Jul

10

First the technology changed. This improved the cost. The improved cost changed changed the mix.

Better materials of construction permitted the maximum allowable inlet temperature for gas turbines to increase from about 1500F to 2300F. This resulted in efficiency improving from about 25% to about 40%. Even with the higher efficiency, the exhaust temperature of the gas turbine increased by several hundred degrees. This higher temperature resulted in higher efficiency for the steam portion of the combined cycle and lower relative capital cost. Now total efficiencies are in the range of 60%.

Horizontal drilling and fracking resulted in falling gas prices in the face of rising demand.

Steve Jobs (and maybe Rick Perry) was right–sometimes supply creates its own demand.

Via technology.


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