U.S. electricity consumption is on the rise, in part due to new data centers gobbling up electrons. How to meet rising demand is the million dollar question with billion dollar solutions, like building new natural gas power plants.
Natural gas power is relatively cheap, cleaner than coal and it can generate power all day and all night, unlike wind and solar. But it’s got a supply chain problem.
There’s a bit of a scramble right now to get the supplies needed to keep the lights on as demand for electricity goes up, said Ramteen Sioshansi, an electrical engineering professor at Carnegie Mellon University.
Take natural gas turbines, which are in relatively short supply:
“Suppliers have fairly lengthy backlogs to be able to get those components to utilities and others who are building electricity infrastructure,” Sioshansi said.
So why can’t manufacturers just ramp up production of gas turbines?
“These are big industrial machines, right? So you need big, heavy forging and casting components. You need really skilled labor,” said Sam Huntington, director of Climate & Sustainability: North American Power at S&P Global Commodity Insights.
Plus, turbines require a lot of specialty materials and manufacturers are hesitant to make a big investment in ramping up production when there could be an overcount of how much electricity data centers will need.
“There's just a ton of uncertainty about the sort of range of projections of how much load growth could we actually see,” Huntington said.
He said the wait for some natural gas turbines is four years.
And the limited supply of turbines, which are a critical component to a natural gas plant, can add challenges and delays to these energy projects, said Tom Mergen, a vice president and Central/East U.S. business development lead at Stanley Consultants.
“It is difficult to get equipment,” he said. “There's definitely a race to get your orders in now.”
Mergen said projects will place turbine orders early on if they can. “But there's some risk in that, right? You're going to be starting to order equipment before you've done the environmental due diligence,” he said.
And it’s getting worse. It’s not just the gas turbines for big power plants that are in high demand.
“Now you've got the market kind of converging that the demand is for any type of technology, and pretty much any size is in high demand,” Mergen said.
It’s another headache for project managers who are also dealing with governmental red tape, while a bunch of natural gas plants are coming through the pipeline at the same time.
