Investments for 2026 - it's a gas!

Data Centers require large amounts of electricity and the fuel needs to be clean and immediately available. Nuclear energy is the long term answer but that is still 6-10 years away and data centers need electricity now! The answer lies in building modular large scale natural gas generators.

Major manufacturers of large-scale natural gas generators for data centers include GE Vernova, Rolls-Royce (mtu), Cummins, Caterpillar, Siemens (via USP&E), and INNIO (Jenbacher), offering solutions from fast-start units for backup power to large gas turbines for primary energy, with a focus on reliability, rapid response, and lower emissions. 

Key Players & Their Offerings:

• GE Vernova: Provides large gas turbines (25 MW to 1 GW) and aeroderivative systems for scalable, flexible power, supporting both backup and primary needs.
• Rolls-Royce (mtu): Offers high-speed, fast-start gas gensets (like the Series 4000) that can reach full power in under a minute, ideal for quick data center response.
• Cummins: Manufactures high-horsepower, integrated natural gas generator sets for prime and backup power, known for high reliability.
• Caterpillar: A major player in industrial generators, providing robust solutions for high-demand data center applications.
• INNIO (Jenbacher): Known for fast-start natural gas engines (like the J620) that offer high efficiency, reduced emissions, and potential for trigeneration (power, heat, cooling).
• Siemens: Through partners like USP&E, offers high-power gas turbines (SGT-750, SGT-800) for hyperscale facilities.

GE Vernova are saturated with orders up to 2028 and so the current share price will already take this into account as it cannot accept more orders. Cummins are in a similar situation as are RR and CAT.

INNIO are a private company but an IPO is expected soon. It is also saturated with orders for 2026 but is is doubling it's output for 2027 and thus has some spare order capacity for 2027/2028.

These gas-powered generators will also be required for emergency power. Power cuts will become more prevalent in the future due to an inadequate grid infrastructure and as BEVs become more prevalent, a lack of power would immobilize all workers in the area. Not only all businesses but also travel will be affected by a blackout. The workers cannot work from home without power and they cannot travel to work with a flat battery in their BEVs!

As well as Shell, in 2026, companies like Chevron and ExxonMobil are increasingly integrating transportation with power production and pay dividends. They are collaborating with tech firms to build off-grid, natural gas-powered facilities directly at data center sites to bypass grid connection delays. For example, a 4.5 GW data center in Abilene, Texas, uses dedicated onsite natural gas facilities for power.

The ETF WENS has these holdings:

The PSRU ETF comprises 10% Shell. I also hold Siemens, CAT and RR.