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require huge investments. Use of coal also requires specific and expensive siting needs or an advanced transportation system so that trains or barges can bring fuel directly to the plant. The air standards mentioned previously also impact the initial construction fees and drive up capital costs. In contrast, gas turbine capital outlays remain low. They tend to be considerably smaller than other plants and can be operated more efficiently and less expensively in smaller sizes than can steam or nuclear facilities.48 In addition, they pollute less and therefore have fewer regulatory- imposed initial outlays for waste fuel disposal or scrubber technology. Finally, natural gas is now easily available by pipeline and allows for cheaper power plant siting. In some cases, plant siting may be so easy and capital costs so cheap that distributed generation takes hold and calls for even more gas turbine use. In other cases, such as in countries with weak national power grids, distributed generation may be preferable anyway in comparison to the costs of establishing an expansive and costly transmission and distribution system. In such a situation, gas turbines again have a natural advantage if they are technologically efficient enough to run cost-effectively. Figure 12 displays how the capital costs for gas turbines are low relative to other sources of power. It shows how, at $325/kW gas turbines have the lowest capital cost outlays. As noted the previous section on technological advances, improvements in the 1990’s brought cost reductions on gas and combined cycle turbines to allow the effect seen here. Average actual cost estimates vary: one estimate shows that the capital cost of combined cycle generating capacity dropped from $600/kW in 1991 to $350/kW in 1996.49 The Energy Information Agency (EIA) pins the current costs at $400/kW instead. Despite some variation, it is clear to see from the figure that simple cycle and combined cycle gas turbines have considerably lower costs than competing energy technologies. 48 Lee Langston, “Reasons for the Revolution” Global Gas Turbine News, Vol. 36, 1996, No. 3, p. 10. 49 Hansen and Smock, “Gas Turbines Aim at World Power Market Dominance,” Power Engineering, Vol. 100, No. 6, June 1996, p. 23. 29PDF Image | Energy RD Performance: Gas Turbine Case Study
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