Data centers’ urgent power needs put a new spotlight on gas generation in the last few years. But a turbine supply crunch, and high prices, led many in the industry to assert that new gas generation would take years to bring online, and that renewables would be the preferred option for those seeking power fast. In fact, NextEra CEO John Ketchum explicitly said as much just a year ago.
Now, a new Jefferies’ equity research note says that might not be the case after all.
The supply of gas turbines and close substitutes is expected to increase by over 80% by 2030, to over 125 annual gigawatts globally. Of those, approximately 46 GW are expected to come from manufacturers providing behind-the-meter solutions for data centers, which are picking up traction as hyperscalers and developers struggle with grid capacity constraints and long interconnection times. That’s an increase of 25 GW compared to 2025, and an annual growth rate of approximately 17%.
“Generation equipment is increasingly not the primary bottleneck,” according to the analysts, noting that there will be at least 19 GW of available equipment capacity by 2028, and 76 GW by 2030.
Now, not all of this equipment will be readily available — but some will, especially for behind-the-meter applications. While large turbines like the ones GE Vernova produces will indeed be over 90% and 70% booked for 2028 and 2029 respectively, behind-the-meter systems, which are smaller and quicker to produce, are going to be about 65% and 33% booked for the same timeframe.
“Given the readily available BTM capacity, continue to expect hyperscalers to move in this direction,” Jefferies’ report adds.
That said, the supply chains for other materials could very well still complicate data centers’ ability to get the energy they need. Jefferies noted that high-voltage equipment, such as transformers and switch gears, could see a supply crunch. Another complication: finding the people with the expertise to put these systems together. A lack of skilled labor in particular is shaping up to be a “persistent, inflexible problem,” they wrote.
These findings suggest an important narrative shift. While gas is favored for data center power due to its baseload reliability, there has been an assumption that renewables would prevail because they are cheap to deploy. If gas generation equipment is equally available, even if it’s more expensive, that might not be the case at all. It’s worth noting that NextEra, while remaining a major renewables leader, has since significantly increased its focus on gas generation.
Another takeaway from the Jefferies report is behind-the-meter generation as the “near term winner” in the current energy cycle, something that was considered far-fetched even just a year ago.
Being cheaper and more reliable, generation with a grid connection is still the preferred option for most developers setting up a data center, with only a handful of them attempting to build fully islanded facilities.
But behind-the-meter, bring-your-own-capacity solutions have become a bridge solution that could last up to ten years. “A gas reciprocating engine, which can last [between 40,000 and 80,000] hours before first major maintenance, can support a data center for [more than 11 years] years running at 80% capacity factor, longer with batteries,” Jefferies’ report notes. By being off-grid, a data center could also avoid transmission costs of $100-$350 per megawatt-day, which are “material and underappreciated savings.”
“In conclusion, we see a clear extension in behind-the-meter duration but an eventual pivot to front-of-the-meter will create a secondary market for BTM equipment,” the report says. “We also see behind-the-meter over-indexed to potential weakness in end-demand. If we see weakness in demand, expect the behind-the-meter market to be impacted first.”
A version of this story was published in the AI-Energy Nexus newsletter on February 18, 2026. Subscribe to get pieces like this — plus expert analysis, original reporting, and curated resources — in your inbox every Wednesday.
