The average utilization rate, also known as the capacity factor, for the entire fleet of combined-cycle natural gas turbine (CCGT) electric power plants in the United States has witnessed a notable upswing, propelled by enhanced operational efficiency of new CCGT units. Over the years, the CCGT capacity factor has experienced a significant increase, climbing from 40% in 2008 to an impressive 57% in 2022. This boost in efficiency has heightened the competitive edge of newer CCGT units against both alternative fuel sources and aging CCGT units.
Two primary factors influence the utilization of a CCGT unit: 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 notably increased the efficiency of newer natural gas-fired power plants. Additionally, lower natural gas prices tend to elevate capacity factors at these power plants, as the cost of electricity generated from natural gas becomes more economical compared to alternative sources like coal-fired plants. Notably, in both 2012 and 2015, the annual average capacity factors of CCGT units experienced an uptick of more than seven percentage points during periods of declining annual Henry Hub natural gas prices.
Grid operators typically dispatch generators in a sequence from lowest to highest cost. Given that CCGT units constructed between 2010 and 2022 generally boast the lowest operating costs, they are dispatched more frequently than their older counterparts. In 2022, the capacity factor of CCGT units initiated between 2010 and 2022 averaged an impressive 64%, in stark contrast to 55% for those commissioned between 2000 and 2009, and a mere 35% for units operational between 1990 and 1999.
Approximately half of the current CCGT capacity was constructed between 2000 and 2006, responding to power shortages in the late 1990s. This surge in CCGT plants coincided with the introduction of new and more efficient F-class natural gas turbines to the market. However, as these CCGT plants approach the two-decade mark, there is a potential for decreased capacity factors due to the aging of these units.
Lower heat rates, representing the ratio of fuel required to generate a unit of electricity, are a direct outcome of the increased efficiency of newer CCGT power plants. In 2022, CCGT power plants constructed between 2010 and 2022 boasted the lowest average heat rate among all CCGT plants, measuring at 6,960 British thermal units per kilowatthour (Btu/kWh), marking a 7% reduction compared to units built between 2000 and 2009.