News
US gas plant construction costs rise as production slots sell out through 2030
Thursday, February 12, 2026 at 09:46 AM
Broker reports indicate that US pricing power for combined cycle gas plants remains high, with construction costs approaching $3,000 per kilowatt and production capacity sold out through 2030.
Context
Construction costs for combined cycle gas plants are surging toward $3,000/kW as AI data center demand outpaces utility supply. Market leaders GE Vernova and Siemens are exerting massive pricing power, with turbine production slots now sold out through 2030. This capacity crunch creates a critical bottleneck: while chip production scales, the physical inability to secure baseload power is becoming the primary constraint for AI infrastructure deployment.
The multi-year backlogs at GE Vernova and Siemens signal a shift where power equipment OEMs are now the gatekeepers of tech growth. This $3,000/kW cost level reflects a scarcity premium that ensures revenue visibility through the end of the decade. For the broader AI sector, these rising costs and decade-long lead times mean the all-in expense of scaling GPUs is increasing as hyperscalers compete for limited power generation assets.
Related Companies
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GE Vernova
GEV
Siemens
SIE