Morning Energy is a syndicated note originally published through Enverus Intelligence. My contributions will also be distributed here. Please note that links frequently lead to content available only to subscribers of Enverus solutions.
LBRT got a 20% “power-up” last week. 3 GW of power projects by 2029 will do that for you. The move was the latest in the trend towards flexible power solutions - something we highlighted in our 2026 Global Outlook - which continues to mint new winners in the data center boom. LBRT, PUMP, BKR and AESI are all up more than 20% YTD. And don’t mention BE, up 75%. Flexible, quick to deploy power is in demand, and it is the oil field service companies getting the love of late.
GEV also reported last week and this line from the call stood out to me: “we don’t really view those smaller units to be competition”. We agree. Time is the competition. Large-frame combined-cycle turbines often require four to six years from contract to COD. For hyperscalers facing urgent capacity needs, these timelines are often incompatible with business requirements.
The logical response is substitution, even at higher cost: smaller aeroderivative turbines, simple-cycle units, on-site gas paired with batteries, modular and temporary solutions. Exactly what LBRT and their peers are offering, often with 15 year contracts. And there is lots more where that came from.
Are short-term substitutes a risk? GEV doesn’t think so, arguing “as the heavy-duty gas turbines are available, those smaller applications will become the reliability solution” (i.e. back-up power). I guess when your gas power equipment pipeline jumps from 62GW to 83GW sequentially, the wind at your back feels pretty firm.
But time waits for no one. Hyperscalers have explicit low- or zero-carbon commitments. Many view gas as a temporary reliability solution, not a long-term endpoint. While we wait for heavy-duty gas turbines to arrive, the hyperscalers continue to explore nuclear (META/VST, AMZN/TLN, MSFT/CEG), SMRs (META/Oklo, GOOGL/Kairos, AMZN/X-Energy), and geothermal (MSFT/Fervo). More competition is coming.
On a seemingly unrelated note, PJM just lowered is summer peak demand outlook by 4 GW, following tighter scrutiny of large‑load requests and updated economic inputs. That brought its forecast to 2028 more in-line with our views. Looking beyond, the outlook remains overstated relative to our forecasts, a victim of the land grab and optionality sought by data center developers trying to meet the demand for AI compute.
Downward load forecast revisions foreshadow the risk of the most optimistic outlooks for gas fired generation. 43 GW of GEV pipeline are SRAs (slot reservation agreements), primarily for those years beyond 2028 that house the most speculative of data center projects in ISO load queues. As reality bites - and the options those queue positions represent expire - how many of those SRAs fall away? How much leverage do those short time-to-power solutions gain from their incumbency?
Gas remains indispensable to the power mix. The gas-fired boom is real and it will underpin the build-out of AI data centers. But it will also show up differently than many expect. Time-to-power constraints are pushing key customers, especially hyperscalers, toward faster, smaller, and more modular solutions. And those same customers are likely to adopt zero-carbon baseload as soon as it becomes credible. Place your bets on gas, but place them carefully.