Gas Turbine Supply Crunch Pushes Power Plant Construction Costs to Multi-Year Highs

Gas Turbine Supply Crunch Pushes Power Plant Construction Costs to Multi-Year Highs

Gas turbine prices are projected to rise to $600/kW by the end of 2027, a 195% increase since 2019, according to an April report from Wood Mackenzie cited by Utility Dive. Orders are expected to peak this year as developers race to secure equipment for 63 gigawatts of planned gas capacity additions between 2026 and 2030, driven largely by data center electricity demand that Wood Mackenzie expects to grow 96% between 2026 and 2031.

Wood Mackenzie identifies hot-section component manufacturing, particularly single-crystal turbine blade production, as the industry’s critical bottleneck, since that precision work can only be performed at scale by a handful of global suppliers. Bobby Noble, a senior program manager at the Electric Power Research Institute, told Utility Dive that restricted shipping through the Strait of Hormuz is also likely to affect the price and availability of turbine components.

Delivery times have stretched significantly alongside the price increases. A large turbine ordered today would take about five years to deliver, while a smaller turbine would take between 18 and 36 months, according to Noble. Even with the backlog, developers continue pursuing large gas projects: Entergy Louisiana struck a deal in March to power Meta’s Hyperion data center with seven new gas-fired, combined-cycle plants totaling 5.2 gigawatts. Entergy said long-term agreements with equipment manufacturers, locked in when it entered the order queue, along with diversified sourcing and early procurement, are helping it manage the supply constraints.

What It Means for Subcontractors

• E&I and mechanical subs bidding gas-fired power plant work should build extended equipment lead times into project schedules now — five years for large turbines means FID-to-commissioning timelines are lengthening across the board, not just on paper.
• Subs specializing in smaller turbine installations (under 100 MW, which made up 70% of last year’s orders per EPRI) face comparatively shorter 18-to-36-month lead times and may find more near-term mobilization opportunities than crews chasing large-frame turbine projects.
• Developers with pre-negotiated, locked-in equipment pricing (like Entergy’s approach) are more likely to proceed on schedule; subs should prioritize relationships with operators who secured turbine orders early, since their projects carry less risk of delay or cancellation from cost overruns.
• Expect owners to increasingly split scope between smaller modular turbine packages to work around the large-turbine bottleneck, which may create more, smaller commissioning and E&I subcontracts rather than fewer large ones.