Mitsubishi Power CEO Bill Newsom on AI, Gas Turbines, and the Path to Decarbonization

Bill Newsom: Let me give you some thoughts. I’ve been with Mitsubishi 21 years now, and in the industry for over 30 years—and I’ve never seen it like it is right now.

I had a really busy week last week, meeting with three or four different large utility CEOs, one smaller [investor-owned utility (IOU)] CEO, a CEO of an [engineering, procurement, and construction (EPC)] company—just talking with all of them about the challenge ahead of us. One of them had a pretty interesting perspective. He said, “We’re writing a book—and this is a future chapter.” He’s a chief operating officer for a large utility in the Southeast, and he talked about the book we’re writing ahead of us. I truly agree with him. I lived through the last combined cycle boom and bust, and that had totally different business fundamentals. You had independent power producers (IPPs) chasing gas prices that had gone up, and the spark spreads didn’t represent the plan for the growth.

Every day, I wake up trying to understand: How big is this market? How long is this gas boom going to last? Is it a boom with a bust, or is this sustained growth for the long term? I think the business fundamentals are significantly different than they were in the early 2000s and late 1990s. We have hyperscalers with multi-trillion-dollar market caps who are in this AI technology race, revolutionizing how we live our day-to-day lives. One of the Amazon folks told me recently that only 15% of the total global data is currently in the cloud.

So, that gave me some confidence that we’re not at the bottom of the iceberg—we’re really at the tip of the iceberg and really one of the longest poles in the tent right now is electricity. That’s the lifeblood of our society. It powers our homes and our businesses. It drives our economies around the world. It actually enables technology advances like AI that can continually improve our daily lives.

POWER: How is Mitsubishi Power adapting its investment strategy to meet that kind of near-term demand, while still planning for long-term decarbonization?

Bill Newsom: The drive to find more electricity is something we’re really focused on. In the last combined cycle boom, we had about 55 gas turbines canceled—we had overbuilt capacity. My bosses in Japan remember that. So we have to be very pragmatic about how we add capacity to ramp up.

We are focused on investing. You’ve heard us publicly say that, as a company, we’re growing our total global supply of gas turbine equipment by 30%. And you can’t just flip a switch and do it overnight. It takes investing in factories, investing in our supply chain, and investing in human resources, which is a big part of it.

We have a half-million-square-foot facility in Savannah, Georgia, and we’re going to ramp up significantly more there. It’s really more of an investment in human resources than in infrastructure in Savannah, but we’re also relying on investments in hot parts—blades, vanes, discs, casings, rotors. Those are things that a lot of our supply chain also has to invest in. One thing I want to continue to emphasize is: not only are we doing everything we can to bring more electrons to the grid today—as soon as possible—but we’re also not stopping our investment in decarbonization. That’s something we’re very passionate about at Mitsubishi.

We have a Mitsubishi Heavy Industries and Mitsubishi Power Americas. We have a commitment to net zero by 2040. We’re developing technologies and solutions for our customers to meet their goals of net zero by 2050. We have our Advanced Clean Energy Storage (ACES) Delta project out in Delta, Utah—long-term storage and green hydrogen.

We’re developing and testing four different hydrogen production technologies right now at T-Point in Japan, at our full operational 1-on-1 combined cycle power plant and hydrogen park. We’re going to continue to do that and then bring it to market at the appropriate time.

Today, hydrogen is not the right answer—but maybe a decade from now, hydrogen will come down that cost curve. I think it’s a little bit like what we saw with renewables two decades ago. They were very expensive, but over the last two decades we’ve come down that curve, because we invested in technologies and advanced manufacturing. I think that’s where we are with the carbon products as well.

POWER: Let’s talk about what you see from the utilities. You’ve made major progress on hydrogen and ammonia combustion—including a 50% blend at Plant McDonough. What role do demonstrations like that play in reducing risk for utilities evaluating advanced gas turbines?

Bill Newsom: Well, I’m going to answer that in a roundabout way. You know, we’re not doing a lot of direct contracting with hyperscalers or co-locators and data center developers. Most of our work is through investor-owned utilities, municipalities, and co-ops. But what’s happening is those customers need to provide electrons for the hyperscalers—and we’re seeing huge demand growth from three areas. One is AI and machine learning—that’s probably 40% to 50% of the overall growth. This overall demand growth, and then the rest, really is traditional industrial growth. We have a utility that has a steel facility that’s being built in Texas, LNG export being built. So traditional industrial growth, as well as the third one being electrification.

