Cost of New Gas Power Plants Surges 66% as Data Center Demand Strains Turbine Supply Chain
April 29, 2026
Cost of New Gas Power Plants Surges 66% as Data Center Demand Strains Turbine Supply Chain
Explosive demand from the data center industry is driving a dramatic increase in the cost and construction time for new natural gas power plants, according to a new report from BloombergNEF. The findings underscore the growing tension between the rapid expansion of AI and cloud computing infrastructure and the limited capacity of the global power generation supply chain.
The report reveals that the cost of building a new combined-cycle gas turbine (CCGT) plant has risen from less than $1,500 per kilowatt of generating capacity in 2023 to $2,157 in 2025—a 66 percent jump in just two years. At the same time, the lead time for bringing a new facility online has increased by an average of 23 percent, as developers face longer waits for critical equipment and components.
Data center operators, under pressure from the Trump administration to secure their own power sources, are increasingly pursuing “bring your own power” strategies, which has placed unprecedented strain on the gas turbine manufacturing sector. The report notes that prices for equipment used in new gas plants are now expected to be more than 195 percent higher than in 2019. The manufacturing base for large gas turbines is highly concentrated and constrained, and last year, producers were reported to be seriously struggling to keep up with demand, with delivery backlogs beginning to stretch past 2029.
Despite the soaring costs, data center developers have not been deterred from pursuing gas-fired power for their operations. Notable recent deals include commitments from Microsoft and Meta to offtake significant amounts of capacity from natural gas plants to power their data centers. The demand for dispatchable gas power has also attracted new entrants to the market offering more modular solutions. In a prominent example from last December, Crusoe signed a deal with Boom Supersonic to purchase 1.21 GW of the company’s Superpower turbines—a 42 MW natural gas turbine supplied in a shipping container-scale unit.
The surge in costs and extended lead times highlight a critical bottleneck for the data center industry as it races to secure reliable, around-the-clock power for AI workloads. With turbine delivery slots booked years in advance and prices continuing to climb, the ability to scale new data center capacity may increasingly depend on how quickly the power generation supply chain can respond.
Source: datacenterdynamics
