The energy sector is witnessing a seismic shift as gas power stages a dramatic comeback, driven by soaring electricity demand and the urgent need for reliable generation. This resurgence, however, is unfolding against a backdrop of supply chain constraints and strategic realignments that could reshape the industry’s future.
For years, gas power was consigned to the sidelines, overshadowed by the rise of renewables and the push for decarbonization. But the tide has turned. “Gas turbines were dead in 2022–2023,” Richard Voorberg, president of Siemens Energy North America, remarked at POWERGEN International. “Look at where we are today. We’re ramping up our capacity, we’re trying to produce more and more gas turbines. And frankly, we can’t make enough gas turbines to support this market.”
The reversal of gas power’s fortunes is not merely a blip but a response to fundamental shifts in the energy landscape. Gas has long been recognized as a bridge resource, providing the dispatchable power needed to support the integration of intermittent renewables and replace aging coal and oil generation. The global supply shocks of 2022–2023, coupled with surging industrial demand, have underscored the urgency of supply security and infrastructure expansion. Meanwhile, reliability concerns, exacerbated by extreme weather events and regulatory hurdles, have highlighted the need for a more robust and flexible generation mix.
The scale and speed of this shift have been propelled by the rapid rise in electricity demand, driven by AI-driven data centers and other large industrial loads. PJM Interconnection, the largest grid operator in the U.S., recently raised its long-term load forecast, anticipating a dramatic 70 GW increase in summer peak demand over the next 15 years. Similarly, the Electric Reliability Council of Texas (ERCOT) projects a significant surge in summer peak demand, driven by a load increase from cryptomining, data centers, hydrogen production, and industrial needs.
This demand surge is already testing the limits of the supply chain. While energy-focused data analytics firm Enverus projects 46 GW of new gas-fired power will come online over the next five years, actual capacity in the pipeline may be significantly higher. Utilities are indicating a demand for new gas capacity, primarily for peaking power and firming capacity, rather than continuous baseload generation. Many are also considering gas power fleet optimization and modernization.
However, manufacturers are struggling to keep pace. “Right now, it’s years out—2029, 2030 before you can expect to have a new build ready to go,” said Bobby Noble, senior program manager for Gas Turbine Research and Development at EPRI. “We’re looking at a five-year-plus wait for new installs.” Original equipment manufacturers (OEMs) are facing competition for key components, particularly for aeroderivative turbines, which are in high demand for peaking power.
All three major OEMs—GE Vernova, Siemens Energy, and Mitsubishi Power—have reported record backlogs. GE Vernova, for instance, has seen a significant increase in orders, with a backlog that has grown from $6 billion two years ago to $20 billion today. The company is ramping up production to meet demand, but even so, it expects to remain at a production ceiling of roughly 20 GW annually by 2027.
Siemens Energy, meanwhile, is fielding a record order backlog of €131 billion. The company is expanding its manufacturing capacity across multiple global sites and strengthening its presence in high-growth regions, such as Saudi Arabia.
This gas power resurgence is not without its challenges. The supply crunch is forcing utilities to adopt urgent procurement strategies, strategic collaborations, and a rethink of long-term generation planning. The industry must also grapple with the environmental implications of increased gas power generation, even as it provides a necessary bridge to a more sustainable energy future.
The political backing, private sector urgency, and increased infrastructure investment in gas power signal a significant shift in the energy sector’s priorities. As Larry Fink, BlackRock Co-Founder, Chairman, and CEO, noted at the CERAWeek by S&P Global conference, “About four years ago, they would say, if we’re building a data center, it must be renewables. And about two years ago, they said, we preferred renewables. And today, they care about power.”
This shift is likely to spark debate and challenge norms within the energy sector. As the industry navigates this new landscape, it will be crucial to balance the need for reliable, dispatchable power with the long-term goals of decarbonization and sustainability. The gas power resurgence is a reminder that the energy transition is complex and multifaceted, requiring a nuanced approach that acknowledges the realities
