW of gas capacity under construction, compared to 7.5 GW three years ago when ChatGPT launched.
Total gas capacity across all stages of development has roughly doubled in the last two years.
But it’s still about half what it was a decade ago—and it’s been flat since the beginning of this year.
Since ChatGPT launched, the US has gone from adding 12.7 GW to 31 GW of utility-scale solar capacity per year—244% growth.
We’ve gone from 4.8 GW to 13.6 GW of battery storage capacity per year—283% growth
So, yes, America is building more gas power than it was a few years ago. But fossil fuel power remains the sideshow.
The main story is the growth of renewables and storage. And that doesn’t appear to be changing anytime soon.
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Not mentioned in the Bloomberg piece above, a misreading of the demand for gas turbines contributed to a crisis for General Electric, a leading manufacturer of turbines at the time, and a legendary juggernaut of US business.
A search of “2017 GE bankruptcy gas turbines” yields this from Google AI.
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AI Overview
General Electric (GE) did not declare bankruptcy in 2017, but its power division, heavily reliant on gas turbines, experienced a major financial downturn that year. This crisis was a primary factor in the company’s subsequent restructuring and significant stock price collapse.
Key events related to GE’s gas turbine business and overall financial situation in 2017:
- Collapse in Demand: Global demand for gas turbines unexpectedly and sharply declined in 2017, a shift GE and its competitors largely failed to anticipate. The rise of cheaper and faster-growing renewable energy sources (wind and solar) made utilities less interested in large, long-term gas plant investments.
- Financial Misjudgment: GE had previously invested heavily in its power business, including the $13 billion acquisition of Alstom’s power assets in 2015, a bet on continued gas generation growth that proved ill-timed.
- Poor Performance: The Power division’s performance deteriorated significantly throughout 2017. What CEO Jeff Immelt described as “very positive” in May, quickly turned negative by Q3, with profits and orders falling.
- Management Change and Restructuring: The financial woes led to the early retirement of CEO Jeff Immelt in mid-2017, replaced by John Flannery. In November 2017, GE announced a broad restructuring plan and halved its dividend to conserve cash.
- Job Cuts: In December 2017, GE announced it would cut 12,000 jobs within its power business globally to address overcapacity and costs.
- Stock Plunge: GE’s stock price fell dramatically throughout 2017, ultimately losing about 45% of its value that year.
So keep all this in mind when people talk about the imminent and inevitable explosion of gas generation. This model is what Frack Gas Grifter energy Secretary Chris Wright is counting on in his drive to lock the world into the energy paradigm that made him wealthy.
But it just might not be so.
for all his talk about solar, Musk has been using DOZENS of gas turbines to power xAI datacenters
How many times we gotta fucking say this:
GAS IS AS BAD AS COAL FOR CLIMATE!
GAS IS AS BAD AS COAL FOR CLIMATE!
GAS IS AS BAD AS COAL FOR CLIMATE!