AI usage is booming worldwide. Hundreds of millions of people use consumer services such as ChatGPT every day. Businesses, too, are using AI tools and agents in record numbers. All that traffic is being directed to massive AI data centers.
According to analyst firm Industrial Info Resources (IIR), there are around 8,000 active data center projects in the planning, engineering, or construction stages, amounting to close to $3 trillion in investment and nearly 300 GW of capacity. About half are in North America and the rest are spread to all corners of the globe. Increasingly, these “AI factories” require more than 1 GW of power fed to them.
“AI will drive more than 50% of global data center capacity and more than 70% of revenue opportunity,” said Omdia’s Research Director for Digital Infrastructure, Vlad Galabov.
Data center annual capital expenditure (CAPEX) investments should top $1 trillion globally by 2030, added Galabov, up from under $500 billion in 2024. Physical infrastructure is getting the bulk of the spending, particularly power as there isn’t enough spare capacity power around.
“Many utilities are struggling to deliver the necessary power to AI factories,” said Galabov.
Hence, data center developers and hyperscalers like Amazon, Google, Meta, and Microsoft are scrambling to find power from wherever they can. They are buying up all the gas turbines and gas engines they can find, investing in nuclear small modular reactors (SMRs), adding fuel cells and battery energy storage systems (BESS) to their data center designs –and increasingly, looking to deploy gas-fired boilers and steam turbines in their facilities.
“Lead times for a packaged boiler are a year or less,” said Gerardo Lara, Vice President of Boiler Sales at Rentech Boiler Systems of Abilene, TX, whose company has sold more than 1000 boilers and heat recovery steam generators (HRSGs) over the last 30 years. “With demand for power so high, a packaged boiler can be used to feed steam to a steam turbine to generate energy at typical Rankine cycle efficiency.”
Finding Power Now!
AI factory developers are in a race for dominance. Out of the many AI companies in existence today, a couple are likely to emerge as the victors in the fight for supremacy. But AI requires mind-boggling amounts of power. Data center buyers have already ordered every gas turbine available and have sent delivery dates for many turbines beyond 2030. Similarly, the delivery dates for gas engines are beginning to grow as the orders flood in. Now developers are turning their attention to a tried and tested way of generating power. The boiler and steam turbine combo has been around since the 19th century, although the technology has steadily been improved over the nearly 150 years since Charles Parson first invented the modern steam turbine generator as a means of producing electricity from high-pressure steam.
Steam turbines are now available as big as nearly 2 GW and as small as a few kilowatts. The list of manufacturers is long. It includes Siemens Energy, GE Vernova, Mitsubishi Power, Bharat, Triveni, Ebara Elliott, Toshiba Energy, Shanghai Electric, Howden, and Arabelle Solutions. Such machines are generally used to produce nuclear energy, in gas generation, geothermal, and concentrated solar power facilities. Now steam turbines are being included in projects to power large data centers
Siemens Energy, for example, received an order to provide steam turbine generator sets for the 1.2 GW AI factory of data center developer and operator Applied Digital. The plan is to use natural gas-fired boilers to supply steam to drive steam turbines and generate energy. It is expected to go online by the end of 2028.
“This ensures we have the proven technologies and trusted expertise needed to meet our aggressive timelines,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. “This agreement gives us confidence that we can deliver the capacity needed to support the next generation of AI infrastructure, and we look forward to working with the teams from both of these outstanding companies.”
Packaged Boilers
Historically, many boilers were built onsite. This continues to be done, particularly for very large and one-of-a-kind installations. But increasingly, factory made modularized or standardized boilers are becoming the norm. Some boiler manufacturers turn out the same series of models over and over.
An alternative approach is to engineer them for specific sites but make them in the factory. These pre-engineered packaged boilers are self-contained and are shipped onsite fully assembled with all necessary burners, controls, and accessories required for steam generation. This makes installation far faster and minimizes onsite work. Packaged boilers have grown in popularity and are used across almost every industry including manufacturing, chemicals, food processing, and oil & gas.
“There are two basic design types for packaged boilers: fire-tube and water-tube,” said Lara “The former is generally better for smaller loads and commercial use cases whereas the latter is typically for industrial use cases that need higher pressures and temperatures.”
What has attracted data centers is the relatively simple and proven method of power generation they provide. The packaged boiler burns natural gas to heat water, which is then turned into steam. Tubes, channels, and drums inside the boiler transform the steam into type required then feed it to a steam turbine at the right temperature and pressure needed to generate electricity.
In some cases, the plan is to use the boiler/steam turbine arrangement for permanent power. But in others, the idea is to add gas turbines once they become available and transform the facility into a combined cycle plant. The boilers will continue to provide steam to supplement what is produced from exhaust heat from the gas turbine inside an HRSG. This will raise the thermal efficiency from about 40% to above 60% in many cases.
This is the goal at the Applied Digital data center in North Dakota. Applied Digital has already built two AI data centers in the state – in the towns of Ellendale and Harwood. Another is planned near Bismark and two more are being lined up. Cummins said he plans to use 1.2 GW of boilers and steam turbines in at least three sites in the state. He will take delivery of gas turbines when they are available – he believes it might not be until 2032 or 2033 due to the backlog – and convert the facilities to combined cycle power plants. But the boilers will remain operational too.
“To deal with the scale of AI, the boiler and steam turbine combination is proven and can currently be delivered faster than other generation solutions,” said Cummins.
Fast Boiler Delivery
The existing supply chain for industrial boilers is mature, extensive, and can has enough leeway to cope with a data center order boom. As the industry has been through plenty of ups and downs, and as there are so many boiler manufacturers across the world, it has the capacity to supply boilers in high numbers and rapidly for the next year or two. That said, boiler manufacturers are likely to announced expansion and ramp up plans as they receive more orders from AI factories.
Lara said that Rentech Boiler Systems, for example, can manufacture and deliver a packaged boiler within a year of receiving an order.
“We have been ramping up our delivery potential as we expect to see many data centers opting for more packaged boilers and steam turbines over the next couple of years,” said Lara. “After all, the packaged boiler is the workhorse of a great many industries, the market is strong, and when combined with a steam turbine, they offer good efficiency.”
His company typically engineers its boilers conservatively. This includes large furnaces to ensure optimal circulation, efficient heat transfer, and the delivery of plenty of steam while meeting emission guarantees. Its boilers are built with water-cooled, full membrane wall construction providing low maintenance. Its steam drums are designed with high retention times and robust steam separation internals.
How long might it take for equipment to arrive at a new data center? Steam turbines are likely to have a faster delivery schedule than gas turbines in the current market. The very largest units are most likely to have the slowest delivery dates due to their scale and high demand as they are the one specified for new nuclear facilities and massive combined cycle facilities. However, smaller and midsized steam turbines should have high availability.
Lara said Rentech offers packaged boilers that can produce anywhere from 20,000 pounds per hour to 650,000 pounds per hour of steam at pressures from 200 to 2,000 psi. He added that its packaged boilers are best suited for steam turbines in the 10 MW to 20 MW range. Modularized designs, he added, can accommodate steam turbines up to 50 MW.
“We have been busy over the past year with lots of projects being done,” said Lara. “A series of package boilers and steam turbines can be installed in one location to provide power for any data center.”
Author:
Drew Robb
Lead Writer
Robb Editorial
