Managing Technological Risk in the Age of Advanced Gas Turbines

Managing Technological Risk in the Age of Advanced Gas Turbines
February 5, 2026 7 mins

Managing Technological Risk in the Age of Advanced Gas Turbines

Managing Technological Risk in the Age of Advanced Gas Turbines

As the digital economy accelerates, driven by AI and cloud computing, the U.S. power sector faces a new era of demand. Advanced gas turbines are at the heart of this transformation, but their rapid evolution brings complex risks.

Key Takeaways
  1. AI-driven data center growth is fundamentally reshaping U.S. electricity demand and utility investment, rewriting a decade of forecasting.
  2. The latest gas turbine technologies introduce new operational and insurability risks that require early, integrated risk management.
  3. Proactive risk advisory and innovative insurance solutions can help advanced energy projects unlock value and build resilience.

The U.S. power sector is at a pivotal moment. AI and digital infrastructure are driving unprecedented load growth, with data center power consumption projected to reach between 6.7% and 12% of total U.S. electricity use by 2028.1 By 2030, demand could more than triple, requiring over 10 GW of new generation capacity. Utilities have responded with expansion plans exceeding 85 GW, and natural gas generation now comprises 31% of this expansion — a notable increase from 21% as of early 2025.2 

Gas turbines — especially advanced H- and J-class combined cycle units — are essential for supporting the transition away from coal while providing the dispatchable, reliable capacity that AI workloads demand. These turbines can be deployed in two to four years for grid-connected facilities and even faster for behind-the-meter installations at data center campuses.

“U.S. natural gas generation additions have fluctuated considerably, reaching a peak of 19.3 GW in 2018 before falling to less than 1 GW in 2024, primarily owing to accelerated renewable deployment. However, the emergence of AI-driven demand is reshaping forecasts, with up to 75 GW of new gas capacity projected by 2030 to accommodate exponential near-term load growth," says Rob Woods, Global Power Leader at Aon.

Innovation at Speed: Navigating Technical and Insurance Risks

Modern large-frame gas turbines are engineered for higher output and thermal efficiency, integrating advanced materials, thermal barrier coatings, sophisticated blade cooling and aerodynamic innovations. Firing temperatures now approach, unlocking new use cases and efficiency gains.

However, these advances introduce new technical and operational risks:

  • Prototypical Risk:
    New or significantly modified turbine models are classified as “prototypical” or “unproven” until they accumulate sufficient operational history. Insurers and reinsurers view these as carrying heightened technological risk, leading to higher premiums, deductibles and more restrictive coverage terms. For example, coverage may shift from LEG 2/96 — where certain design defects are excluded, but physical damage is covered — to LEG 1/96, which excludes coverage for all design defects, regardless of resulting damage. This distinction can have a significant impact on the scope of protection available to project sponsors.
  • Supply Chain and Market Pressures:
    By late 2024, inventory for new turbine deliveries was effectively sold out through 2029, with a 60 GW order backlog and a further 30 GW in reservation agreements. This supply constraint is driving up turbine and EPC pricing, with further escalation expected as lead times extend.3
  • Project Economics:
    Gas turbines typically represent 15-20% of total combined cycle plant capital costs, but their performance fundamentally determines project economics. Insurance challenges can threaten bankability, as financiers expect comprehensive coverage and predictable costs.

10%

Increase in share of new utility capacity additions from natural gas in 2025 alone.

Source: U.S. Energy Information Administration

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Appointing one-Aon creates absolute delivery accountability, with a globally integrated team overseeing placement, technical support and claims. Our unified approach delivers game-changing problem-solving to address the evolving challenges of technology risk.

Sam Beaver
Power Leader, Global Broking Center

Building Resilience: Strategies for Insurability and Project Success

  • Early Risk Engineering and Advisory

    Engage risk consultants at the project design stage. Early involvement ensures that insurability is built into the project, not bolted on later. Aon’s specialists benchmark plant design, assess technology maturity and evaluate operational and maintenance systems to identify and mitigate risks before they become barriers to financing or operation.

