Ex-SpaceX engineers found an energy company, raise $55M Series A round, and revolutionize gas turbine systems
As we have said before, The Fusion Report covers more than just fusion energy; we cover the entire scope of the current energy ecosystem, because not understanding the total context around energy choices means you only see part of the picture. An example is the “renaissance” of gas turbines for power generation. The positives for gas turbines versus nuclear fission and other fossil fuels is that natural gas power plants are one of the lowest capital expenditure (CapEx) options for building new power plants for baseload energy, even versus by solar power plus battery energy storage systems (BESS, though solar energy plus BESS still has the lowest TCO). Moreover, natural gas power plants (until recently) were the fastest to build, second only to solar power plants. I say until recently because lately gas turbine power plants have been crippled by a lack of turbines, especially in the 100MW-1GW capacity range.
Today the waiting time for large turbines for natural gas power plants typically exceeds five years. That’s where Arbor Energy comes in. Founded in 2021 by former SpaceX engineers Brad Hartwig and Andrew Garcia-Clark, the company raised a $55M Series A round to scale their manufacturing efforts to support their customers’ demand. At the same time, the company was able to secure orders from GridMarkets for what is thought to be roughly 200 of their Halcyon 3-D printed turbines, worth an estimated several billion dollars. They hope to ramp production up to 100 turbines annually by 2030, which could produce up to 10 gigawatts of power per year.
Bigger is Not Always Better When it Comes to Gas Turbines
In the view of Arbor Energy (and many other companies who need gas turbines), the handful of manufacturers who build large gas turbines are struggling to keep pace, and falling behind more every year. The production of traditional gas turbines is capital intensive, with a number of dependencies on long lead parts driven by post-COVID manufacturing backlogs. This limits the large turbine manufacturers to flex production, even as they ramp to support increased demand. For instance, GE for NOVA has seen a 71% year-over-year increase in its overall orders, while seeing its backlog stretch through 2029. In spite of the rising orders, the production lines of the large gas turbine manufacturers were built for a time when demand increased slowly, rather than seeing the huge demand growth that is apparent today, largely driven by the demand for power for data centers.
Arbor Energy’s approach to the design of large natural gas power turbines is different. The company is initially focused on 25 MW modular power systems that combine rocket turbopump technology, harnessing a supercritical CO2 power cycle and modern manufacturing model which utilizes 3D printing for its core elements. Additionally, rather than building system components on site, the major system components are preassembled and shipped to the site, ready for installation and final assembly. Multiple units can be stacked modularly to the desired size, as well as to scale to customer needs over time. The result is significantly reduced time to power.
Flexible Fuels, and Cleaner Than Traditional Natural Gas Sources
Arbor’s high-performance combustion systems are fuel-flexible, and can use anything from natural gas to syngas (a composition made from wood chips and other natural waste). The high-performance combustion chambers, which trace their lineage back to liquid fuel rocket systems, utilize pure oxygen to burn the fuel, resulting in near-pure CO2 exhaust. Since the exhaust can be sequestered, it results in a near-perfectly clean power source that produces reliable baseload power. A video of the test firing of their combustion system in the Mojave Desert is shown here.
The Criticality of the Need for Gas Turbines for US Data Centers
Natural gas turbines provide over 40% of US electricity generation, and serve as the primary source for reliable, flexible, and quick-start power. With artificial intelligence (AI) and data center power needs expected to grow total power demands by 4.7% over five years, and with 60% of that growth expected to be met by natural gas, the need for gas turbines is critical. Additionally, as coal plants are phased out, natural gas power plants are replacing them as the cornerstone of reliable generation, accounting for significant new capacity additions. Finally, the cost for large gas turbines has also skyrocketed, with prices rising recently from $2,000 per kilowatt to $3,000 per kilowatt.
As a result, the need for new gas turbines has reached a critical point. Major players like GE Vernona, Siemens Energy, and Mitsubishi are investing billions to expand their plants, with Siemens Energy alone investing $1 million to restart production in North Carolina. Even with these steps, the waiting period for large turbines is over five year, which has been one of the reasons that their stock prices have fallen even in the face of significantly increased demand.
For what it is worth, the gas turbine business is not one that makes it easy for new companies to enter this market, which is why Arbor Energy’s story is unique. Not only have they built new capacity, they have also re-engineered the solution to reduce pollution, as well as 3D-printing gas turbine components which is definitely new-age. Arbor Energy’s gas turbines may not be perfect (and no fossil fuel solution is), but it’s better than the alternatives that exist today.
