AI Takes One-Fifth of the Turbine Queue. PJM Is Still 7 GW Short.
Gas turbine supply was already allocated to utilities, Middle East projects and industrial buyers, yet PJM still came 6,831 MW short of its own reliability requirement.
GE Vernova produces roughly 20 GW of gas turbines per year across all customers worldwide. Data centers hold about one-fifth of that contracted capacity. The rest is allocated to utilities replacing coal capacity, Middle East power and desalination projects, industrial buyers and grid reliability programs — all of them in the queue before the first AI campus broke ground.4
The data center share sets a ceiling on how much AI can account for the global turbine shortage. Utilities, Middle East clients and industrial customers were absorbing the bulk of Vernova's output before hyperscalers arrived, and those contracts did not disappear when data center orders started coming in. The competition for turbine slots is system-wide.4
PJM's most recent capacity auction illustrated what that system-wide pressure means for grid reliability. The largest wholesale power market in the United States procured 138,318 MW of unforced capacity and still finished 6,831 MW below its own reliability requirement. New generation and uprates that cleared: 525 MW. The grid operator paid the maximum price its rules allow and attracted roughly half a gigawatt of new supply in return.4
That outcome has pushed PJM to propose a one-time Reliability Backstop Procurement targeting roughly 14.9 GW of new capacity, split between bilateral contracts beginning in September 2026 and a pay-as-bid auction scheduled for March 2027. Closing that gap depends on a turbine supply chain that is already under pressure from every direction.4
NYMEX Henry Hub front-month stood at $2.77/MMBtu on Sunday (2026-08-23). That price reflects current US storage rather than the cost of expanding generation capacity. Wood Mackenzie expects gas turbine prices to reach $600/kW by end 2027, a 195% jump from 2019 levels. Equipment orders placed in the first half of 2026 were priced more than 20% above fourth-quarter 2025 levels, a single-quarter escalation that shows manufacturers are capturing the scarcity premium.4
GE Vernova's balance sheet confirms that buyers are paying to secure delivery positions ahead of need. The company's second-quarter 2026 free cash flow reached $5.1 billion, supported by a $6.4 billion working capital benefit from customer down payments tied to turbine slot reservations. Cash paid upfront for positions that have not yet entered the production schedule is a proxy for how tight the queue has become.4
Regulatory delays are stacking on top of the equipment bottleneck. FERC on Thursday (2026-07-02) rejected a waiver request from Advanced Power Services for its roughly $2 billion Chestnut Run gas-fired project, enrolled in PJM's Reliability Resource Initiative, a process designed specifically for shovel-ready capacity. Advanced Power had sought to substitute a GE Vernova HA.02 turbine model that would reduce the plant's maximum output by about 550 MW but keep the delivery date close to the original. PJM opposed the request. FERC agreed. The RRI initially drew 51 projects totaling about 11.8 GW; the Chestnut Run decision shows that switching turbine models to manage lead times can itself become a point of regulatory failure.2,3
Big Tech has been dispatching representatives to FERC to ensure officials understand what one anonymous AI company executive, quoted by POLITICO, described as "the unique dynamics surrounding AI-level growth." FERC has regulated the same category of utilities and generators for a century. But independent power producers were making the same arguments about interconnection reform before hyperscalers entered the room, and they were not winning.1
NextEra Energy has announced $33 billion in planned gas-fired capacity in Pennsylvania and Texas. That capital faces the same turbine queue, the same interconnection rules and the same FERC standards that blocked Chestnut Run. Scale joins the bottleneck; it does not bypass it.1,2
PJM's bilateral contracting round begins in September 2026; the pay-as-bid auction follows in March 2027. Both will test whether developers can commit to near-term delivery given current turbine lead times and costs. A shortfall in the March auction, or another round of capacity clearing at the price ceiling with minimal new supply, would suggest the problem runs deeper than the current AI narrative accounts for.4