Companies that make small, quick-to-deploy natural gas turbines and generators will benefit as surging demand for electricity from data centers significantly slows the addition of new capacity to the grid, according to Morgan Stanley. He says he is ready to accept it. Morgan Stanley analysts have told clients that much of the U.S. power grid is expected to hit a “brick wall” in 2025, when the size of proposed data centers will be It said it would “significantly exceed” the ability of grid operators to connect projects to electricity supply. In Monday’s research notes. Analysts told clients: “We believe that increased appreciation of current grid connectivity challenges will drive investor interest and focus on new ‘time to power’ solutions.” Stated. Texas is Exhibit A of the magnitude of the challenge. Power projects waiting to connect to the Lone Star State’s power grid have jumped from 17 gigawatts to about 40 gigawatts in less than two years, analysts said. Morgan Stanley says there are also long wait times for diesel-powered backup generators for new data center projects. As a result, the popularity of small natural gas turbines based on technology used in jet engines could surge, with manufacturers GE Vernova and Siemens Energy benefiting, the investment bank said. These “aero-derivative” gas turbines can be installed in a matter of weeks. Morgan Stanley said companies like Cummins and Caterpillar also stand to benefit because they make natural gas generators to provide backup power on-site. Siemens Energy shares have nearly doubled this year, and spinoff GE Bellnova, which began trading in April, has risen 18% in the past month. Cummins is up nearly 19% this year, with Caterpillar leading by nearly 23%.
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