The economics of the combined cycle gas turbine—an experience curve analysis

In this article, the experience curve is used to analyze the economics of the natural-gas-fired combined cycle gas turbine (CCGT). During the last decade the specific investment price for larger CCGTs has decreased by as much as 35 percent in real terms. This article discusses whether or not the rapid decline in price is a trend that can be expected to continue in the future. The analysis indicates that the CCGT technology has been in a so-called “shakeout” phase during the last decade. The decline of the specific investment price is likely to level off in the future. The implications of this expected development on the future price of CCGT plants and the electricity they generate are discussed.