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Although all NGCC generators tend to increase or decrease utilization in response to changes in the price of natural gas, older units tend not to be used when natural gas prices rise because they are less efficient and more expensive to run than newer technology units.
The rapid development of shale gas resources in Pennsylvania, Ohio, and West Virginia has contributed to sustained low natural gas prices and encouraged the construction of natural gas-fired power plants. About one-third of the new natural gas-fired generating capacity built in the United States since 2010 is located in PJM Interconnection (PJM), the grid operator for all or parts of 13 states in the mid-Atlantic region, including Pennsylvania, Ohio, and West Virginia. In 2020, the utilization rate, called capacity factor, of natural gas-fired combined-cycle (NGCC) units built from 2010 to 2020 in PJM was 71%, which was higher than that of older units in the region.
Two factors affect the utilization of a combined-cycle natural gas generator: the efficiency of the generator and the delivered cost of natural gas. Newer NGCC generators use more efficient turbine technology and are generally larger than older units. Although all NGCC generators tend to increase or decrease utilization in response to changes in the price of natural gas, older units tend not to be used when natural gas prices rise because they are less efficient and more expensive to run than newer technology units.
EIA separates combined-cycle natural gas turbines in PJM into three groups, which reflect the turbine technologies available at the time they were built:
Grid operators, such as PJM, dispatch generators sequentially from lowest to highest cost. Because NGCC units built from 2010 to 2020 generally have the lowest operating costs, they are dispatched more frequently. Because of their lower efficiency, units built from 1990 to 1999 have higher operating costs and are more likely to be the marginal generators in the dispatch order, meaning they are the last combined-cycle generators to be dispatched.