Data Center Demand Drives 66% Surge in Gas Plant Costs

The costs associated with constructing new combined-cycle gas turbine (CCGT) power plants have surged by 66%, climbing from under $1,500 per kilowatt in 2023 to $2,157 in 2025, according to a report from BloombergNEF. This uptick in cost and an average lead time increase of 23% reflect a significant demand from the data center sector, which is pressing to secure stable energy sources amid rising strains on supply chains. Equipment prices for new gas plants are reportedly over 195% higher than in 2019, and delivery backlogs for turbines are expected to extend well into the future, creating a constrained supply environment.

This dramatic rise in costs and construction timelines presents critical implications for energy strategies in the U.S., especially as major tech players like Microsoft and Meta secure substantial capacity from new gas plants for their data operations. While demand for reliable, dispatchable power sources leads to emerging players in the energy market offering modular solutions, the overall trend reflects a growing dependency on natural gas, which may undercut efforts towards energy autonomy and complicate the landscape for securing sustainable power alternatives.