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Costs to build natural gas-fired power plants in the US increased 66% between 2023 and 2025 as developers propose building more projects nationwide to meet rising electricity demand, adding to customer and political concerns about rising power bills.
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The average project expense for a gas power plant with combined-cycle turbines, the more efficient type, rose to $2,157 per kilowatt last year from less than $1,500 in 2023, according to a report from BloombergNEF.
Surging power demand from data centers and new factories is reshaping the US energy landscape, driving plans for new gas plants. That’s threatening climate goals, creating a rush for skilled labor and lifting shares of companies that own gas plants and turbine makers such as GE Vernova Inc. Meanwhile, some of the world’s biggest technology companies are willing to pay premium prices to obtain power for their data centers.
BNEF projects 106 gigawatts of new data center-driven demand in the US by 2035, with the rush for power running into a supply crunch caused by political, bureaucratic and financial roadblocks. The head of a natural gas producer recently said that’s the energy equivalent of 20 New York Cities.
“It won’t be smooth sailing,” Katrina White, a clean energy analyst, said during a presentation Tuesday at the BNEF Summit New York.
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US utilities filed for almost 24 gigawatts of gas-fired power capacity with state commissions in 2025, up 570% since 2023, as they turn to gas to replace retiring generation and meet the new US demand, according to BNEF. A gigawatt is roughly the output of a large nuclear reactor and can power about 750,000 homes.
When a regulated utility builds a power plant, it passes the cost onto existing customers. More expensive power plants will likely mean higher utility bills for homes and small businesses. Some tech companies have pledged to make sure their data centers don’t drive up bills for other customers, but the issue has become a political flashpoint heading into the US midterm elections.
The time to bring a gas-fired power plant online also has increased, climbing 23% from 2023 to 2025, according to the BNEF report, which analyzed utility filings.
Note: Includes projects tracked in BNEF’s “US Gas Power Plants: Higher Costs, Longer Waits” report and is not inclusive of all new projects in the US. Ercot is Electric Reliability Council of Texas.
Source: BloombergNEF, US public service/utility commission filings
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