Mitsubishi Heavy to double gas turbine capacity as demand soars

[TOKYO] Mitsubishi Heavy Industries aims to double its gas turbine capacity in the next two years as demand for the equipment rises globally due to replacement and data centre needs.

The Japanese manufacturer is seeing orders multiply due in part to turbines installed decades ago nearing the end of life, chief executive officer Eisaku Ito said on Friday (Aug 29).

“We were working towards boosting production capacity by 30 per cent, but that’s not enough to meet growing demand,” Ito said. “Fulfilling those orders is our top priority.”

The decision comes at a time when demand for gas turbines has increased globally, due to the proliferation of data centres, new manufacturing and continued electrification. Natural gas is seen as a stable alternative to wind and solar power, one that’s also cleaner than burning coal, and more readily available than nuclear energy. Other manufacturers, such as GE Vernova, are also seeing an increase in orders for turbines.

Mitsubishi Heavy is working to expand output by improving the efficiency of its production chain, he said, even as the cost of making turbines has nearly doubled in the past few years due to expensive materials, supplies and staffing.

Boom and bust cycles in turbine demand make long-term investments a risky bet, with varying forecasts on the speed and size of future demand from data centres. Mitsubishi Heavy’s spending will remain judicious, Ito said. “The goal is to be as lean as possible,” even though demand should remain strong over the next decade, he added.

Mitsubishi Heavy, which manufacturers everything from forklifts to heavy payload rockets, is one of the biggest turbine makers in the world. Ito took over as the head of the firm earlier in April.

Earlier this month, Mitsubishi Heavy was selected as a preferred bidder to build a fleet of warships for Australia, the first of its kind for the company and a boost for Japan’s ambitions to become a major exporter of military equipment.

“These are far more complicated to make than other kinds of ships,” Ito said. “But if such needs arise at the national level, we will strive to meet them.” BLOOMBERG