INTERVIEW: Mitsubishi Power gas turbine orders stretch to 2030 amid AI, security demand

The global gas turbine industry is experiencing unprecedented demand that has stretched delivery times to five years, filling order books through 2030, driven by artificial intelligence infrastructure, energy security concerns and the need for flexible capacity to balance renewable power generation, Mitsubishi Power's head of EMEA, Javier Cavada, told Platts in an interview.

Annual demand for gas-fired power capacity has surged past 100 gigawatts, more than triple the 30 GW average seen in the decade before COVID-19, according to Cavada. The constraint is no longer capital or demand but the physical capacity of supply chains to deliver turbines, he said in late June.

"We have never seen anything like this," Cavada said. "The bottleneck is the capacity [of the whole supply chain], not the demand or the capital."

Lead times for new installations have stretched from two years immediately after the pandemic to five years or more today. Mitsubishi is now signing contracts for delivery in 2031-34, Cavada said.

The surge in demand for gas-fired power generation comes as countries around the world add large volumes of renewables.

Cavada said gas turbines, far from being in competition with renewables, enabled the transition to renewables-dominated grids, providing responsive power generation.

"Gas provides the flexibility," he said. "When something goes wrong, you ramp up and you ramp down. It provides you energy frequency response. It gives you capacity that is available all the time. The gas is going to be utilized much less, but it is going to be available."

Three regions dominate

The demand surge is concentrated in three regions with distinct drivers, Cavada said. The US leads, propelled by data center and AI infrastructure buildout requiring not just vast electricity volumes but also cooling systems and high power reliability.

The Middle East ranks second, with Saudi Arabia alone accounting for more gas turbine orders than any country except the US, Cavada said. The region's demand reflects replacing oil-fired generation with gas to cut emissions by around 70% while freeing crude for export, balancing rapid solar and wind deployment, and supporting industrialization as Gulf economies diversify, he added.

China is the third major demand center, Cavada said. The country is rapidly pursuing a policy of power diversification and energy sovereignty.

Europe, by contrast, is experiencing its lowest activity levels ever -- not from lack of demand but from regulatory uncertainty and investment challenges that have stalled new projects despite clear grid reliability needs, Cavada said.

However, Germany stands ready to launch tenders for a combined 9 GW of new dispatchable gas-fired generation in September and December, subject to final parliamentary and European Commission approval.

Energy security focus

The Middle East conflict that began in late February has heightened concerns about energy security across importing regions, particularly Europe, which remains heavily reliant on Middle Eastern gas after diversification efforts since Russia's 2022 invasion of Ukraine.

Rather than slowing activity in the Gulf, however, the conflict appears to have accelerated business as governments moved quickly to demonstrate reliability to investors and contracting new plants for post-2030 delivery.

For Europe, the shock underscored an uncomfortable reality: despite ambitious renewable targets, the region cannot yet function without significant thermal capacity.

Cavada noted that a holistic system view was needed across solar, wind, thermal generation and grids, with clear market mechanisms in place to provide the right incentives for gas-fired generation.

Platts, part of S&P Global Energy, assessed German clean spark spreads for a standard 50% efficient gas turbine for the year-ahead at minus Eur7.20/MWh on July 2, underlining challenging economics for gas plant operators under baseload.

Hydrogen ready

All new turbines Mitsubishi Power delivers are now prepared for 30% hydrogen blending, with 50%-capable units entering service. Existing turbines can be retrofitted, primarily through combustion system modifications rather than wholesale equipment replacement, Cavada said.

Customers demand this feature even in regions with no immediate hydrogen supply, viewing it as essential future-proofing as renewable power generation expands and enables large-scale electrolytic hydrogen production.

"Even in the Middle East, customers want that feature incorporated because they know that when you build so much solar and you build so much renewable capacity, there will be a moment that you will start doing hydrogen," Cavada said.

He said even though the pace of hydrogen adoption in energy systems was slower than expected, the direction was clear.

"It's a matter of speed," Cavada said. "But the direction of travel continues."