Power for AI: Grid Queues, Nuclear PPAs, Gas Turbines — 2026-09-16

Top developments

BloombergNEF: US Data Centers to Out-Gas Most Nations by 2035

A new outlook from BloombergNEF indicates that data centers in the United States will consume more natural gas than most countries within a decade. This projection underscores the massive energy footprint of AI infrastructure and its direct impact on natural gas markets. The finding highlights the urgency of expanding generation capacity, particularly gas-fired plants, to meet the surging demand from hyperscale facilities.

Siemens Energy Tests New Turbine Materials Amid Record Backlog

Siemens Energy has commissioned a gas turbine at the Marl chemical park in Germany to test new materials, components, and manufacturing processes under real industrial conditions for four years. This initiative addresses the critical need for durability in high-load environments driven by the AI data center boom. The company’s order backlog has reached €162 billion, reflecting strong global demand for grid technology and power generation equipment.

Mitsubishi Heavy Doubles Gas Turbine Capacity for AI Demand

Mitsubishi Heavy Industries plans to double its production capacity for large gas turbines by fiscal year 2030 compared to fiscal year 2024. The company is investing over 100 billion yen ($670 million) in production sites in Japan and the US to meet the rapid increase in power consumption from AI data centers. This move signals a significant shift in global supply chains as manufacturers race to alleviate the bottleneck in gas turbine availability.

Musk Claims AI Data Centers Lower Consumer Electricity Prices

Elon Musk asserted that AI data centers are resulting in lower electricity prices for consumers, citing Georgia Power contracts that allegedly save customers nearly a billion dollars. However, independent analysis by 24/7 Wall St. suggests the reality is more complex, with rate cases often showing mixed or negative impacts on residential rates depending on cost allocation mechanisms. This debate intensifies as utilities file new tariffs to manage large-load integration without shifting costs to other ratepayers.

Local view

Germany: German financial media report that 2G Energy, a manufacturer of combined heat and power (CHP) systems, is seeing its order book surge due to the AI data center boom. Berenberg initiated coverage with a price target of €91, noting that the "hidden tip" of AI infrastructure is driving demand for decentralized power solutions like CHP units.

Japan: Nikkei Xtech highlights that California’s energy transition faces new challenges due to the rapid proliferation of AI data centers. The California Energy Commission notes over 200 facilities are operational, with demand hitting ~1 GW, straining the CAISO grid and complicating renewable integration goals.

Context & numbers

• Gas Demand: US data centers are projected to out-consume most countries' natural gas usage by 2035.
• Turbine Backlogs: GE Vernova has reported gas turbine delivery schedules extending to 2031, forcing some developers to look at alternative technologies like steam turbines and boilers.
• Investment: Mitsubishi Heavy Industries is investing over ¥100 billion to double gas turbine capacity by FY2030.
• Siemens Backlog: Siemens Energy holds a record order backlog of €162 billion, driven by grid and power generation demand.

On the radar

• FERC Show-Cause Deadlines: Stakeholders are awaiting FERC decisions on show-cause responses (EL26-67 through EL26-72) regarding large-load tariffs, which could reshape how data centers are integrated into RTO markets.
• PJM Compliance Filing: PJM’s May 18, 2026 further co-location compliance filing (ER26-1088-001) remains under review, with no announced decision deadline, creating uncertainty for new interconnection requests.