Wood Mackenzie Sees Gas Turbine Prices Tripling by 2027 as AI Data Centers Strain Global Supply
With annual global production around 20 GW, turbine scarcity is tightening fast for utilities and hyperscalers competing for the same equipment.
Wood Mackenzie has forecast that gas turbine prices will reach $600 per kilowatt by end-2027, a 195% increase from 2019 levels, a trajectory already reshaping procurement strategy across the US power sector as artificial intelligence data center demand compounds existing competition for scarce manufacturing capacity.6
GE Vernova's total annual global turbine output, covering every customer on the planet, amounts to roughly 20 gigawatts. Only about a fifth of the gigawatts already under contract are earmarked for data centers; the rest goes to coal retirement projects, Middle East power and desalination, industrial load, and baseline grid reliability work. The supply math limits how fast any single buyer can move.6
American Electric Power has moved faster than most. Chief executive Bill Fehrman told analysts on Thursday (2026-07-30) that AEP had secured 3 GW of turbine capacity during the second quarter, lifting its total contracted supply deployable by 2031 to approximately 13 GW. The utility has also exercised options on an additional 10 GW by 2035, timing that Chief Operating Officer Trevor Mihalik said dovetails with planned retirements of aging coal and gas units across AEP's vertically integrated service territories.3
PJM, which serves more than a dozen states across the mid-Atlantic and Midwest, approved a large tranche of new generation in its latest interconnection queue cycle, Canary Media reported on Monday (2026-08-24). But approval and construction are different things. Researcher Silverman found that developers interviewed for a 2024 PJM interconnection report had "effectively suspended all permitting and siting work and all equipment procurement work" during the extended queue backlog, leaving projects now competing for turbine slots from a standing start at the worst point in the equipment price cycle in decades.8
Congressional pressure is building in parallel. Republicans and Democrats have both begun pushing back against hyperscalers developing large-scale data center complexes near existing grid infrastructure, Oilprice.com reported on Sunday (2026-08-23), citing demand growth that outpaces what current transmission and generation capacity can support. Private equity firms are circling utility assets, drawn by the power demand signal from AI investment.7
The gas demand picture reinforces the urgency. Atlantic Council analysis found that a 4-to-6 gigawatt data center cluster would consume roughly 1 billion cubic feet per day of natural gas, depending on turbine efficiency — a figure that scales sharply if even a fraction of the planned project pipeline is realized. Analyst Matt Smith has separately forecast that US natural gas storage could be exhausted by 2030 as data center load growth and LNG export volumes drain available supply simultaneously.1,4
NYMEX Henry Hub front-month settled at $2.89 per MMBtu at Friday (2026-08-28)'s close, a price low enough to send no urgent upstream investment signal. If storage tightens at Smith's projected pace, the gap between current pricing and a level sufficient to incentivize new supply could close faster than drillers are positioned to fill.4
FERC's regulatory calendar adds another variable. Maryland's utility agencies filed a complaint in late June (week of 2026-06-29) asking FERC to remove the 0.5% return-on-equity adder that Exelon, FirstEnergy, and a NextEra subsidiary earn for voluntary PJM membership. Jefferies equity analysts wrote in a note on Monday (2026-07-06) that the challenge would likely succeed, citing precedent from California and Ohio. Transmission costs already represent roughly 15% of a typical residential electricity bill; stripping the adder could reduce the incentive for transmission investment in PJM at a moment when the grid requires more capacity.2
A FERC ruling issued in July (2026-07) ordered PJM to open its wholesale markets to virtual power plants, allowing demand-response aggregations to compete alongside conventional generation, Canary Media reported. VPPs could relieve some peak demand pressure, but their aggregate contribution remains small against the load growth that large-scale AI deployments represent.5
What the turbine order books show is that utilities with long procurement horizons are best positioned. AEP has secured 23 GW of rights across contracts and options through 2035. Most counterparties in the market are working from a much shorter runway. Wood Mackenzie's price trajectory means anyone still negotiating supply agreements will pay substantially more by the time 2027 arrives, and the binding constraint is the manufacturing line itself, not financing or permitting.6,3