Utilization rate among U.S. natural gas combined-cycle power plants on the rise thanks to new technology

The entire United States fleet of combined-cycle natural gas turbine (CCGT) electric power plants has improved significantly since 2008, thanks to the increased operating efficiency provided by new units.

Efficiency and delivered cost of natural gas are the two main factors in a CCGT unit’s utilization, so the increased efficiency provided by H and J class natural gas turbines have significantly helped. Further, lower natural gas prices in 2012 and 2015 brought further increased capacity factors as it became cheaper than other sources. According to the U.S. Energy Information Administration (EIA), the average utilization rate (capacity factor) for those plants rose from 40 percent in 2008 to 57 percent as of 2022, meaning improved competitiveness against other fuel sources and older CCGT units.

Approximately half of the modern CCGT capacity was built between 2000 and 2006, built in response to power shortages that afflicted the late 1990s. Their capacity factors will likely fall as they continue to age, unless replaced by the new units. Those units averaged about 55 percent capacity factors, while units that began operations between 2010 and 2022 averaged 64 percent. The latter are dispatched more frequently anyway, as they typically have the lowest operating costs.

Another benefit of the newer units: lower heat rates. According to the EIA, plants built between 2010 and 2022 have the lowest average heat rate – the ratio of the amount of fuel needed to generate a unit of electricity – among all CCGT plants currently in use. They operate at about 7 percent lower heat rates than units built between 2000 and 2009.