Second-quarter global gas turbine orders reached approximately 38GW, a historical quarterly high

Overview

This report is J.P. Morgan's quarterly gas turbine trend tracker, combining global orders, capacity expansion by major equipment suppliers, North American gas power project costs and third-party installation forecasts. The core view is that gas turbine demand remains in a strong upcycle: second-quarter 2026 orders reached a historical record, demand for large advanced units and data center behind-the-meter power solutions grew simultaneously, and suppliers able to deliver equipment in the near term have clear competitive advantages.

Core views

First, global gas turbine order momentum continues to strengthen, with orders of approximately 67GW in the first half of 2026. At the current pace, full-year orders could reach approximately 120GW, above approximately 100GW in 2025. Second, the demand structure is not simply shifting from large units to distributed solutions; H/J-class advanced gas turbine orders are growing faster than the overall market, while behind-the-meter power is creating additional incremental demand. Third, major manufacturers are generally maintaining capacity-expansion discipline. Global annual capacity of approximately 85GW in 2028 remains below the current annualized order level, but GEV and MHI's longer-term capacity increases could bring capacity close to more than 95GW after 2030. Fourth, capital expenditures for gas power plants continue to rise. Equipment scarcity, engineering costs and delivery cycles support supplier pricing power, but may also affect project economics and the pace of final implementation.

Analysis framework

The report compiles global gas turbine award data by quarter and analyzes market share and growth by equipment supplier, region, country and turbine model; estimates the capacity of major equipment suppliers based on company announcements, earnings-call information and historical orders; aggregates 78 North American natural gas power projects with disclosed cost information to build a cost tracker; and finally compares EIA, NextEra Energy, BNEF and McCoy data to assess the gap between U.S. gas-fired power installation demand and awarded projects.

Methodology notes

• Industry cycle analysisQuarterly order trend tracking

  Use order size and year-over-year and quarter-over-quarter changes to measure demand strength in the gas turbine industry.

  Orders are uniformly calculated on a simple-cycle capacity basis and do not include capacity contributed by steam turbines or heat recovery steam generators; they are also broken down by equipment supplier, region and advanced turbine model to identify demand sources and changes in market share.

• Supply capability analysisBottom-up estimate of equipment supplier capacity

  Estimate global annual gas turbine capacity based on corporate capacity-expansion announcements, historical orders and efficiency-improvement plans.

  The report evaluates the capacity paths of GEV, Siemens Energy and MHI separately, and references McCoy survey data for other manufacturers; some companies disclose using a combined-cycle basis, which is converted to a simple-cycle basis in the analysis to improve comparability.

• Cost and pricing analysisNorth American gas power project cost tracker

  Observe capital expenditure trends for combined-cycle and simple-cycle power plants through publicly disclosed project costs and commercial operation dates.

  The sample includes 78 North American natural gas projects with disclosed cost information. Public disclosure scopes are not fully consistent, and the report makes adjustments where necessary; chart dates refer to project commercial operation dates rather than gas turbine delivery dates. For combined-cycle projects, it can typically be assumed that approximately 6 to 9 months elapse between gas turbine delivery and completion.

• Demand forecastingCross-comparison of multiple forecast sources

  Compare third-party installation forecasts with awarded capacity to evaluate the room for U.S. gas-fired power construction.

  The report compares EIA, NextEra Energy, BNEF and McCoy methodologies, and uses a 1.5x factor to convert simple-cycle capacity into total combined-cycle capacity. McCoy data represents awarded projects rather than a complete forecast, so it is expected to gradually converge toward third-party forecasts as new orders are placed.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• GE Vernova (GEV)

  Core supplier of large gas turbines, rated Overweight by J.P. Morgan.

  Strengths

  Received approximately 11.3GW of orders in the second quarter, with strong demand for advanced large units; efficiency improvements could lift annual gas power output to approximately 30GW by 2030.

  Weaknesses

  Rapid longer-term capacity increases could weaken market expectations for scarcity and sustained pricing.

  Comparison

  Together with Siemens Energy and MHI, it constitutes the world's three major large gas turbine suppliers.

