Global Gas Turbine Orders Surge 71% in Q2, Setting Record! Major Institutions Declare Gas Turbines Enter a 'Super Cycle'; Leading Manufacturers' Production Schedules Extend to 2030

According to Zhitong Finance APP, J.P. Morgan has stated that driven by a significant increase in electricity demand, global gas turbine orders set a new historical high in the April to June quarter. In a report released on Monday, J.P. Morgan analysts Phil Buller and others noted that global gas turbine orders reached approximately 38 GW in the second quarter of this year, up 29% from the first quarter and 71% year-on-year. The analysts pointed out that the United States remains the largest market, accounting for nearly half of the orders.

According to data from J.P. Morgan, Siemens Energy AG secured the largest volume of orders in the second quarter, at approximately 12.5 GW; followed by General Electric Co. with 11.3 GW; and Mitsubishi Power Ltd. ranked third with 5.3 GW. The bank's analysts added that growing demand is pushing up costs. The price of a combined cycle gas turbine unit scheduled for delivery in 2031 will be three times higher than that of units delivered last year.

The competition in artificial intelligence (AI) is extending from algorithms to the physical realm of electricity supply, with heavy-duty gas turbines becoming a strategic asset as coveted as chips by tech giants. In fact, the market for gas turbines has been booming under the impetus of AI for some time. According to US investment research institution Melius Research, gas turbine prices have risen by about 300% cumulatively over the past three years. Behind the price surge lies a severe structural mismatch between supply and demand.

On the demand side, power consumption by data centers is growing rapidly. The International Energy Agency (IEA) has warned that the global electricity consumption of data centers is expected to rise from approximately 415 billion kWh in 2024 to about 945 billion kWh in 2030, with their share of global electricity usage increasing from 1.5% to nearly 3%. From 2024 to 2030, the compound annual growth rate of data center electricity consumption will be about 15%, significantly higher than the overall societal electricity consumption growth rate.

Additionally, data from Morgan Stanley shows that the power shortage for US data centers has soared to 55 GW, forcing many computing power projects to be postponed due to grid access limitations. As a result, AI participants are increasingly acquiring “off-grid” solutions.

The reason gas turbines have become the “optimal solution” to fill this gap is due to their unique performance advantages. Unlike wind or solar power, which are intermittent, gas turbines can provide stable 24/7 scheduling and have peak regulation response times measured in milliseconds. They also offer the advantage of a short construction cycle, with production and operation possible within 12 to 18 months, making them well-suited for the rapid deployment needs of AI data centers.

However, while demand is expanding rapidly, the supply side of gas turbines is constrained by extremely high manufacturing barriers, resulting in severely lagging capacity expansion. U.S. AI data centers and the global energy transition are driving a surge in gas turbine demand, which is expected to exceed 100 GW worldwide in 2025 and potentially reach 117 GW in 2026. However, limited by high manufacturing barriers, supply is insufficient, and global gas turbine supply in 2025 will be only about 50-60 GW.

Against the backdrop of persistently tight supply and demand, the performance of industry leaders has confirmed the sector's prosperity. GE Vernova (GEV.US) reported first-quarter revenue of $9.339 billion, up 16% year-on-year; adjusted EBITDA was $896 million, nearly doubling from the same period last year. The company's management specifically emphasized on the earnings call that by the end of 2026, the company's gas turbine backlog is expected to reach 100 GW, and “the production capacity for 2029 and 2030 will also be nearly fully booked.”

Siemens Energy also reinforced the strong outlook for the gas turbine market in its earnings call, raising its forecast for annual gas turbine industry demand over the next few years to about 110-120 GW (previously 90-100 GW), and explicitly stating that they currently see no signs of demand slowing. The company highlighted that short delivery times are a scarce resource for data centers and hyperscale cloud operator projects, with shorter delivery times commanding higher premiums. It was also pointed out that current industry expansion is very rational, and increasing the production of industrial gas turbines cannot change the underlying supply-demand imbalance in the market.