The Queue Before the Queue | GEV’s Backlog Extends to 2031

GEV’s gas turbine backlog climbed to 116 GW in Q2, up from 100 GW in the prior quarter as utilities, independent power producers (IPPs) and data center developers continue securing generation equipment years in advance. Turbine demand has intensified to the point that the supplier is now sold out until 2031 for deliveries.

The growing backlog strengthens the position of existing gas-fired generation. Equipment lead times are one element of drastic increases in new build CCGT costs, up more than 2x since 2020. It is becoming increasingly difficult to build new CCGTs. In ERCOT’s current market, a highly efficient CCGT requires a PPA of ~$70/MWh to achieve bankable returns, while the same asset in PJM requires a capacity price upwards of $400/MW-day.

This trend is also reflected in secondary markets who have seen similar levels of inflation in the price paid for operational assets, which continue to transact at approximately ½ that of replacement costs (Figure 1). The build-vs-buy dilemma remains tilted toward acquisitions. For companies seeking exposure to near-term load growth, purchasing existing generation remains the more attractive path.

Research Highlights:

• Cheaper To Buy | CCGT Replacement-Cost Wedge – We examine the widening replacement-cost wedge between new combined-cycle gas turbine (CCGT) facilities and acquisitions of existing gas-fired power plants.
• Race to Resiliency | OBBBA Tax Deadline Review – We Identify U.S. renewable projects that remain economic after the One Big Beautiful Bill Act’s accelerated tax credit phaseout.
• PJM RBP | Buying Capacity for Load at Risk – This report outlines our view of PJM’s proposed Reliability Backstop Procurement, including the projects and technologies likely to participate and the program’s expected impact on capacity prices.

Top Three Takeaways:

1: How large is GEV’s gas turbine backlog, and when are deliveries available?

GEV’s gas turbine backlog climbed to 116 GW in Q2, up from 100 GW in the prior quarter. Demand from utilities, independent power producers (IPPs) and data center developers has intensified to the point that the supplier is now sold out until 2031 for deliveries.

2: Why is building a new CCGT so difficult today?

New CCGT costs have risen more than 2x since 2020, with equipment lead times a key driver of that inflation. In ERCOT’s current market, a highly efficient CCGT requires a PPA of approximately $70/MWh to achieve bankable returns, while the same asset in PJM requires a capacity price upwards of $400/MW-day.

3: Why does the build-vs-buy dilemma favor acquiring existing gas assets?

Operational assets continue to transact at approximately half of replacement costs. With new CCGT economics strained by supply chain constraints and rising prices, purchasing existing generation remains the more attractive path for companies seeking exposure to near-term load growth.