My notes on recent developments in AI-related energy markets, in particular with respect to the re-rise of gas turbines, in part based on a recent S&P discussion.
What’s Happening
AI has flipped the global gas-turbine market from slack to locked-in:
- Lead times: Now 5–7 years for large turbines.
- Order books: OEMs (Mitsubishi, GE, Siemens) say they are fully committed to ~2030–2032.
- Prices: Turbine costs are up 2x in some categories.
- Driver: AI/data centers projected to take ~12% of U.S. power demand by 2028 vs ~4% in 2023.
- Customer mix: Hyperscalers are crowding out utilities and emerging-market buyers for the same hardware.
The key point: this is forward-committed demand—capacity pre-sold years ahead based on today’s AI-energy nexus narrative.
Why It Matters
This “locked-in” status is a risk amplifier.