Supply Chain · Data Center · Microsoft · Bloomberg · Donald Trump · Intel · Datacenter Dynamics
Cost to construct new gas plants surges by 66% as data center demand strains supply chain - report
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Data center demand for natural gas power has led to a surge in the costs of new combined-cycle gas turbine (CCGT) power plants, according to a report from BloombergNEF.
Key facts
- The report found that the cost of a new CCGT plant has skyrocketed from less than $1,500 per kilowatt of generating capacity in 2023 to $2,157 in 2025, a 66 percent increase — This has had an impact on the supply chain for gas power plants, with prices for equipment for new gas plants expected to be more than 195 percent higher than in 2019
- As AI drives increasing energy consumption in the US, natural gas looks set to fill the gap
- Notable recent deals have seen Microsoft and Meta commit to offtake significant amounts of capacity from natural gas plants to power their operations
Summary
As AI drives increasing energy consumption in the US, natural gas looks set to fill the gap. The report found that the cost of a new CCGT plant has skyrocketed from less than $1,500 per kilowatt of generating capacity in 2023 to $2,157 in 2025, a 66 percent increase. Demand from the data center sector has been posited as one of the major drivers of this increase, as more and more seek to “bring their own power,” under pressure from the Trump administration. This has had an impact on the supply chain for gas power plants, with prices for equipment for new gas plants expected to be more than 195 percent higher than in 2019.