So they need electrons as quickly as they can get them. That’s why we’re working in close partnership with utilities to understand what their needs are. What is their in service date? That’s really the the question. And so we’re working in a very collaborative mode to address how do we meet those needs today.

What’s really interesting in this whole approach is the fact that the hyperscalers have a social requirement that they’re committed to. They’re committed to winning the AI race today, and that means they need electrons today—the best way they can get them—but they want a path to clean.

So I really feel the hyperscalers are going to be the accountability partners for the utilities. Not only will the utilities continue to maybe extend coal life, but also build a lot of new gas, also put in renewables. But as they contract with them today, there’s an agreement that they have to find and provide a path to clean. It might not be one year from now—it might be five or ten years from now.

So those utilities—our direct customers—are working on the solutions for a path to clean. And part of what we’re focused on is: how do we bring the right product and solution to meet the electron needs today, but also give them that path of certainty for tomorrow?

That means we bring a JAC gas turbine online and utilize natural gas today to make those electrons—but they know they don’t have a stranded asset. They don’t have this “asset anxiety syndrome,” meaning it’s only going to be good for five or ten years and then they have to invest in something else. They know this asset can be upgraded.

We can upgrade it to put low-carbon fuels on the front end—in the form of green hydrogen, blue hydrogen, or ammonia—on the smaller machines, maybe not the JAC machine today, but our smaller H-25 machine, as you noted. And then, what can we do on the back end with our carbon capture technology to give them a solution so they can put that in the ground and not have to disrupt or reinvest in a new asset?

That, I think, is what’s so exciting about today: we’re charting a path that solves today’s problems, but we’re still focused on tomorrow’s problems.

POWER: Given the brutal combination of permitting volatility, supply chain constraints, labor shortages, and cost inflation, how is Mitsubishi Power working to de-risk gas turbine deployments for utilities facing aggressive in-service targets? What does it take to deliver certainty in an environment where everything feels uncertain—especially on timelines and decarbonization compliance?

Bill Newsom: Today, there are two things: one is uncertainty, and the second is risk. How do we balance those two aspects?

Uncertainty—we’ve got federal, state, and local government changes in how they approach things, and they can sometimes pull the rug out from underneath you. You may have a very good plan as a utility, but you’ve got to be able to be flexible and address those changes in the market. And that’s hard. That’s a really tough aspect.

Then the second part is managing the risk. That means having supply chain certainty to meet demand and in-service date guarantees in an environment where the supply chain was already challenged—and now it’s exponentially challenged.

You’ve also got a labor pool where everybody’s trying to build at the same time, and inflationary costs are going up. All those challenges are risks we need to address to meet those in-service dates.

And then the second part of that risk is: how do we manage decarbonization and the path to clean in the most cost-effective and lowest-risk way?

Our approach—our DNA at Mitsubishi Heavy Industries for 140 years—has been to design, test, develop… design, test, validate, and bring to market a product that we know we can stand behind. It’s not going to fail.

That’s why we spend billions of dollars on our own 1×1 combined cycle power plant and our own hydrogen park—so we can go to our customers and contract with them to minimize risk. Minimize their risk. Minimize our risk. And have certainty that these technologies will work. That’s really why we’re doing what we’re doing. And demonstrating 50%, even in a market condition that doesn’t look good, is part of that.

Let me give you one more comment. One of the bold aspects of Mitsubishi Heavy that I’ve really appreciated in my 21 years here is that we’re not fly-by-night, just investing when it looks good. We built a $300 million facility in Savannah, Georgia—half a million square feet—in 2008 and 2009, when the market had tanked. We’ve invested in over a million square feet of manufacturing facilities in the U.S. over the last 25 years, in times when the market wasn’t robust—certainly not crazy like it is today.

So that focus on continuing to invest in the solutions and technologies for today and tomorrow is what excites me.

POWER: Our readers would be disappointed if I didn’t ask: What does your current pipeline look like? When can we expect delivery of new turbines, and is there a delay?

Bill Newsom: Well, I don’t know about calling it a delay—so let me answer the question a little differently.

Before this big boom, we were looking at lead times for combined cycle gas turbine equipment in the neighborhood of 16 to 20 months. A utility customer would need to contract and release—sign a contract, put hard money down—and get into a manufacturing slot within that timeframe. At that time, we weren’t even selling slots.

Today, we’re seeing customers looking to contract 36 to almost 40 months in advance. So think about that for a minute—before it was, let’s just say 18 months. Now you’re at 36 months. That’s a big change.

