Catalyst Podcast — "The Gas Turbine Crunch"

Host: Shayle Kann
Guest: Tony Bruff, President of Dora Partners
Date: December 26, 2025
Episode Overview:
This episode dives deep into the global gas turbine supply crunch, why demand for turbines is surging, the effects on the energy transition, and how the industry responds to long lead times, constrained supply chains, and rising prices. Shayle Kann interviews Tony Bruff, a veteran consultant in the gas turbine and energy sector, about the history, dynamics, and near-future prospects of this suddenly red-hot industry.

Main Theme

The “gas turbine crunch” refers to the unprecedented demand and increasingly limited supply of large-scale gas turbines—machines critical for electricity generation and, increasingly, for supporting data centers and other high-growth energy applications. The episode unpacks why the current market is different from past booms and busts, how supply chain constraints shape outcomes, and what this all means for emissions reduction, technological progress, and the energy landscape at large.

Key Discussion Points & Insights

1. History of Gas Turbine Market Cycles

• Market Evolution:
  • 1970s–80s: Dominated by two OEMs (GE, Westinghouse).
  • Three major OEMs today: Mitsubishi Heavy Industries (MHI), Siemens, GE Vernova.
  • Small turbine player: Solar Gas Turbines (Caterpillar division).
• Boom-and-Bust Dynamics:
  • Major “bubble” in 1998–2001, driven artificially by Enron and deregulation signals, leading to overbuilding and subsequent market collapse.
    • “That was really being driven by an artificial demand created by Enron.” (C, 06:36)
  • More recent cycles in 2012 and the current moment, but today’s peak considered “more realistic and market-driven.” (C, 04:31)
  • Past overbuilding led to cautious expansion; OEMs burnt by previous busts are wary of adding capacity now.

2. Current Demand Drivers and Market Realities

• Why This Time Is Different:
  • Demand now tied to clear, real needs—utilities, the AI/data center explosion—not just speculation.
    • “Mostly what's happening is it's either utilities saying, ‘we need more capacity,’ or it's data centers…” (A, 08:17)
• Multiple End Markets:
  • 50% of turbine orders serve oil & gas, not electricity; OEMs serve several sectors (utility, oil & gas, aerospace).
  • Supply chain materials (nickel, titanium, superalloys) also under pressure from aerospace—current backlog: 40,000 jets = 80,000 engines (C, 11:37, 20:19).
• Demand Persistence:
  • Oil & gas investments made on 7-10 year cycles, insulating orders from short-term commodity price swings (C, 14:45).

3. Supply Constraints and Pricing Pressures

• Capacity Sold Out:
  • Major OEMs “sold out through 2029”; buyers face 3–5 year lead times (A, 18:55; C, 22:43).
  • Large, nonrefundable deposits now standard for buyers.
• Prices Up 30–35%:
  • “Price is definitely up... about 30 to 35% over the last five years.” (C, 19:56)
  • Raw material surges and supply chain stress amplify this trend beyond simple supply/demand (C, 20:19).
    • Notable quote: “When you've got the aerospace industry ordering 40,000 aircraft, that's at least 80,000 gas turbines—all drinking from the same supply chain.” (C, 20:19)

4. Lead Times and OEM Strategies

• Current Lead Times:
  • Running 36–60 months (most commonly ~48 months) (C, 22:43).
• OEM Response:
  • OEMs working hard to prevent further timeline extension and to avoid losing customer goodwill (C, 21:44).
  • “Guarded optimism”—OEMs investing in production but wary of over-expansion, drawing lessons from past busts (C, 10:19).

5. Segmented Demand: Sizing and Application

Five Major Market Drivers (C, 23:28):

1. Grid-scale battery storage
2. Coal plant retirements
3. Grid-scale renewables expansion
4. Data center and AI load growth
5. Access to/price of natural gas

By Size:

• <20 MW (Small):
  • Less affected by grid-scale storage/renewable trends; serves niche/off-grid/mobility/bridge needs.
• 40–100 MW (Medium):
  • Sometimes positively impacted by grid-scale storage (e.g., used in hybrid systems to recharge batteries when electricity is cheap).
    • “There are several of the developers... developing hybrid systems that use gas when its cost is low to recharge their grid scale battery storage.” (C, 25:13)
• >150 MW (“Jumbo”):
  • Demand suppressed by batteries/renewables, but boosted by coal retirements and data center super-projects.

