The increasing demand for electricity driven by technological advancements necessitates robust power solutions. GE Vernova is at the forefront of meeting this demand, securing significant contracts to provide natural gas turbines for data centers with substantial power requirements.
Big tech companies are reserving gas turbines, the core of gas-fired power plants, for their planned 5-gigawatt data center campuses, according to GE Vernova CEO Scott Strazik. These facilities, anticipated to be operational as early as 2028, will consume enough energy to power major cities. In the past month alone, GE Vernova has signed 9 gigawatts of reservations for gas turbines, including agreements with data center developers. This surge in demand signals only the beginning of a larger trend, Strazik emphasized in an interview.
The escalating need for power stems from the growth of artificial intelligence, new factories, and the electrification of various sectors, from transportation to household heating. This rising consumption, projected to increase by nearly 16% in the US over the next five years according to Grid Strategies, may rely heavily on fossil fuels, posing challenges to the climate goals of major tech companies.
While companies like Amazon, Alphabet, and Microsoft are investing in nuclear energy, the development of these resources will take time. Natural gas is viewed as a crucial bridge fuel to meet the immediate demand in this decade. CreditSights, a research firm, has adjusted its projections, reducing estimates for wind and solar growth by 2030 while significantly increasing its forecast for gas demand in data centers during the same period.
Data center developers are actively seeking locations with sufficient power capacity to support their large-scale operations. OpenAI, for example, is advocating for the construction of 5-gigawatt data centers to maintain the US’s competitive edge in AI development. A 5-gigawatt capacity is typically enough to power approximately 3.8 million homes.
Although GE Vernova hasn’t disclosed the specific companies involved in the gas turbine contracts, Strazik confirmed they include data center developers and other power plant developers. All new US orders for these turbines will be manufactured at GE Vernova’s South Carolina factory. The company anticipates securing 20 gigawatts of global gas orders annually for the next four years, with the US contributing over half of that volume.
Strazik highlighted the necessity for expanded infrastructure, including gas pipelines and transmission lines, to support economic growth and ensure energy security. He anticipates an “all-of-the-above” approach to infrastructure development in the energy sector.
Discussions between GE Vernova and data center developers also encompass emission reduction strategies. The company aims to launch carbon capture plants at existing facilities in the early 2030s, with some clients exploring the use of available space for direct air capture plants. These efforts underscore a commitment to mitigating the environmental impact of increased reliance on natural gas.
In conclusion, GE Vernova’s recent contracts for gas turbines signify the company’s crucial role in powering the expanding digital infrastructure. As data centers continue to grow in size and number, the demand for reliable and efficient power solutions will remain a key driver in the energy sector. GE Vernova’s commitment to meeting this demand, while also exploring emissions reduction technologies, positions the company as a leader in navigating the evolving energy landscape.
