What Utilities Need to Know About the Power Generation Supply Chain

For decades, supply chains in the power sector have operated steadily behind the scenes. They were the quiet backbone: essential, dependable, and rarely acknowledged unless something went wrong.

That dynamic has changed. As the energy landscape grows more complex, supply chain considerations are increasingly center stage. While supply chain planning has always been critical, it is now playing a greater role in shaping project feasibility, cost, and timing. Securing capacity has become more competitive and more consequential: for the first time in decades, customers are paying reservation fees to hold their place in production queues.

The industry is adjusting in real-time, rethinking how supply chains are managed under tighter timelines and higher stakes. Building energy supply chain resilience now depends on greater visibility, flexible sourcing, and closer collaboration, not just within procurement teams.

Utilities that understand these dynamics and align early with OEMs on compliance, logistics, and design are best positioned to protect costs, stay on schedule, and maintain reliability as they plan for what comes next. 

What’s Reshaping Supply Chain Complexity?

The growing complexity reflects the sector’s momentum, and the widening set of actors now involved in supply chain decisions. As power demand surges from data centers, manufacturing onshoring, and the electrification of everything from vehicles to factories, utilities, OEMs, developers, and EPCs are increasingly pulled into conversations once handled almost exclusively by supply chain teams.

To keep pace with the demand for electricity, some forecast that developers plan to add a total of roughly 36.4GW of gas capacity by 2028. This level of planned capacity requires utilities to work with partners to plan earlier, more proactively, and more efficiently, ensuring resources are aligned and available across the supply chain before constraints occur.

AI and automation are also reshaping utilities’ operations, speeding some processes, straining others, and creating new dependencies on technology and skilled labor. At the same time, workforce dynamics are shifting, making it harder to attract, retain, and support the people needed to keep projects moving.

On the global and policy stages, rising risks from tariffs, trade tensions, uncertain regulations, cost inflation, and competition are adding pressure on the energy sector’s supply chains. Cancellations and delays have become far more common, underscoring the need for adaptability and resilience across the power generation ecosystem.

When Compliance Shapes the Clock

Regulatory factors now dictate schedules as much as engineering timelines, complicating supply chain risk management in energy. One example of this is that global tariffs require utilities and OEMs to evaluate multiple pathways that balance design, timing, and cost.

“We are constantly evaluating the tariff impact and having discussions both internally and externally to figure out the best course of action,” says Vincent Leonard, VP of Supply Chain Management at Mitsubishi Power Americas.

Customers must work with OEMs to determine whether to pivot to a different equipment style to avoid tariff impacts or maintain the standardized design, knowing it may require paying a premium. Flexibility often hinges on contractual structures like change-in-law provisions, making early collaboration across legal, engineering, and procurement teams essential.

Country of origin and local content rules now dictate timing as much as cost.

Federally funded projects may require OEMs to “Buy American,” under the Build America, Buy America Act, which can apply to both equipment and transportation.

“If it's a project that has certain funding through DOE, they may also have a requirement to use a U.S. flag vessel, once again with impact on capacity and cost,” says Agustin Harriague, VP of Logistics and Supply Chain Operational Excellence at Mitsubishi Power Americas.

Because compliance requirements vary by project, utilities benefit from evaluating them early. Recognizing these impacts upfront helps teams select pathways that remain feasible as timelines, costs, and regulations evolve.

Capacity Has Become Currency

Capacity has become a scarce commodity in the sector across gas turbines, steam turbines, and generators, impacting both single and combined-cycle builds. According to McKinsey, the industry is now seeing sustained load growth for the first time in nearly two decades. That backdrop demands a new level of coordination among OEMs, utilities, developers, and EPCs.

To meet customer needs, OEMs are shifting from reactive acceleration to proactive protection of manufacturing capacity earlier in the planning cycle.

Securing production slots has become strategic. Reservation agreements with auxiliary equipment suppliers, often prepaid, are used to guarantee a place in the queue. Supplier diversification adds further protection when certain vendors face constraints.

The implication for utilities is clear: projects track to the pace of secured capacity. Those who plan ahead with OEM partners gain predictability and, by extension, priority.

Regional Manufacturing and Digital Logistics Provide Agility Under Pressure

OEMs must stay nimble in a volatile global environment, monitoring risks and developing alternative plans to preserve resiliency for customers. Companies are reducing their dependence on inventory buffers, according to McKinsey’s 2024 analysis on supply chain strategies, with 34% of companies relying on them in 2024, down from 59% in 2023.

Mitsubishi Power’s cross-region manufacturing footprint helps strengthen compliance, reduces transit risks, and supports on-time delivery. To accommodate customer requests for “Buy American” sourcing, the company is expanding U.S. manufacturing through its Savannah Machinery Works facility, increasing capacity for gas, steam, and hydrogen-ready turbine technologies.

Regional manufacturing helps shorten lead times, balances compliance with cost, and provides capacity closer to demand. Proximity is valuable during both equipment manufacturing and deployment, especially for modular power generation projects. Regionalization offers a buffer against geopolitical tensions, trade barriers, and global logistics disruptions.

Mitsubishi Power’s integrated supply chain model gives the flexibility needed to support customers’ evolving needs.

“Integration has allowed us to select the best, high-quality suppliers, which is helping drive quality and on-time delivery,” says Leonard. 

Integration also allows Mitsubishi Power to pool and bundle volumes. “As an integrated company, you come with more volume and with a longer pipeline business,” says Harriague.  

That scale broadens the supply base, allowing Mitsubishi Power to pivot sourcing faster, helping customers avoid tariff impacts and mitigate delays.

Digital logistics are one example of integration in action, and Mitsubishi Power has been investing in digital solutions that enable further visibility and control, from vendor management to freight booking and routing.

The New Measure of Resilience

The power sector can’t eliminate disruption, but it can reduce its impact through adaptability and transparency.

“Transparency is key. We share openly with customers where we can pivot, where we can’t, and why,” says Leonard. 

Today, resilience is defined by how quickly partners can adapt by rerouting, re-sourcing, and resetting without losing customer trust.

Prioritizing collaboration on compliance, logistics, and design allows utilities to protect cost, capacity, and reliability in a decade of high demand. Utilities that approach supply chain management with greater foresight and stronger collaboration will be best positioned to navigate demand growth, regulatory shifts, and global uncertainty while delivering reliable power for the years ahead. 

In this environment, supply chain strategy, once relegated to the background, has become one of the defining disciplines of modern power generation planning.