6. The Role of Mobile Power/Bridge Units

• Data Centers & Grid Constraint:
  • With data center loads exploding and the grid unable to connect them fast enough, gas turbines (both mobile and permanent) are a stopgap solution.
    • “We need power now because we're building a data center and the grid connection is going to take 3 to 5 years.” (A, 28:53)
• Flexible, Mobile Turbines:
  • Utilities use mobile turbines to patch grid-scarce areas until infrastructure catches up, then move them elsewhere (C, 29:28).
  • “The mobile power has just been a fantastic opportunity for basically three companies: Solar Gas Turbines, GE Vernova... MHI Aero Power. Those three players have done extremely well...” (C, 29:28)

7. Data Centers: The Big New Driver

• Enormous Projected Growth:
  • US: 1,400 new data centers planned, 1,000+ are large/hyperscale (C, 31:44).
    • “Some of those data centers, their electrical load is more than the community around them.” (C, 31:44)
  • Not all will be built (speculative bubble risk), but the volume is transformative for turbine OEMs.
• Regional “Mecca”:
  • Northern Virginia/DC now has the world’s highest concentration of data centers (C, 32:46).

8. Speculation vs. Real Demand: Lessons Learned

• Potential Speculative Bubble:
  • Many “cowboys” in the market; not all planned data centers/turbine projects will materialize (A, 33:14).
• OEM Risk Management:
  • Heavy nonrefundable deposits ensure buyer seriousness (A, 34:23).

9. Technology Trajectory

• Efficiency Improvements:
  • Steady, incremental advances—combined cycle plant efficiencies rising toward 62% (C, 35:56).
    • “...they were levers that they were pulling to try and squeeze more efficiency out...and they crept it up to 60, then to 60.5, 61, 60.3—they’re starting to push 62% efficiency and more.” (C, 35:56)
• Hydrogen Readiness:
  • OEMs working to make turbines hydrogen-compatible, but question remains: Will affordable hydrogen supply actually materialize?
    • “They can...operate on hydrogen. The biggest problem is, where are they going to get it?” (C, 35:56)

Notable Quotes & Memorable Moments

On Market Cycles:

• “If you go back to that first big bubble... that was really being driven by an artificial demand created by Enron.” — Tony Bruff (06:36)

On Current Pricing and Lead Times:

• “I could have built a new natural gas project for like $750 a kilowatt. Today it would cost me $2,500 a kilowatt.” — Citing John Ketchum/Nextera (A, 18:55)
• “Price is definitely up... about 30 to 35% over the last five years.” — Tony Bruff (19:56)
• “All the OEMs are working like crazy to try and shorten up their lead times or at least make sure they don’t get worse.” — Tony Bruff (21:44)

On Data Centers and Future Speculation:

• “There are a thousand large scale data centers in development in the United States. And I will state categorically, I don’t think there will be a thousand new hyperscale data centers in the United States anytime soon.” — Shayle Kann (33:14)
• “Some of those data centers, their electrical load is more than the community around them.” — Tony Bruff (31:44)

On Technological Change:

• “They’re starting to push 62% efficiency and more. And I don’t think they’re going to quit…” — Tony Bruff (35:56)
• “While they’re all spending a lot of money...I have some doubts as to whether the market will actually see a significant increase in purchases of gas turbines that actually are using hydrogen.” — Tony Bruff (35:56)

Timestamps for Important Segments

• 03:20: Current market tightness, winner OEMs, rapid load growth
• 04:18–06:36: Gas turbine market history and previous bubbles
• 11:37–14:11: Turbine supply chain levels and non-utility sectors (oil & gas, aerospace)
• 18:55–21:31: Prices, lead times, and supply/demand mix
• 23:28–26:53: Market drivers by segment—batteries, coal, renewables, data centers, gas
• 28:53–30:51: Mobile/bridge power and grid pinch solutions for data centers
• 31:44–34:23: Data center mega-growth, speculation, and OEM risk
• 35:56–38:59: Technological progress: efficiency and hydrogen

Tone and Language

Shayle Kann uses probing, analytical language with a wry, informed skepticism, especially regarding market speculation. Tony Bruff provides industry veteran insight, backing up claims with data and lived market experience. Their interplay fosters both caution and optimism about the sector’s future.

Summary Verdict

This episode is essential for understanding today’s rush on gas turbines—a market that, though under-the-radar for many, suddenly sits at the crossroads of AI, energy transition, and infrastructure bottlenecks. Shayle and Tony illuminate the interplay of fundamental supply chain realities, sector-bridging demand drivers, and the risks of betting too hard on the next boom when the last crash is still in industry memory.