A new report from BloombergNEF (BNEF) released on April 24, 2026, reveals that the cost of building a natural gas power plant has surged 66% over the last two years, primarily driven by the insatiable energy demands of AI-focused data centers.
As tech giants like Microsoft, Meta, and Google scramble for “firm” (24/7) power, the rush to construct gas facilities has triggered a global supply crunch for critical components.
1. The Cost Surge: From $1,500 to $2,157/kW
The price to build a new Combined Cycle Gas Turbine (CCGT) power plant has spiked significantly since 2023.
- Capital Expenditure: Costs have risen from less than $1,500 per kilowatt (kW) of generating capacity in 2023 to $2,157/kW in early 2026.
- Timeline Delays: Beyond just financial costs, the time required to complete a new facility has extended by 23%, complicating the rapid rollout schedules of AI developers.
- Equipment Premium: Gas turbines, which typically account for 30% of a plant’s cost, are projected to be 195% more expensive by the end of 2026 compared to 2019 prices.
2. Primary Driver: The Data Center “Giga-Project”
The shift in cost is a direct reflection of a fundamental change in the scale and urgency of data center power requirements.
- “Bring Your Own Power”: Following guidance from the Trump administration to reduce grid strain, data center operators are increasingly building their own on-site gas-fired generation.
- Size Explosion: In 2023, only 10% of data centers were 50 megawatts (MW) or larger. By 2035, the average facility is expected to exceed 100 MW.
- Megaproject Example: In February 2026, SB Energy unveiled the $33 billion Portsmouth Powered Land Project, a staggering 9.2 GW natural gas-fired facility designed specifically for AI workloads.
3. Supply Chain Bottlenecks
The “Big Three” turbine manufacturers—GE Vernova, Siemens Energy, and Mitsubishi Power—are struggling to meet the surge in orders.
- Manufacturing Gap: Global orders reached 110 GW at the end of 2025, while worldwide manufacturing capacity is limited to just 60–70 GW.
- Waitlists: Lead times for high-purity hot-section components (like single-crystal turbine blades) have stretched order books into the early 2030s.
- Labor Shortages: A lack of specialized labor for high-precision turbine assembly is further throttling production throughput.
4. Market and Public Fallout
The rising cost of gas generation is creating a “K-shaped” energy transition where tech companies can afford the premium while residential users pay the price.
- Ratepayer Backlash: While tech firms build private power, utilities are also investing in gas to support the general surge in demand, often passing these higher construction costs on to consumers.
- Google’s Divergence: In contrast to the gas rush, Google is piloting an alternative using long-duration energy storage (LDES), such as iron-air batteries, to “firm up” cheaper solar and wind power, avoiding the sky-high capex of gas turbines.