Mitsubishi to double production of gas turbines as power plant expenses rise
Mitsubishi Heavy Industries plans to double its gas turbine manufacturing capacity within two years. The Japanese manufacturer is one of a small handful of companies working to fulfill gas turbine orders.
The cost to build new gas power plants is going up. And wait times for delivery of new turbines that generate electricity can stretch up to seven years, according to Utility Dive. The cost increase reflects growing demand for power from artificial intelligence data centers, the need to replace existing infrastructure and supply chain constraints across the power generation industry.
Why is Mitsubishi doubling production capacity?
Mitsubishi Heavy Industries CEO Eisaku Ito said the company initially planned to boost gas turbine production by 30% but determined that wouldn’t meet accelerating demand, according to Bloomberg. The decision comes as the International Energy Agency projects data centers will consume nearly half of all new electricity supply added to the U.S. grid through 2030.
The company said it is expanding output by improving production efficiency even as manufacturing costs have nearly doubled due to expensive materials, supplies and skilled labor shortages, Bloomberg reported. Following the news, Mitsubishi’s shares rose 2.5%.
How expensive are gas turbines becoming?
Companies starting construction on new gas power plants can expect to pay over $2,000 in capital costs for every kilowatt of power the plant will produce, according to a September 2025 report from the nonprofit GridLab. That’s up from $1,116-$1,427 per kilowatt for projects already underway and scheduled to complete construction in 2026 or 2027.
Entergy Louisiana recently received regulatory approval for three new gas plants capable of producing a combined 2.3 gigawatts of power — about twice the electricity needs of New Orleans. Using GridLab’s $2,000 estimate, the power plants would cost an average of $1.5 billion to construct.
In addition to the gas-fueled turbines that spin to generate power, the cost of transformers has also increased due to soaring prices for grain-oriented electrical steel and copper. Natural gas pipeline costs have ballooned in recent years due to the rising cost of steel pipes, which more than doubled between 2020 and 2021. Construction costs have risen, and the natural gas fueling power plants has also cost more in 2025 than any time since the end of 2022.
The supply scarcity has granted greater pricing power to manufacturers, with the three major producers now requiring reservation fees to secure manufacturing slots. Kentucky Utilities and Louisville Gas & Electric acknowledged in their recent filing that they needed to pay a $25 million reservation fee to GE Vernova to reserve a turbine for 2030 delivery, according to the GridLab report.
What does the turbine backlog mean for the grid?
The sustained cost increases and extended delivery timelines create significant challenges for meeting future electricity demand, particularly as coal plants retire. New combined cycle gas plants often cannot come online until at least 2030-2031.
Bobby Noble, senior program manager of gas turbine research at the Electric Power Research Institute, said even if manufacturers double production capacity, it would only increase overall industry output by 15-40%, according to Utility Dive. “It should help over time, but it is likely not enough to drastically reduce [wait times],” Noble said.
The post Mitsubishi to double production of gas turbines as power plant expenses rise appeared first on Straight Arrow News.
Ella Rae Greene, Editor In Chief
