Assessing the Impact of Fuel Price Volatility on a Natural Gas Power Plant for Electrification of Chemical Plants

In recent years, there has been growing interest in the electrification of the chemical process industry as a pathway toward decarbonization and sustainable manufacturing. However, for electrification to be economically feasible in a chemical plant, it is necessary to study the economics of power generation. In this study, a techno-economic analysis (TEA) of a 420 MW natural gas combined-cycle (NGCC) power plant is conducted to evaluate the impact of natural gas price volatility on key economic indicators. A steady-state process model is developed in ASPEN Plus to simulate the integrated gas and steam turbine configuration, including detailed modeling of combustion, heat recovery, and steam expansion stages. Capital and operating expenditures are estimated using ASPEN Process Economic Analyzer and literature-based costing frameworks. Base case results indicate a total capital cost of $133.65 million, an annual operating cost of $48.56 million, and a revenue stream of $201.72 million/year, yielding a Net Present Value (NPV) of $302.99 million and a Levelized Cost of Electricity (LCOE) of $22.38/MWh. Sensitivity analyses demonstrate that fuel price is the dominant driver of economic performance. As natural gas prices increase from $2/MMBtu to $14/MMBtu, LCOE rises from $22.38/MWh to over $110/MWh, while NPV can decline below breakeven levels depending on electricity price assumptions. Time-series analysis using historical fuel price data (daily, weekly, and monthly) further reveals that market variability introduces significant uncertainty in long-term profitability, particularly under low electricity tariffs.