    “In an era where utilities face an increasingly complex web of interconnected challenges, the value of risk engineering extends well beyond traditional station surveys,” explains Richard Craig, Aon’s Global Power Risk Consulting Leader. “Aon has invested in leading engineering professionals — subject matter experts across all generation technologies — to ensure we support organizations as they navigate the evolving landscape of technological risks.”

  • Integrated Insurance Solutions

    Aon’s Data Center Lifecycle Insurance Program (DCLP) provides a unified insurance solution for data center construction projects incorporating gas turbine generation. Traditionally, these complex builds required separate placements — standard CAR/Builders Risk for core and shell works and specialist energy market policies for gas generation — resulting in fragmented insurance programs and claims uncertainty. 

    DCLP streamlines placement by integrating gas turbine construction risk within a single policy, harmonizing lead carriers and following markets and wordings to ensure clarity and responsiveness. This approach enables deployment of up to $2.5 billion in capacity and provides continuity of coverage through commissioning and the first operational year.

  • OEM Risk Assumption

    Aon can advise where insurance is limited or prohibitively expensive and how shifting risk to the original equipment manufacturer (OEM) — via extended performance guarantees, technology failure indemnities, deductible buy-downs and expedited remediation protocols — can protect insureds and lenders. Bespoke contractual safeguards can ensure that manufacturers stand firmly behind their equipment, providing assurance to both insurers and project sponsors. 

  • Special Undertakings

    Coverage can be tailored for unproven turbines as part of the project sponsors’ contract structure to close the gaps between the insurance market solutions against the bankable and prudent project sponsors’ requirement.

  • Operational Benchmarking and Data

    Aon leverages global fleet performance data to classify gas turbines based on accumulated operating hours and performance records. This data-driven approach supports more accurate risk assessment and enables organizations to negotiate better insurance terms.

  • Complementary Insurance Structures

    Specialized insurance products and innovative parametric coverages linked to outage or performance triggers can bolster liquidity, protect revenue streams and enhance resilience in the face of volatility. 

Enabling Insurability for Next-Generation Gas Turbines

Case Study

Enabling Insurability for Next-Generation Gas Turbines

Aon was engaged to support the deployment of a fleet-leading H-Class gas turbine at a U.S. data center campus. The project required integrating risk engineering and advisory expertise from the earliest stages. Aon’s team conducted a rigorous assessment of the proposed plant design, benchmarking it against industry-leading practices and addressing critical risk domains: technology maturity, plant layout, control systems, operational governance and loss mitigation. Using insurer-recognized risk metrics, Aon enabled the client to secure comprehensive insurance coverage, meet lender requirements and accelerate project delivery.

Risk Advisory as a Catalyst for Change

Flexible, efficient and low-emissions gas-fired power will play a vital role in the U.S. energy mix over the next decade. While the drive for innovation is essential, it must be matched by robust risk practices that ensure the long-term success of projects. By effectively transferring and managing technological risk, organizations can harness the advantages of next-generation gas turbines without exposing stakeholders to unacceptable uncertainties.

To discuss how early risk engagement and tailored insurance solutions can help your organization capture the promise of innovation while protecting your business from uncertainty, contact Aon’s power team.

Aon’s Thought Leaders

Sam Beaver
Power Leader, Global Broking Center 

Richard Craig
Global Power Risk Consulting Leader, Aon Risk Consulting Group

Mark Fishbaugh
Power Leader, United States

Brian Hearst 
Data Center Builders Risk Leader, United States

Eileen Miller 
Senior Power Project Risk Advisor, United States

Charles Philpott 
Global Natural Resources Leader, Enterprise Client Group

David Reisinger 
Power Property Broking Leader, United States

Rob Woods
Global Power Leader

1 Report Sees Data Center Load Growth Doubling or Tripling by 2028, American Public Power Association
2 Proposed gas-fired power plants in the United States rise due to AI energy demand speculation, Global Energy Monitor
3 With Gas-Fired Generation Surging, Gas Turbine Backlogs Come to the Forefront, American Public Power Association

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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