  Risks

  Capacity-expansion execution, supply-chain constraints, cost overruns and potential oversupply after 2030.

• Siemens Energy (ENR1n.DE)

  Core supplier of large gas turbines, rated Overweight by J.P. Morgan.

  Strengths

  Second-quarter orders were approximately 12.5GW, the highest among manufacturers listed in the report; the company plans to gradually increase large gas turbine capacity and emphasizes capacity-expansion discipline.

  Weaknesses

  Some company disclosures use a combined-cycle basis, so comparable simple-cycle capacity requires analytical assumption adjustments.

  Comparison

  Its current order scale leads GEV and MHI, but its share price is relatively sensitive to competitors' capacity expansions and concerns about longer-term supply.

  Risks

  Market concerns about longer-term overcapacity, quarterly order volatility and project execution risks.

• Mitsubishi Heavy Industries (MHI)

  One of the world's three major suppliers of large gas turbines.

  Strengths

  Second-quarter orders were approximately 5.3GW, and it plans to raise capacity from 2030 to 150% of the originally planned level.

  Weaknesses

  The additional longer-term capacity does not yet require a clear capital-expenditure commitment, and there is uncertainty around timing and scale of realization.

  Comparison

  Its order scale is below GEV and Siemens Energy, but its longer-term capacity-expansion potential is significant.

  Risks

  Capacity-expansion delays, changes in capital investment and weakening longer-term industry supply-demand conditions.

• Caterpillar Inc. (CAT) and Solar Turbines

  Directly benefits from data center behind-the-meter power demand through Solar Turbines; CAT is rated Overweight by J.P. Morgan.

  Strengths

  Solar's second-quarter orders were approximately 2.8GW, significantly above its recent quarterly run rate, with approximately 1.9GW from data centers.

  Weaknesses

  Products are more oriented toward small- to mid-sized and distributed scenarios, and its single-unit scale and coverage of large centralized projects are weaker than those of the three major large gas turbine manufacturers.

  Comparison

  It has greater advantages in short-lead-time behind-the-meter power, forming a complement rather than a complete substitute for large units.

  Risks

  2027 delivery execution, data center project delays and changes in distributed power policies.

• Baker Hughes (BKR)

  Gas turbine and energy equipment supplier, rated Overweight by J.P. Morgan.

  Strengths

  Second-quarter orders were approximately 2.3GW, up approximately 89% year over year, benefiting from demand for small- to mid-sized gas turbines and distributed power generation.

  Weaknesses

  Its market share and absolute order scale are below those of the three major large equipment suppliers.

  Comparison

  Together with Solar, it is an important source of supply outside large gas turbines, although Solar had higher orders this quarter.

  Risks

  Order concentration, energy-cycle volatility and project delivery risks.

• Argan (AGX)

  A gas power engineering and construction-related name, rated Overweight by J.P. Morgan.

  Strengths

  Expansion in U.S. gas power new installations and project construction activity is favorable for engineering contracting demand.

  Weaknesses

  It is not a gas turbine original equipment manufacturer and is more directly affected by project starts, cost control and customer capital expenditures.

  Comparison

  Compared with equipment suppliers, its revenue sources are more tilted toward power plant construction and project execution.

  Risks

  Project delays, cost pressure from fixed-price contracts and U.S. new installations below expectations.

