Driven by increased electrification demand, especially around the expansion of data centers, the gas turbine market faces a significant market imbalance that will see prices surge through 2027, according to a new report from Wood Mackenzie.
According to the report, "The U.S. gas turbine market: navigating manufacturing scarcity and demand growth", global orders sat at 110 gigawatts (GW) at the end of 2025, but global manufacturing capacity is only capable of 60-70 GW.
This has pushed prices to new highs, with the market anticipated to reach $600/kW by end-2027—a 195% increase since 2019, Wood Mackenzie said.
"Gas turbines make up an estimated 20 – 30% of project costs for combined cycle projects, and even higher for simple cycle ones, making them by far the largest driver of gas plant costs," said Aurora Tenorio, senior analyst, Supply Chain at Wood Mackenzie. "This supply constraint, compounded by six-year lead times and order books sold through 2027, has fundamentally shifted the market from fuel-economics-driven decisions to procurement-strategy-driven project viability."
Turbine orders are expected to peak in 2026 as developers attempt to secure equipment for 63 GW of gas capacity additions from 2026 to 2030.
Data centers driving unprecedented demand shift
Data center expansion has emerged as the dominant force reshaping the gas turbine market, representing a fundamental shift in customer composition as AI workloads drive power requirements to unprecedented levels, Wood Mackenzie said.
Wood Mackenzie forecasts data center electricity consumption will increase 96% between 2026 and 2031, with AI and cloud expansion becoming the fastest-growing source of new load on the U.S. grid.
This demand surge is exemplified by major projects such as SB Energy's Portsmouth Powered Land Project, a $33 billion, 9.2-GW natural gas-fired facility unveiled in February 2026. The project alone could require between 24 and 30 heavy-duty gas turbines for its initial build-out, "underscoring the scale of capacity needed to meet America's surging electricity demand," Wood Mackenzie said.
Original equipment manufacturers are investing heavily to address supply constraints but face significant challenges. GE Vernova is spending over US$160 million to increase production from approximately 50 large-frame turbines annually to 70–80 units by late 2026, Wood Mackenzie noted.
Siemens Energy has transitioned key facilities to 24/7 operations and announced a $1 billion U.S. investment program, while Mitsubishi Heavy Industries plans to double its manufacturing capacity through 2028.
"Despite the rush in demand for product, the market is also hampered by specialized labor shortages, component bottlenecks in hot-section manufacturing, and ongoing trade-related cost pressures that will continue to limit production throughput improvements," said Tenorio. "This has all compounded the issue and will affect US power investments well into the next decade."
"Hot-section component manufacturing—particularly single-crystal blade production—remains the industry's critical bottleneck, as these precision processes can only be performed at scale by a handful of global suppliers," Wood Mackenzie said.
