Natural Gas Plants

CAPital EXpenditures (CAPEX): Historical Trends, Current Estimates, and Future Projections

Because natural gas plants are well-known and perform close to their optimal performance, the EIA capital expenditures (CAPEX) projections decline at the minimum learning rate for the gas-fired technologies, resulting in incremental improvement over time that progresses slightly more quickly than inflation.

The one exception is natural gas combined cycle (CC) with carbon capture and storage (CCS). The DOE Office of Fossil Energy and the National Energy Technology Laboratory conduct research on reducing the costs and increasing the performance of CCS technology, and costs are expected to decline over time at a higher learning rate than the more mature gas-CT and gas-CC technologies.

Current estimates and future projections calculated from EIA (2017), modified as described in the CAPEX section.

R&D Only Financial Assumptions (constant background rates, no tax or tariff changes)

Comparison with Other Sources

Data sources include the ATB, B& V (2012), Newell et al. (2014), Entergy (2015), E3 (2014), IEA (2015a), ISO-NE (2016), Lazard (2016), NETL (2015), PGE (2015), PSE (2016), and Rubin et al. (2015).

Costs vary due to differences in configuration (e.g., 2x1 versus 1x1), turbine class, and methodology. All costs were converted to the same dollar year.

References

Annual Energy Outlook 2017 with Projections to 2050. Washington, D.C.: U.S. Department of Energy. January 5, 2017. http://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf.

B&V (Black & Veatch). 2012. Cost and Performance Data for Power Generation Technologies. Black & Veatch Corporation. February 2012. http://bv.com/docs/reports-studies/nrel-cost-report.pdf.

E3 (Energy and Environmental Economics). 2014. Capital Cost Review of Power Generation Technologies: Recommendations for WECC's 10- and 20-Year Studies. Prepared for the Western Electric Coordinating Council. https://www.wecc.biz/Reliability/2014_TEPPC_Generation_CapCost_Report_E3.pdf.

Entergy. 2015. Entergy Arkansas, Inc.: 2015 Integrated Resource Plan. July 15, 2015. http://entergy-arkansas.com/content/transition_plan/IRP_Materials_Compiled.pdf.

IEA (International Energy Agency). 2015a. Projected Costs of Generating Electricity: 2015 Edition. Paris: International Energy Agency. https://www.iea.org/media/presentations/150831_ProjectedCostsOfGeneratingElectricity_Presentation.pdf.

ISO-NE (ISO New England). 2016. ISO-NE CONE and ORTP Analysis. September 13, 2016. http://www.iso-ne.com/static-assets/documents/2016/09/a7_cone_ortp_concentric_energy_advisors.pptx.

Lazard. 2016. Levelized Cost of Energy Analysis-Version 10.0. December 2016. New York: Lazard. https://www.lazard.com/media/438038/levelized-cost-of-energy-v100.pdf.

NETL (National Energy Technology Laboratory: Tim Fout, Alexander Zoelle, Dale Keairns, Marc Turner, Mark Woods, Norma Kuehn, Vasant Shah, Vincent Chou, Lora Pinkerton). 2015. Fossil Energy Plants: Volume 1a: Bituminous Coal (PC) and Natural Gas to Electricity, Revision 3. DOE/NETL-2015/1723. http://www.netl.doe.gov/File%20Library/Research/Energy%20Analysis/Publications/Rev3Vol1aPC_NGCC_final.pdf.

Newell, Samuel A., J. Michael Hagerty, Kathleen Spees, Johannes P. Pfeifenberger, Quincy Liao, Christopher D. Ungate, and John Wroble. 2014. Cost of New Entry Estimates for Combustion Turbine and Combined Cycle Plants in PJM. Cambridge: The Brattle Group. May 15, 2014. http://www.brattle.com/system/publications/pdfs/000/005/010/original/Cost_of_New_Entry_Estimates_for_Combustion_Turbine_and_Combined_Cycle_Plants_in_PJM.pdf?1400252453.

PGE (Portland General Electric). 2015. Integrated Resource Plan 2016. July 16, 2015. https://www.portlandgeneral.com/-/media/public/our-company/energy-strategy/documents/2015-07-16-public-meeting.pdf.

PSE (Puget Sound Energy). 2016. 2017 IRP Supply-Side Resource Advisory Committee: Thermal. July 25, 2016. https://pse.com/aboutpse/EnergySupply/Documents/IRP_07-25-2016_Presentations.pdf.

Rubin, Edward S., Inês M.L. Azevedo, Paulina Jaramillo, and Sonia Yeh. 2015. "A Review of Learning Rates for Electricity Supply Technologies." Energy Policy 86 (November 2015): 198–218. http://www.sciencedirect.com/science/article/pii/S0301421515002293.