AI’s hunger for power is so vast that data center builders are dusting off industrial steam technology that predates the internet by a century to keep a $2.4 billion North Dakota facility alive while gas turbine orders sit backlogged until 2032
Image generated with artificial intelligenceThe U.S. power grid is straining under a demand surge unlike anything it has faced before. More than 12,000 active projects are currently seeking grid interconnection, representing over 1,570 GW of capacity — most of it driven by AI data centers racing to come online. The machinery developers need most, gas turbines, is backordered so deep that orders placed today may not ship until 2032.
Faced with that bottleneck, some developers aren’t waiting. They’re reaching back more than a century into industrial history for a solution the tech industry has largely forgotten — and finding it surprisingly ready for the moment.
An industry running out of time — and power
The numbers behind AI’s power crisis are striking. More than 12,000 U.S. data center projects are currently seeking grid interconnection, representing 1,570 GW of generator capacity. For context, the entire U.S. grid currently delivers roughly 1,200 GW of installed capacity. The pipeline dwarfs what exists.
As Rentech’s Gerardo Lara put it, “We expect to see many data centers opting for package boilers and steam turbines over the next couple of years.”
Analyst firm Omdia projects that AI will drive more than 50% of installed power generation capacity over the next five years. That’s not a niche forecast — it’s a fundamental reshaping of the energy landscape.
Utilities feel the pressure acutely. A Black & Veatch survey found that 53% of utilities named available power as the top obstacle to getting data centers online. Transmission constraints and substation upgrades trailed close behind, at 47% and 46% respectively. The bottleneck runs through the entire infrastructure stack.
Applied Digital CEO Wes Cummins put the turbine shortage plainly: orders placed today may not be delivered until 2032. For developers who need power in 2026 or 2027, that timeline simply doesn’t work.
A $2.4 billion bet on boilers and steam
Applied Digital isn’t waiting for the backlog to clear. The company has ordered 1.2 GW of steam turbines fed by gas-fired industrial boilers for a new North Dakota data center, with two more facilities in the pipeline — each using the same configuration.
Applied Digital signed a $2.4 billion design/build agreement with independent power producer Base Electron to bring the first facility online, scheduled to begin operation in late 2028.
Cummins describes the technology in straightforward terms. “To deal with the scale of AI, the boiler and steam turbine combination is proven,” he said. It’s not a workaround or a compromise — it’s a deliberate choice grounded in delivery timelines and operational reliability.
Why packaged boilers are winning the speed race
The key advantage of packaged boilers isn’t just the technology itself — it’s how they’re manufactured and delivered. Unlike conventional power plant equipment built on-site over years, packaged boilers arrive as factory-assembled complete systems, with burners and controls already integrated. Connections for fuel, water, and electricity are all that’s needed upon arrival.
When a unit is too large for road or rail transport, it’s modularized and shipped in sections designed for rapid on-site integration. Even then, on-site labor stays minimal compared to traditional construction.
Rentech Boiler Systems, a Texas-based manufacturer with over 1,000 boilers and heat recovery steam generators delivered across 30 years, reports it can manufacture and deliver a packaged boiler within a year of receiving an order — a fraction of the lead time for gas turbines. That track record translates directly into available capacity right now.
The gas turbine backlog — and the broader scramble for power
The gas turbine shortage isn’t limited to one manufacturer. GE Vernova has reported more than 100 GW of orders and slot reservations. Siemens Energy, Mitsubishi Power, and Solar Turbines face similar delays — even as they add shifts, invest in new manufacturing space, and streamline production.
Data center developers aren’t relying on any single solution. Gas engines are being purchased in record numbers. Fuel cells, battery storage, geothermal power, and small modular reactors are all under active exploration. The boiler-and-steam-turbine combination is a relatively recent addition to that diversified strategy, but proven technology, shorter lead times, and scalable capacity are moving it up the priority list quickly.
Steam turbines: a market poised for rapid expansion
Steam turbine production peaked near 140 GW in 2015, then fell below 50 GW by 2019 and hasn’t fully recovered. That gap suggests roughly 50 GW of latent manufacturing capacity could be unlocked relatively quickly — if demand materializes.
It’s materializing now. Global Market Insights predicts the steam turbine market will nearly triple between 2025 and 2034, with the industrial boiler market expected to follow a similar trajectory. Supply isn’t uniformly available, though. Turbines above 300 MW are increasingly contested by nuclear reopenings and combined-cycle construction, while mid-sized units still have headroom — a window that may close quickly as data center orders accelerate.
A stepping stone to greater efficiency
The boiler-and-steam-turbine setup was never designed to be the final answer. Once gas turbines become available, Applied Digital plans to convert its North Dakota facilities into combined-cycle plants. The boilers won’t be retired — they’ll be integrated into a more efficient system, supplementing steam recovered from gas turbine exhaust through heat recovery steam generators.
Rankine cycle efficiency is a known, reliable baseline. Not ideal by combined-cycle standards, but predictable, proven, and operational years ahead of when gas turbines would otherwise arrive.
Industry observers expect this model — boilers first, combined cycle later — to become a standard transitional strategy across the data center sector. As Rentech’s Gerardo Lara put it, “We expect to see many data centers opting for package boilers and steam turbines over the next couple of years.”
Carlos is an engineer with strong expertise in technical and industrial topics. He previously worked at international companies such as Siemens and is multilingual.
