GTHT has released a research report stating that gas turbines are core power generation equipment, with demand driven primarily by data center construction and the energy transition. The firm estimates annual demand will reach 110-120 GW over the next several years.
Under the wave of data center buildout and energy transition, the global gas turbine industry chain is experiencing a sustained period of supply-demand imbalance. The global supply chain is being reshaped, presenting development opportunities for domestic manufacturers of main engines, skids, and core components to accelerate their entry into the global market.
Key Drivers of Demand
Gas turbines are core power generation equipment, offering advantages such as high flexibility, efficiency, low carbon emissions, and reliability. The upward trend in gas turbine demand is mainly driven by the upgrade of the energy structure and the accelerated construction of data centers. GTHT expects annual demand to be in the range of 110-120 GW. Specifically, 1) Data centers: Led by markets like North America, global data center electricity demand is projected to range from 170 GW to 383 GW by 2030, with an average annual demand of approximately 14-47 GW from 2025 to 2030. The continued growth of artificial intelligence and global digital services will push up expectations for data center construction, with potential upward revisions to power demand. 2) Energy transition: Combined-cycle power plants are critical for the energy transition in the Middle East market, with major global gas turbine manufacturers securing orders for multiple power plants and other gas turbine projects.
Supply-Side Dynamics
Global production capacity is unable to meet demand, with manufacturers in a phase of raising prices and steadily expanding production. 1) Tight production schedules: Global core OEMs have their production schedules booked out to 2030. Since fiscal 2024, GE Vernova's quarterly and annual gas turbine orders have consistently exceeded actual sales, with the order-to-sales ratio ranging between 1 and 4, confirming a sustained state of supply shortage. 2) Rising prices: Gas turbine prices have been steadily increasing. On a per-kilowatt basis in USD, GEV expects order prices for the first half of 2026 to be 10-20% higher than those for the fourth quarter of 2025. 3) Steady capacity expansion: Benefiting from strong order backlogs, global core gas turbine OEMs have begun to expand capacity. For example, GEV plans to steadily increase its annual production capacity from 20 GW in July 2026 to 30 GW by 2030.
Domestic Opportunities
Amid the supply-demand mismatch, the global supply chain structure is being reshaped, allowing domestic manufacturers to accelerate breakthroughs and target the global market. 1) Core components and materials: To cope with the significant surge in gas turbine demand, global OEMs are placing higher demands on supply chain delivery assurance. This creates opportunities for Chinese core component and material companies to enter the supply chains of top-tier international OEMs and secure supply opportunities for more types of components. Examples include Yingliu Stock, Wanzek Stock, and Hangyu Technology, which have signed long-term strategic cooperation agreements with some top-tier international OEMs. 2) Self-developed gas turbines and power generation skids: Domestic manufacturers, such as Dongfang Electric and Steam Turbine Technology, are accelerating the development of self-developed gas turbines and advancing their commercialisation. China now possesses independent research and development technologies for both medium and light, as well as heavy-duty, gas turbines. For instance, Dongfang Electric's G50 has begun to enter the international market. Simultaneously, in the field of gas turbine power generation skids, domestic manufacturers are accelerating their overseas expansion. Jereh Group, for example, has secured resources for multiple core engines. As of July 2026, it has secured approximately $2.6 billion in generator set orders for areas including North American data centers.
Risk Warnings
1) Industry risks: Intensified industry competition, risk of delays in downstream data centre and energy transition projects, risk of international trade conflicts, and risk of adverse exchange rate movements. 2) Company-specific risks: Capacity expansion falling short of expectations, resource and customer expansion falling short of expectations, revenue recognition and profitability falling short of expectations, and global strategy falling short of expectations.