In the 1970s, power generation from gas turbines was minimal. Gas turbines in those days were run on fuel oil, since there was a so-called “natural gas shortage”. The U.S. Fuel Use Act of 1978 essentially disallowed the use of natural gas for power generation. Hence there was no incentive on the part of gas turbine manufacturers to invest in the development of gas turbine technology.
There were many regulatory developments in the 1980s and 1990s, which led to the rapid growth in power generation from gas turbines. These developments included Public Utility Regulatory Policy Act of 1978 (encouraging cogeneration), FERC Order 636 (deregulating natural gas industry), Energy Policy Act of 1992 (creating EWGs and IPPs) and FERC Order 888 (open access to electrical transmission system). There was also a backlash from excessive electric rates due to high capital recovery of nuclear and coal-fired plant costs caused by tremendous cost increase resulting from tightening NRC requirements for nuclear plants and significant SO2/NOx/other emissions controls required for coal-fired plants. During this period, rapid technology developments took place in the metallurgy, design, efficiency, and reliability of gas turbines. In addition, U.S. DOE contributed to these developments by encouraging research and development efforts in high temperature and high efficiency gas turbines.
Today we are seeing a tremendous explosion of power generating facilities by electric utilities and Independent Power Producers (IPPs). A few years ago, Merchant Power (generation without power purchase agreements) was unheard of. Today it is growing at a very fast pace. Can this rapid growth be sustained? The paper will explore the factors that will play a significant role in the future growth of gas turbine-based power generation in the U.S. The paper will also discuss the methods and developments that could decrease the capital costs of gas turbine power plants resulting in the lowest cost generation compared to other power generation technologies.