The new landscape for gas-fired power: turbocharged or turbo lag?
Global gas-fired power faces both opportunities and challenges through 2040, as manufacturing constraints, rising costs and regional dynamics shape the sector's outlook
1 minute read
David Brown
Director, Energy Transition Practice
David Brown
Director, Energy Transition Practice
David is a key author of our Energy Transition Outlook and Accelerated Energy Transition Scenarios.
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Global power demand is set to surge in the coming decades, potentially fuelling a bull run for natural gas-fired power. However, the gas turbine market faces both opportunities and challenges through 2040.
Fill out the form at the top of the page to download a complimentary extract from our recent report, The new landscape for gas-fired power: turbocharged or turbo lag?, which draws on Wood Mackenzie’s holistic insights from across our Supply Chain Analytics and Consulting teams’ proprietary knowledge and Lens Power and Renewables solutions. And read on for an introduction to a few of its key themes.
Key takeaways from the report
- Gas turbine orders surged 32% year-on-year in 2024, driven by anticipated load growth from electrification, AI and hydrogen production.
- Manufacturing constraints could limit near-term growth, with current capacity utilisation around 90% and delivery timelines subject to delays.
- Rising capital costs and power market prices below the cost of new gas generation pose challenges, particularly in the US.
- In Asia, high fuel prices may limit gas to a peaking role despite strong demand growth.
- European decarbonisation goals are leading to a phase-down of unabated gas, with its share of supply declining significantly by 2040.
Four key factors will influence gas-fired power investment through 2040:
- Data centre demand projections versus market realities
- Gas turbine manufacturing capacity expansion decisions
- Commercial viability of gas with carbon capture and hydrogen blending
- Midstream infrastructure project execution
While gas-fired power remains crucial for the energy transition, its role faces limits due to fuel costs, construction expenses, and competition from renewables and energy storage. The evolving trade landscape and potential policy shifts add further uncertainty to the sector's outlook.
Learn more about the future of gas-fired power
The full report delves deeper into the future of gas-fired power and its impact on global energy markets, our latest expectation for annual gas installations vs manufacturing capacity, the risks to data centre development and more.
Fill in the form at the top of the page to access a complimentary extract.
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