Xcel Buys Turbines From Siemens Energy for Gas Plants in Texas
(Bloomberg) -- Xcel Energy Inc. agreed to buy natural gas turbines — among the most sought-after equipment in energy markets today — from Siemens Energy AG to power two power plants in West Texas.
The boom in artificial intelligence is driving a surge of new electric demand, which has contributed to a global shortage in gas turbines. Natural gas is a favored fossil fuel, since it can be used as a round-the-clock fuel that’s cleaner than coal and easier to build than nuclear.
Xcel plans to install five of the turbines at a 1,200-megawatt plant it’s building in Gaines County to kick in when demand peaks, the companies said in a statement on Wednesday. Another five turbines will help Xcel power a roughly 930-megawatt facility on the site of a coal plant the utility plans to close in Bailey County.
The companies didn’t disclose the purchase price for the turbines, which have combined capacity to power about 500,000 homes. Siemens Energy will deliver the first of the turbines in early 2026 and the new plants are expected to supply the central US grid operated by the Southwest Power Pool, which serves more than 18 million people in 14 states.
Xcel is building the plants as Texas faces unprecedented demand for electricity from data centers, oil production and the state’s overall economic growth. The region, like much of the US, has aging infrastructure that’s increasingly being tested by extreme storms and wildfires. Now demand for AI is adding to the strain, forcing companies to quickly upgrade the grid while trying to keep power reliable and affordable for customers.
As a result, orders for gas turbines are increasing, with Siemens Energy, GE Vernova Inc. and Mitsubishi Heavy Industries Ltd. ranking as the dominant manufacturers of large gas turbines.
Mitsubishi Power Ltd., a key supplier of gas turbines used to generate electricity, said last month that it expects demand for the equipment to remain “very high” for the next three to five years as the world builds out power-hungry data centers.
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