China Targets Global Gas Turbine Market as AI Power Demand Explodes

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China is urging its gas turbine manufacturers to accelerate technology development and pitch sales to overseas data centers, the Chinese energy regulator said on Thursday, as…

What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,…

China is urging its gas turbine manufacturers to accelerate technology development and pitch sales to overseas data centers, the Chinese energy regulator said on Thursday, as Beijing targets challenging the Western firms’ dominance in this rapidly expanding market.

Global orders for gas turbines have hit a record high as demand for power generation surges, JP Morgan said earlier this year.

New gas turbine orders in the second quarter of the year stood at 38 gigawatts (GW), which was 29% higher than orders for the first quarter of the year, the investment bank said. The increase in second-quarter orders was much higher on an annual basis, too, at 71%, JP Morgan noted.

The United States accounted for half of these new turbine orders, the bank said, as demand for electricity surges with the proliferation of data centers. New electricity generation capacity would be critical to supporting the advance in AI and the onshoring of manufacturing. This has led to shortages and long wait times as gas turbine manufacturers don’t hold inventory of the machinery.

The waiting times of over five years in some cases could be “both an opportunity and a challenge” for the Chinese gas-turbine manufacturing industry, Wang Yunbo, deputy director of the market regulation department at the National Energy Administration, told the People’s Daily as carried by Bloomberg.

Some Chinese manufacturers are already signing deals to expand overseas.

Dongfang Electric Corporation, for example, last month signed an agreement with Canadian data center developer Eco DC Solutions to provide 30 Dongfang gas turbines to support over 2.1 GW for Canadian data centers.

Earlier this year, Shanghai Electric Group Co., Ltd secured a turnkey contract to deliver equipment to a power plant in Malaysia.

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