26 27 Unattributed quote The need for reliable base load power has seen a return to gas-powered generation around the key gas hubs of Texas and Louisiana, with Entergy adding 2.2GW of gas plants for Meta’s Louisiana Hyperion campus, planned to scale up to 5GW, and with Open AI/Soft Bank’s Stargate project in Texas expected to rely mainly on gas. As a result, after demand for gas turbines collapsed from 400 units per year to 110 units after the 2011 dash to switch from coal to gas in the US, this year global orders have shot up to 1,025 units, with 46% of sales to the US vs 29% historically. Large unit orders have increased 50% vs the 10-year average. Manufacturing is concentrated around three main suppliers. GE Vernova and Mitsubishi Heavy Industries, who have seen orders almost double from 40GW (2021- Gas bounces back 2023) to 70GW (2024-2026), and Siemens, who recently quoted US orders jumping from one unit years ago to closer to 200 today! Most order books are now full for the next five years with delivery times as long as seven years. Investment in the research and design of gas turbines by the “big three” has seen efficiency improve by 64%. China has recognized it cannot catch up with this technology, so has focused on renewables and in the short term has filled its base load gap with coal, which is why China’s share of gas in power will remain no more than 3%. The bottlenecks in supply are significantly impacting Asia (and consequently the demand for LNG). The cost of gas turbines has tripled over the last few years and, with the high cost of LNG (peaking at $75/mmbtu), has seen the levelized cost of electricity from gas increase, forcing emerging economies to rethink their energy strategies as China has flooded the market with cheap renewables. Vietnam will miss its 2030 target of increasing its gas generated power from 1.6GW to 22.3GW, with just one project having secured a gas turbine. In the need to fill the energy gap renewables may leapfrog gas. Building Infrastructure at Scale and Pace 27 With the US pivoting to the need for firm, scalable power sources to meet data center demand, existing nuclear plants, able to provide clean dispatchable energy, have seen a revival. Microsoft signed a 20-year power purchase agreement (PPA) with Constellation Energy to restart the 835 MW Three Mile Island Unit 1 reactor (renamed Crane Clean Energy Center), supplying carbon- free power to data centers in the PJM region by 2027. Talen Energy signed a PPA to supply power from the Susquehanna Nuclear Power plant to AWS’ 960MW Pennsylvania data center campus. Firm nuclear agreements remain limited to the extension or restart of existing plants. New nuclear technologies remain expensive, uncommercialized, and take years to develop, with very few reactors added to US grids this century. Nuclear renaissance However, California-based Deep Fission has signed nonbinding agreements to supply 12.5 GW of nuclear power—equivalent to more than 12 traditional reactors— mainly to data centers, amid rising demand for carbon- free energy. At the same time, technology firms are placing their bets in SMR technology. Amazon has partnered with X-energy to deploy Xe-100 small modular reactors (SMRs) near AWS data centers in Washington State. Each unit produces 80 MW, and Amazon aims to support up to 5 GW of nuclear capacity by 2039 through a $50 bn investment plan. Google is collaborating with Kairos Power to build seven SMRs delivering up to 500 MW by 2035, with the first unit expected online by 2030. Fusion technology is also gaining pace, with 42 private companies now in a race to deliver stable energy without the generation of nuclear waste. The Tennessee Valley Authority (TVA) is planning to start construction of Type One Energy’s stellarator fusion technology at the retired Bull Run coal plant by 2028. Sceptics still claim that the technology remains decades away. With the delay in the availability of turbines into the next decade, some see this as giving time for emerging technologies such as SMR, fusion and geothermal to catch up, adding to the growing uncertainty in the fuels mix beyond 2030. Unattributed quote If we don’t change our approach to electricity pricing, the price of electricity will become what gasoline once was — the metric everyone knows, the issue every politician runs on. And if we’re not careful, that backlash will come fast. We are seeing convergence of all energies — oil, gas, electricity — it’s no longer separate. We are building gigawatts of gas and renewables side by side. The only way to provide power for data centers is to combine both.