The data center boom is worsening a “significant market imbalance” of gas turbines, suggesting the build-out of artificial intelligence infrastructure is about to get much more expensive, according to a new report.
The research firm Wood Mackenzie said Wednesday that the cost of gas turbines is expected to spike 195 percent above 2019 levels by the end of next year to $600 per kilowatt. That jump raises the risk of data centers increasing electricity prices further, despite pledges of large technology companies vowing to pay for their own power, analysts said.
“Gas turbines make up an estimated 20-30% of project costs for combined cycle [gas] projects, and even higher for simple cycle ones, making them by far the largest driver of gas plant costs,” Aurora Tenorio, senior supply chain analyst at Wood Mackenzie, said in a statement.
The current supply squeeze “will affect U.S. power investments well into the next decade,” she said.
