Demand for gas is skyrocketing. In an era of new load growth caused by electrification, the onshoring of manufacturing, and a boom in data centers for artificial intelligence, gas has become the “first-choice technology to fill the impending gap,” the think tank RMI found in a new report, seen by Latitude Media before its publication today.
For the rest of the decade, utilities and independent power providers are projected to double the recent rate of construction. The average capacity additions, RMI found, is projected to jump from nine gigawatts per year between 2010 and 2024, to 19 GW per year beginning this year.
This load growth means that it’s hard to find a gas turbine these days, with lead times ballooning to four years and in some cases longer. The three companies that supply much of the demand for turbines — GE Vernova, Siemens Energy, and Mitsubishi Power — are all reporting delivery backlogs. And the cost of a turbine is rising in response to the demand, which “means that the price of a gas turbine when contracts are signed may be significantly higher than the price estimated during planning,” the RMI authors Jesse Cohen, Tyler Fitch, and Lauren Shwisberg wrote.
As a result, RMI found that plans to build more gas are out of step with the reality of supply chain constraints. The researchers analyzed the plans of 104 utilities, representing over half of the electricity demand in the U.S., and found that their collective plans for how much gas capacity they plan to build by 2030 jumped from less than 25 GW in 2021, to over 45 GW by the end of 2024.
“If project developers can’t procure turbines, these new gas projects will face delays and utilities across the nation could face near-term reliability risks,” the authors wrote.
And the stakes for the grid are high. The North American Energy Reliability Corporation projects national peak demand to increase by 150 gigawatts over the next 10 years, right as more than 120 GW of existing generation retires, leaving a gap of roughly 270 GW.
Against this backdrop, the think tank RMI evaluated the viability of alternatives to new generation for maintaining grid reliability, such as virtual power plants and grid-enhancing technologies. Existing clean energy and demand response solutions can meet more than 95% of expected load growth, the study found. These alternatives “can rapidly scale to meet demand — and often at lower cost.”
The GETs and VPP opportunity
The researchers found that incorporating energy efficiency, VPPs, GETs, clean repowering, and hybrid “power couples” into utility and system operator plans “can reduce exposure to turbine shortages, maintain reliability, and shield customers from cost shocks.”
These solutions are “uniquely suited to the urgency and uncertainty of load growth,” the authors found, because they can scale rapidly.
This echoes previous research about the grid benefits of both grid-enhancing technologies, or GETs, and VPPs.
For instance, in 2024 the Department of Energy’s “liftoff” report on innovative grid technologies found that technologies like advanced conductors, dynamic line ratings, and VPPs could support up to 100 GW of incremental peak demand, by increasing both transmission and distribution capacity. But at the time, deployment of all of those technologies was slow — and it remains scattered, with true scale still a long way off.
Momentum is beginning to pick up, though. Companies like the DLR startup LineVision are seeing the opportunity to partner with utility customers as well as the utilities themselves. As the new CEO Vishal Kapadia told Latitude Media last week, once major energy users like data centers are aware that DLR can unlock unused grid capacity, “that can then be leveraged with the deep relationships [with utilities] that the company has already established to start to create a lot more pull for the product.”
VPPs face some of the same challenges as GETs. According to the DOE, VPPs alone could meet up to 20% of the country’s peak demand needs, but would need to be scaled up to 160 GW of capacity by 2030. That would come with other benefits, such as reducing spending on peaker plants, mitigating transmission backlogs, and saving $10 billion in annual grid costs, per the 2023 VPP liftoff report.
However, there’s a lack of consensus about how best to scale VPPs, which involve combining distributed energy resources for better grid flexibility. There tends to be agreement about the long-term goal of controlling many devices with a single signal in order to control demand. But as Latitude Media has reported, the lack of a clear path is holding back the relatively young market.
