Abstract

Investment in electricity generation infrastructure has been long lived because of its high lead times and high capital cost. In addition to its long-lived nature, the investment has also become riskier with the deregulated market structure and high electricity price volatility. The push towards building generators with flexible generation, low capital cost and low lead times has driven the investment towards natural gas fired generation resulting in large amount of capacity addition in the 2000s. Natural gas fired generation technologies have different economics compared to other technologies. In this study we find that as most of the cost of a natural gas power plant is the fuel cost and with natural gas being cheap, natural gas fired technologies pay back sooner than other technologies. Analysis of NGCT plants’ economics in six locations (New York City, Chicago, Houston, Long Island, Washington D.C. and Dunwood, NY), show that payback periods range from 9 to 17 years, depending on region the plant is operating in. This payback period is shorter than other generation technologies such as coal and nuclear. We also discuss how this high profitability and short payback period of NGCT power motivates investment in natural gas fired generation and the need policy to direct the investment towards cleaner generation technologies.

Library of Congress Subject Headings

Gas as fuel; Natural gas--Economic aspects; Electric power production

Publication Date

10-22-2018

Document Type

Thesis

Student Type

Graduate

Degree Name

Sustainable Systems (MS)

Department, Program, or Center

Sustainable Systems (GIS)

Advisor

Eric Williams

Advisor/Committee Member

Eric Hittinger

Advisor/Committee Member

Gabrielle Gaustad

Additional Files
RCarvalhoSupplement.pdf (303 kB)
Supplement

Campus

RIT – Main Campus

Plan Codes

SUSTSY-MS

Download

Additional files available below

Share

COinS