Business
Small-Engine Makers Gain Big Momentum in Data Centers — Heard on the Street — WSJ
Small-Engine Makers Gain Big Momentum in Data Centers — Heard on the Street — WSJ
About this update from Innio N.v.
By Jinjoo LeeA few years ago, the idea of using hundreds of small engines to power gigawatts of data-center capacity would have seemed ridiculous. Not so today.More hyperscalers are seeking to hook their data centers to off-grid power, bypassing lengthy wait times to connect to the grid. Many of them are looking to smaller natural-gas turbines that have shorter wait times than the heavy-duty ones. But even these are selling out, and reciprocating engines are gaining more traction, said Musfika Mishi, an analyst at BloombergNEF. Reciprocating engines are the type that power cars and cruise ships.Among U.S. data-center projects tracked by BloombergNEF that plan to use on-site natural gas and have disclosed timelines, about 55% expect to use gas turbines and 29% plan on using reciprocating engines.Compared with turbines, reciprocating engines tend to be smaller, less efficient, more emissions heavy and require more frequent maintenance. But they are more readily available.Lead times for engines can range from one to two years, while aeroderivative turbines can take up to three years, according to BloombergNEF. Some heavy-duty, utility-scale turbines have wait times of seven to eight years.Innio, which made its public market debut in June, makes the most popular reciprocating engines for data centers. Among global data centers that plan to use natural-gas-fueled power on-site, about 8.3 gigawatts worth of projects plan to use Innio's Jenbacher engines, according to BloombergNEF. Vantage Data Centers, for example, plans to use 620 units of Jenbacher engines — with a total capacity of 2.58 gigawatts — at its Stargate Frontier campus in Texas, according to Cleanview, a data firm. Rolls-Royce and Caterpillar make the next two most popular engines, with 3.7 gigawatts and 3.6 gigawatts respectively of engines linked to announced data-center projects.These engines are selling fast. Innio reported that sales to data centers more than doubled in its first quarter compared with a year earlier. Caterpillar said in its latest earnings call that its order backlog of reciprocating engines, which are also used by other industries such as oil and gas, rose by more than 3.5 times. Aircraft-engine maker Rolls-Royce said data-center revenue increased 35% in its last quarter of 2025.Reciprocating engines have other advantages. They have quicker response times than turbines, whic...