Now, it’s not that it takes longer to manufacture. That’s not the case. It’s that demand is outpacing supply. All three OEMs cannot currently meet the demand with the supply we have. Globally, between the three of us, we can do about 60 GW a year. But now we’re seeing almost 25 GW of gas turbine demand in just North and South America. A few years ago, that number was only 3 GW.

So think about that: we’re ramping up from 3 to 25 GW—just in gas turbines. I’m not even talking about combined cycle.

So yes, we’re selling out through 2027, 2028, 2029—we’re still taking orders for 2030, 2031, and 2032. We have customers looking to contract all across that 2027 to 2032 window.

It’s really a matter of sitting down with each customer and managing: okay, where do we have a slot opportunity, how does that line up with their need, and is there any flexibility with their in-service date? Just this past week, when I met with executives from several IOUs and an EPC company, we talked about how dramatically the market has shifted.

Before, when we had an 18-month lead time, the sequence was: you needed a site with gas, interconnect, and water all lined up; then you needed equity and debt ready to deploy. Once you had those five components in place, that’s when you went to find a gas turbine supplier. After that, you found your EPC. Today, it’s flipped. Now, you have to find the gas turbine supplier first. Then the EPC. Then you figure out the rest—your site, your interconnects, your money. The capital comes last.

That’s an amazing change in the market. And I haven’t seen anything like it in my 30-plus years in the industry.

POWER: Mitsubishi Power has a uniquely global vantage point—rooted in Asia, active across regions. From your perspective, what lessons—whether technical, financial, or policy-related—can the U.S. or Europe learn from places like Japan or China, where clean energy progress is unfolding rapidly, but often for very different reasons?

Bill Newsom: Well, I think the U.S. has really been setting the pace for the last five years. It started with the IRA and the investment in decarbonization, and the rest of the world was following. So we set that pace.

Then AI became the next big, major topic, and it’s really pushed decarbonization—not into the background entirely, but it’s no longer in the forefront. The new forefront is providing electrons as quickly as we can to meet the current demand needs to win the AI and machine learning race globally—and that’s happening here in the United States.

First, decarb happened here in the U.S.—yes, there was some in Europe, and there’s been a big push for renewables in South America, some push in other regions. But we’ve been doing that for two decades here. I think the IRA commitment was really the driver that led the rest of the global economies, and now we’re into a new generation.

To give you a point on that, reservation agreements are something we haven’t really seen since the late 1990s to early 2000s. And we’re not seeing those globally right now—they’re still generally following a bid process. There are some reservation agreements, but not to the extent we’re seeing here in the U.S.

Our parent company, Mitsubishi Heavy Industries, is deeply committed to the Asian market, and the North and South American markets are probably the top two regions we focus on. The European and Middle Eastern markets are also very important and are growing significantly.

So it’s really a matter of understanding the conditions that will allow a project to stay on schedule and be realized. That means understanding the differences in each region—what drives execution—because we don’t have enough manufacturing capacity to meet total global demand.

We have to be sure. The worst thing we can do is let a manufacturing slot go unused because we thought we had a good project—say, with Developer X in South American Country X—and suddenly they didn’t get permits or couldn’t secure equity. Then we’re scrambling to backfill that slot somewhere else.

And I mention that because we just had something like that happen. So balancing all that provides a challenge—but also an opportunity for others.

POWER: We’ve talked about surging demand and long lead times. But even if customers secure turbines, many still face major roadblocks, especially on infrastructure. Gas pipelines, interconnections, water access—these are increasingly tied up in regulatory gridlock. As an OEM, how do you view these non-equipment risks? What happens to your delivery certainty and your customers’ timelines if the rest of the project can’t keep pace?

Bill Newsom: You are spot on—absolutely. That was a lot of the conversation we had this week.

As an OEM, if I just put my focus on what we bring to the market and don’t work to understand the different impacts needed to make a project a reality, then I think we’re going to be surprised—and we’re going to have more risk. So a lot of the time we’re spending now is making sure we understand those challenges our customers are dealing with. And you’re right—natural gas. Can we get gas? A pipeline or lateral built to Project X? Because the overall project has to go forward. But if we don’t have gas, we’re not going to hit that in-service date to make electrons.

Likewise, if we don’t have labor or an EPC [engineering, procurement, and construction] partner to build it on time, we’re not going to make the in-service date. So bringing certainty to all of those aspects is something we’re really working on—making sure we understand.

We’re collaborating with our utilities—for example, our big customers like Southern Company, Entergy, Ameren, AEP, Duke. We’re trying to understand what some of their regulatory challenges are in each state.

