Is Korea’s First U.S. Investment in Jeopardy? Global Gas Turbine Shortage Threatens 2029 Delivery for K-Turbines

Global Orders Outpace Production Capacity by Up to 80%
Supply Lead Time Stretches to Six Years

Doosan's U.S. Orders to Be Delivered Starting 2029
Timeline Overlaps with Encinal Project Launch

Kim Jeonggwan: "Korean Firms May Miss the Deadline... U.S. Considers Korean Companies for Other Projects"

Yonhap News

Concerns are being raised that domestically produced gas turbines may not be supplied for the Encinal gas-fired combined cycle power plant in Texas, the first major U.S.-targeted strategic investment project under the Korean government. This is because a global surge in gas turbine orders, driven by the expansion of artificial intelligence (AI) data centers, has filled the production schedules of Korean companies for several years into the future. While the government has made it a priority to maximize Korean corporate participation, meeting the project's timeline for Phase 1 commercial operation in 2029 is emerging as a significant variable.

According to the industry on October 2, by the end of last year, global gas turbine orders totaled 110GW, far exceeding the annual production capacity of 60–70GW. Energy consulting firm Wood Mackenzie analyzed that the lead time from order to delivery for large gas turbines has risen to as much as six years. The gas turbine backlog for GE Vernova in the U.S. amounted to 116GW in the second quarter of this year, and orders are currently being accepted for deliveries stretching to 2031.

Doosan Enerbility, the only company in Korea to independently develop and manufacture large power generation gas turbines, is also pushed to the limit in terms of its production schedule. In March, Doosan Enerbility signed a contract to supply seven 380MW-class gas turbines to a data center in the United States. When combined with previous contracts, total U.S. supply commitments now reach 12 units. The newly secured seven turbines are scheduled for delivery at a pace of one unit per month starting from May 2029.

The commercial operation target for Phase 1 of the Encinal project is also set for 2029. Thus, the supply dates for existing contracts coincide with the Encinal project timeline. Minister of Trade, Industry and Energy Kim Jeonggwan commented to reporters the previous day, "Even if we want to use our gas turbines, there could be an issue where the gas turbine manufacturers cannot meet the schedule at that time. Domestic companies are already committed to deliveries in the pipeline, making the situation challenging."

With the Encinal project chosen as the first large-scale U.S. investment project, one of the main expected benefits has been increased access for Korean companies to the U.S. electricity market. If domestic companies are able to participate in engineering, procurement, and construction (EPC), and supply key power generation equipment such as gas turbines and transformers during the power plant construction process, the sizable U.S. investment could be turned into order opportunities for Korean firms.

However, with surging demand for gas-fired power generation—particularly in the U.S.—securing gas turbines itself is rapidly becoming a critical factor for power plant construction projects. As electricity demand from AI data centers soars and more gas-fired power plant projects are announced, it remains difficult to ramp up gas turbine production capacity quickly, since it requires large-scale facilities and highly skilled personnel.

Production capacity is also concentrated among a few global companies. According to Global Energy Monitor, a global energy infrastructure tracking institute, three companies—GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries—account for about 66% of the world’s gas turbine manufacturing capacity. Each of these companies is working to expand capacity, and the global output is expected to rise by more than 50% by 2030. However, demand is also forecast to increase in the same period due to the spread of AI data centers and the replacement of aging power plants.

This supply shortage is also impacting prices. Wood Mackenzie forecasts that by the end of 2027, gas turbine prices will reach around $600 per kilowatt, up 195% compared to 2019. If gas turbines are not secured in time, it could affect not only the completion schedule for power plants but also overall project costs.

Doosan Enerbility is also expanding its production capacity to keep up with rising demand. Last year, the company began expanding its Changwon plant to increase its capacity for manufacturing gas turbines. While the company’s plan is to gradually ramp up output to match the global market’s expansion, it remains to be seen whether additional production can be allocated for the Encinal Project at the required time, considering the sequential delivery of existing orders.

The government is also negotiating with the U.S. side to consider both the project schedule for the Encinal project and the supply capabilities of domestic companies. Minister Kim stated, "The U.S. side has said that if Korean companies cannot meet the timeline for the Encinal project, they would consider Korean firms for other projects. We are encouraging as much Korean participation as possible, including options to adjust delivery schedules for various projects."

This content was produced with the assistance of AI translation services.