The demand for electricity at AI data centers is rapidly increasing, leading to a growing shortage of essential power generation equipment such as gas turbines. As the delivery times for new machines extend, numerous utility companies, developers, and data center operators are actively scouring the globe for secondhand or refurbished gas turbines. They are even reactivating idle equipment and retrofitting decommissioned aircraft engines into power generation systems. Experts caution that the availability of used equipment is limited and carries inherent risks including shorter lifespan, opaque maintenance records, and emissions exceeding allowable limits.
According to recent reports, analysts from Jefferies, an investment bank, estimate that the demand for gas turbines within U.S. data centers alone is nearing 17 gigawatts this year, with projections suggesting it could rise to over 51 gigawatts by 2028. Jefferies further hypothesizes that by 2028, the global manufacturing capacity for gas turbines may reach around 87 gigawatts, yet this would still fall short of the anticipated demand of 129 gigawatts for that year.
Data from the energy consultancy firm Wood Mackenzie indicates that current global orders for gas turbines have exceeded 100 gigawatts, far surpassing the annual manufacturing capacity of approximately 60 to 70 gigawatts. Aurora Tenorio, a senior analyst at the firm, pointed out that the average delivery time for gas turbines in the United States currently stands at about six years.
Key market players such as Siemens Energy, GE Vernova, and Mitsubishi Heavy Industries have all reported that orders driven by AI are surpassing their production capabilities. In light of the pressure from delivery timelines and escalating costs, some developers are turning to the secondhand equipment market. The CEO of EthosEnergy, Ana Amicarella, remarked, “The secondary market is exceptionally vibrant right now, and we are seeing bids from buyers continuously climbing.”
Darayus Pardivala, head of the U.S. aftermarket business for Sulzer, noted that the company receives inquiries every few weeks from clients looking for secondhand gas turbines suitable for data centers.
In addition to significantly reducing delivery times, price is another critical consideration. Zach Machuca, a managing partner at Origin Partners, which assists data center developers in procuring power equipment, stated that well-maintained secondhand turbine sets are priced around $1.5 million to $1.7 million per megawatt, compared to refurbished units at approximately $1.3 million. According to data from Aurora Energy Research, a brand-new gas turbine costs roughly $2 million to $2.5 million per megawatt.
Given the limited supply and higher pricing of larger units, several developers are also opting for smaller turbines. Dan Poole, managing director of the platform ReflowX, mentioned that two 14.5 megawatt gas turbines manufactured by Solar Turbines, a Caterpillar subsidiary, were recently sold for $12.5 million, equating to around $430,000 per megawatt. He explained that purchasing new machines would require about five years for delivery at an estimated cost of $35 million.
Scott Schreeg, sales director at U.S. equipment supplier SVI Bremco, indicated that many projects are now deploying over 100 small units at a single site due to the unavailability of larger turbines, mixing various brands and models.
Other companies are also innovating by introducing converted or aviation engine-based power generation equipment. Crusoe, an American AI infrastructure company, placed an order in April for 13 gas turbines based on GE aviation engine technology from ProEnergy, with a total capacity of 650 megawatts, designated for its AI data center projects in the United States.
Additionally, Boom Supersonic, a startup focusing on supersonic passenger aircraft, has launched a 42-megawatt gas turbine named Superpower, which utilizes technology from its supersonic jet engines, aiming for the AI data center market. The initial customer delivery goal is set for mid-2027.
However, Noor Qureshi of Enverus Intelligence Research pointed out that the global supply of secondhand equipment is quite limited, making it unlikely for delivery times to shorten drastically. She emphasized that gas turbines represent just one challenge; factors such as air emissions permits and grid access can also contribute to delivery delays.
Tenorio further warned that overhauled gas turbines may come with issues such as unclear maintenance histories, limited remaining lifespan, and inadequate long-term after-sales service. The reliability of power generation equipment retrofitted from aircraft engines for sustained operations also remains to be seen.