The average utilization rate, also known as the capacity factor, of the entire fleet of combined-cycle natural gas turbine (CCGT) electric power plants in the United States has experienced an upward trend, driven by improved operating efficiency in new CCGT units. According to recent data from the US Energy Information Administration (EIA), the CCGT capacity factor surged from 40% in 2008 to 57% in 2022.
Over this period, heightened efficiency has bolstered the competitiveness of newer CCGT units against both alternative fuel sources and their older counterparts. The EIA identifies two key factors influencing CCGT unit utilization: the efficiency of the generator and the delivered cost of natural gas.
The introduction of more advanced H- and J-class natural gas turbine technology in the mid-2010s has significantly enhanced the efficiency of newer natural gas-fired power plants. Lower natural gas prices have further boosted capacity factors at these plants, rendering electricity generated from CCGT units more cost-effective compared to alternative sources like coal-fired plants.
Notably, annual average capacity factors of CCGT units experienced significant upticks in 2012 and 2015, coinciding with a decline in the annual Henry Hub natural gas price. Grid operators, adhering to a dispatch strategy from lowest to highest cost, favor CCGT units constructed between 2010 and 2022 due to their typically lower operating costs. In 2022, the capacity factor for CCGT units commencing operations between 2010 and 2022 averaged 64%, outperforming units commissioned in the preceding decades.
Approximately half of the current CCGT capacity was built between 2000 and 2006, responding to power shortages in the late 1990s and coinciding with the introduction of more efficient F-class natural gas turbines to the market. As these plants approach the two-decade mark, a potential decline in capacity factors looms.
Lower heat rates, indicative of the ratio of fuel required to generate a unit of electricity, are a direct consequence of the increased efficiency of newer CCGT power plants. Units built between 2010 and 2022 boast the lowest average heat rate among all CCGT plants, registering at 6,960 British thermal units per kilowatt-hour (Btu/kWh) in 2022—7% lower than units constructed between 2000 and 2009.
Combined-cycle plants, already the largest single source of both electric generating capacity and electricity production in the US, witnessed the commissioning of eight new natural-gas fired combined cycle plants in 2022, contributing 7,775 MW of generating capacity to the national grid. While this figure surpassed the additions in 2020 and 2021, it fell short of the gains recorded from 2017 through 2019, indicating a nuanced trajectory in the evolution of the US combined-cycle natural gas turbine landscape.