Key data

• Second-quarter 2026 global orders37.6GWUp 71.2% year over year and 28.7% quarter over quarter, setting a historical quarterly record.
• First-half and full-year 2026 ordersApproximately 67GW in the first half; possibly approximately 120GW for the full yearFull-year 2025 orders were approximately 100GW.
• Second-quarter U.S. ordersApproximately 18GWUp approximately 49% year over year, continuing to maintain its position as the world's largest market.
• H/J-class advanced gas turbine ordersApproximately 19.8GWUp approximately 93% year over year, faster than the overall global gas turbine market.
• Market share of the three major equipment suppliersApproximately 77%The combined share of GEV, Siemens Energy and MHI was broadly flat versus the first quarter.
• Second-quarter orders for major manufacturersENR 12.5GW; GEV 11.3GW; MHI 5.3GW; Solar 2.8GW; BKR 2.3GWBoth large units and behind-the-meter power solutions performed strongly.
• Solar data center ordersApproximately 1.9GWApproximately 86 units at about 23MW per unit, accounting for most of Solar's approximately 2.8GW of second-quarter orders, with delivery expected in the second to third quarters of 2027.
• Global gas turbine capacity forecastApproximately 85GW in 2028; close to or above 95GW after 2030The latter includes GEV efficiency improvements and MHI's longer-term capacity-expansion potential, both estimated on a simple-cycle basis.
• North American combined-cycle project costsApproximately $2,800 to $3,000/kWDiscussions for some early-2030s projects indicate total costs could exceed $3,000/kW.
• Increase in gas power plant costsCombined cycle up approximately 200%; simple cycle up approximately 50%Costs for combined-cycle projects with future commercial operation dates have risen sharply relative to 2025; the main text refers to the relevant future commercial operation years as 2030 and 2031, respectively.
• U.S. gas capacity forecast before 2030EIA and NextEra Energy approximately 85 to 90GW; BNEF approximately 46GWAll are on a combined-cycle capacity basis; BNEF assumes higher penetration of renewable energy and peaking units.

Impact & implications

Strong orders, limited near-term equipment supply and rising project costs imply that equipment suppliers with proven large units, distributed product portfolios and reliable delivery capabilities may maintain high capacity utilization, order visibility and pricing power. Data centers need rapid access to stable power, further expanding the behind-the-meter power market while not weakening demand for large combined-cycle units. For investors, GEV and Siemens Energy benefit more directly from the large gas turbine cycle, Solar under Caterpillar and Baker Hughes benefit from small- to mid-sized and behind-the-meter power demand, and Argan benefits from gas power engineering and construction activity. However, if longer-term capacity expansions are released in a concentrated manner, they could trigger concerns about oversupply around 2030.

Risks

• Capacity expansions by GEV, MHI and other manufacturers could be released in a concentrated manner around 2030, potentially leading to longer-term overcapacity and pricing pressure.
• Orders exhibit clear quarterly volatility, and a record single-quarter performance cannot necessarily be extrapolated linearly.
• Rapid increases in equipment, engineering and financing costs could reduce the economics of gas-fired power projects and delay final investment decisions.
• Supply-chain, skilled-labor and manufacturing bottlenecks could affect equipment delivery and the realization of capacity expansion.
• U.S. gas installation forecasts vary widely; higher-than-expected penetration of renewable energy, energy storage and peaking units could suppress gas turbine demand.
• Data center behind-the-meter power orders are concentrated in a few large projects, and delays in load build-out could affect the delivery pace.
• Different companies and data sources use simple-cycle or combined-cycle bases; if conversion assumptions change, capacity and installation comparison results could shift.
• The report's covered names have disclosed relationships with J.P. Morgan involving market-making, clients, investment banking business or holdings, and investors should make prudent judgments in conjunction with the conflict-of-interest statements.

What to watch

• Whether global orders in the second half of 2026 can bring full-year orders to approximately 120GW.
• Quarterly changes in U.S. orders, H/J-class advanced units and the combined market share of the three major equipment suppliers.
• Implementation of GEV's approximately 30GW longer-term output target, MHI's 2030 capacity-expansion plan and Siemens Energy's capacity-expansion discipline.
• Whether Solar's approximately 1.9GW of data center orders can be delivered as planned in the second to third quarters of 2027.
• Whether North American combined-cycle project costs continue to break through $3,000 per kilowatt, and the impact of cost increases on project starts.
• The pace at which equipment order slots are filled from 2028 to 2030 and awarded capacity converges toward forecast levels from EIA, NextEra Energy and others.
• The extent to which changes in penetration of renewable energy, energy storage and peaking units substitute for U.S. gas installation demand.
• Whether large units and behind-the-meter power solutions continue to grow complementarily or begin to show demand substitution.