New Gas Plant Construction Costs Jump 66% Amid Data Center Demand

Rising demand from data centers for natural gas power is driving up the cost of new combined-cycle gas turbine (CCGT) plants, according to a report from BloombergNEF. The report found that costs have climbed from less than $1,500 per kilowatt of capacity in 2023 to $2,157 in 2025—a 66% increase. Construction timelines have also lengthened, with new plants taking on average 23% longer to build.

This surge in demand is also straining the gas power supply chain, with equipment costs for new plants expected to be more than 195% higher than in 2019. The gas turbine manufacturing sector remains particularly constrained, with producers struggling to keep pace and delivery backlogs reportedly stretching beyond 2029. Despite rising costs and longer lead times, data center developers continue to pursue new gas-fired power projects to support their operations.

Recent deals highlight the trend, with Microsoft and Meta committing to offtake significant capacity from natural gas plants to power their operations. Rising demand for dispatchable gas power is also bringing new entrants into the market, particularly those offering modular solutions. A notable example came last December, when Crusoe signed an agreement with Boom Supersonic to purchase 1.21GW of its “Superpower” turbines—42MW natural gas units designed to fit within shipping container-scale deployments.