Set to boost capacity by at least 30 percent
Japanese engineering and electrical manufacturing giant Mitsubishi Heavy Industries (MHI) plans to double its gas turbine production capacity over the next two years in response to surging demand, particularly from the data center market.
According to Bloomberg, the manufacturer has seen orders multiply in magnitude, in part due to many turbines that were installed decades ago reaching the end of their operational life, its CEO, Eisaku Ito, said in an interview.
“We were working toward boosting production capacity by 30 percent, but that’s not enough to meet growing demand,” Ito said. “Fulfilling those orders is our top priority.”
Demand has increased significantly due to the growth of the data center market, with both utilities and data center developers seeking natural gas turbines to increase dispatchable capacity. This growth in demand led to warnings of a turbine supply shortage, with reports that manufacturers were facing delivery backlogs that stretched into the 2030s.
To alleviate this pressure, it was reported that major turbine manufacturers had begun to limit investments to protect their margins and avoid overexposure if the expected growth in data center capacity failed to materialize.
Reflecting on the planned expansion, Ito stated that the company is working to increase output by improving the efficiency of its production chain, despite facing increased manufacturing costs, which have nearly doubled over the past few years.
While the company will focus on rapid expansion, it will do so carefully, said Ito, due to prevailing concerns that projected demand may fail to materialize. “The goal is to be as lean as possible,” even though demand should remain strong over the next decade, Ito added.
MHI is one of the three largest manufacturers of natural gas turbines. Alongside GE Vernova and Siemens, it produces the majority of the world's gas turbines globally.
Natural gas has become the go-to option for data centers seeking to expedite their route to market, offering fast, dispatchable power within shorter timeframes.
For example, in July, AI data center developer Crusoe confirmed an order for approximately 1GW of natural gas turbines to power its data centers from GE Vernova. Crusoe is developing a large campus in Abilene, Texas, for OpenAI’s Stargate project. Part of that site is set to be powered by natural gas.
Source: DCD