For example, we had a hyperscaler that was going to go to one state. They spent $100 million—and the state came back and said it was going to be a year before they could get all those permits approved to build. They flushed $100 million down the drain and moved to another state. In that state, they changed five laws in one day—including tax laws—to create an environment that enticed the hyperscaler to come and really drive economic growth. That’s been something we’ve really enjoyed seeing.

I was recently at a groundbreaking in Delta, Mississippi, where Entergy is shutting down a 50-year-old steam plant and building a new gas plant. There’s a hyperscaler investing in that state—and to see the economic growth firsthand, from the local community and how grateful and excited they were, was something really impactful for me to see.

POWER: Utilities today are being squeezed from all sides—rate pressures, decarbonization targets, and the imperative to maintain reliability. Inflation, interest rates, and technology costs aren’t helping either. Given the long-term role gas is expected to play as a firming resource, how should utilities be thinking about the future cost of gas power? Can it remain cost-competitive—especially as renewable-plus-storage continues to evolve?

Bill Newsom: Yeah, I think—really good point. And the cost [of gas power] has risen. You’ve seen a couple utilities, you know, CEOs mention that. [The] NextEra CEO recently talked a lot about how the dollar per kW for a combined cycle power plant has—I’m not sure what his start point is and his end point was—but he says it’s almost doubled in the timeframe that he’s looking at.

And yes, I would agree that the cost has risen. That is the supply and demand market conditions, absolutely. I mean, the price will come down when the demand drops and supply is high. That’s just Economics 101.

But I will tell you the three things that the partners I’m working with in the utilities are focused on. Number one is safe. Number two is reliable. And number three is affordable power generation. And then the fourth one is clean. It’s not that they’re not focusing on it—but those are their three key [priorities], and then they have to focus on clean decarbonization over time.

So yes, when I talked [to them] this past week, we talked about the affordability challenge in today’s market conditions. And yes, they are very sensitive to it. Each one of their regulatory processes is driving toward finding the most affordable approach for power generation. So number one commitment—they have to serve their customers. They cannot let the lights go out, even if the cost drives up.

So I think they have to balance that increase in costs with the PUCs [public utility commissions] and look at ways to reduce that cost of electricity. And so bringing renewables in where they make sense, and short-term storage where it makes sense to balance that, is one of the things that they’re focused on. But they absolutely have to serve their customers first—they cannot let the lights go out. And number two, they have to focus on affordability. And then, you know, they’re obviously focused on safe, reliable power generation.

POWER: From a technical perspective, is there anything on the horizon that could meaningfully reduce the cost of gas power? Whether it’s turbine manufacturing or materials sourcing, what kinds of shifts—technological or otherwise—might eventually bring some relief?

Bill Newsom: Yeah, you know, we’re focused on a lot of innovation in R&D, and technology development is a big aspect. Also, automation in manufacturing. Labor’s a big challenge. In the United States, it’s a little bit easier for us to add labor resources than it is for our team in Japan. So, as we focus on automation, that’s another way to meet demand and also look at reducing costs.

We’re definitely focused on those aspects in our factories—in Savannah, Orlando, and Takasago.

POWER: Just one last question. The Advanced Clean Energy Storage (ACES Delta) project in Utah looks like it’s nearing a major milestone. From your perspective, what does the future look like for large-scale hydrogen storage—particularly as Mitsubishi Power was among the first to champion this back in 2019?

Bill Newsom: Yeah, I’m really looking forward to getting that project online and operational. I think that’s going to be a landmark project. It shows that we can bring together technologies that have been in the market for 60 or 70 years—like electrolyzers and salt caverns for gas storage—and integrate them with a combined cycle power plant across the street. That plant is shutting down a coal facility and repowering with two 1×1 JAC combined cycle power trains.

To see that all come to fruition is really exciting. I think it demonstrates that we can scale green hydrogen production, storage, and utilization. We’ll ramp up over time—starting with something like a 30% blend, and then move up to 100%.

As we continue developing the combustors to get to 100% hydrogen usage, we’ll create that option. But first, we have to prove out the technology. Then we have to bring it to scale. That’s when we can come down the cost curve.

For me, this is about demonstrating that the technology works—and then building scale. We’ve looked at exporting green ammonia from the U.S., but right now, the cost just isn’t there. Maybe blue hydrogen happens sooner rather than later. So if we can help make blue hydrogen a reality here in the U.S. until green hydrogen comes around, I think that’s a really positive step.

For now, long-term, cost-effective storage like we have at ACES Delta is unique. That’s the only facility right now that’s economical. But when it comes to green hydrogen as a fuel source, it’s still not economical. We’ve got a long way to go.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).