Turbine Inlet Air Cooling Systems: Boosting Power and Money

The technical benefits of Turbine Inlet Air Cooling systems has been widely discussed in many publications and are very well known for the Owners, the OEMs and the EPC Contractors. However, as any other engineering solution, the technical benefits must be associated to some economic benefits. We are not saying that it is all about money but money clearly plays a critical role. Looking on how the Turbine Inlet Air Cooling Market is growing up we can deduce that there are good economic benefits on using this technology. The purpose of this small write up is to list those benefits and explain why Turbine Inlet Air Cooling Systems have captched the interest from Power Owners and investors.

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The impact of gas turbine cooling systems in the generation industry

Nowadays, Power Generation is one of the biggest businesses worldwide. There are very big companies like ACWAPower or Engie, which are focused on investing in power generation but the number of small Independent Power Producers is increasing also. One of their preferred technologies for power generation is Gas Turbines Power Plants in both open and combined cycle configuration. And why Gas Turbines are one of the most spread technologies? Especially because of their high reliability, good efficiency and relatively low cost. If so many investors around the world are installing gas turbines, we can assume as a fact that they are a very feasible solution However, the investment cost for a new power plant is not small and it usually reaches values of 600 USD per kW for Open Cycle Power Plants and 800 – 1,000 USD per kW for Combined Cycle Power Plants. These are typical values considering the total Engineering, Procurement and Construction (EPC) cost. It is also important to consider that further to the equipment it is necessary to consider bit associated cost for land acquisition, transmission lines construction, etc. These values can be higher depending on the region and project requirements.


  So if an investment of 600 up to 1,000 USD per kW is feasible, what would you think of a technology that can reduce the cost per kW down to 30 % of those values? This is the case of Turbine Inlet Air Cooling Systems. The typical cost ratio for a Turbine Inlet Air Cooling system on EPC basis is between 150 up to 400 USD per extra produced kW. It could be even lower depending on the selected technology. Then, can we confirm through this kind of analysis that Turbine Inlet Air Cooling is totally feasible? Well, we know this is a very simplified analysis but the numbers are quite representative.

Turbine inlet air cooling

Going little deeper in the analysis we could differentiate two main types of Power Plant owners: Public Entities and Private Producers.

TIAC benefits for public entities

Usually the target of Public Entities is to cover the country peak electrical demand with some surplus in case of failure or unexpected sudden demand rise. The main problem especially in hot weather countries like Middle East and Tropical countries is that the peak demand period is coincident with the high temperature hours of the day, when the gas turbines power output is low. Public Entities can consider 2 options to cover the peak demand. The first one is installing more gas turbines at a cost of 600 USD/1,000 USD per kW. The second one is installing TIAC system to their existing gas turbines with much lower cost and which is giving the extra power precisely when it is needed; during those peak demand / hot temperature hours. The feasibility of Turbine Inlet Air Cooling for this case is quite apparent.

TIAC benefits for private companies

If we look into the private companies or independent power producers, their final target would to obtain more benefit from their Power Purchase Agreement. The feasibility of this system will depend then on the terms of this power purchase agreement. The power purchase agreement establishes a payment because of power availability or a payment because of energy production or a combination of both of them. The power availability term or capacity charge establishes a payment due to the amount of power that the plant can produce, the electrical kW that the plant could produce even if they are not produced. If this availability term is the only one or the biggest one, clearly the target of the Independent Power Producer is to increase their installed capacity. Then we are in a case very similar to the analysis we have done for the Public Entities.

The energy production term or energy charge establishes a payment due to the kW·h of electrical energy produced. If the production is zero, this payment is zero. Therefore for this case it is very important to consider the utilization factor of both the power plant and the Turbine Inlet Air Cooling. The fuel consumption needs to be considered also here. With TIAC system, the efficiency of a Gas Turbine is increased 2-5 %. This extra efficiency helps to reduce the production cost increasing the economic benefit and increasing the competitiveness of the power plant in an open pool market. For this case of energy production a deeper analysis must be done in which ARANER experts can support you by simulating the hourly performance of the TIAC system for a complete year. The purpose of this write up is not to enter in the detailed calculations but to give the conclusions. After performing several studies and specially after analyzing the projects that are in operation, we can conclude that typical payback period is around 3 to 5 years; meaning a return of investment between 20 % to 30 %. These numbers are good but give a short-view of the picture only.

Usually the investors prefer to analyze the situation from a more long-term prospective through the Net Present Value. The net present value gives an indication of the expected benefit after 15, 20 or 25 years of operation of one project. For this kind of systems, the next present value is between 6 to 8 times de investment value. This relatively short payback period and big multiplication factor of the capital cost is making the Turbine Inlet Air Cooling systems to be a profitable investment.


As a conclusion, the main points discussed here can be summarized as follows:

  1. Investment cost per kW of production around 200 USD per extra kW; 30 % lower than a Gas Power Plant
  2. Payback period equal or less than 5 years
  3. A net present value higher than 5 times the investment value.

  Which such an interesting financial values, which investor would say no to Turbine Inlet Air Cooling? Contact ARANER’s experts and we will help you to figure out the economic benefits of TIAC for your company. If you liked this post you may be interesting in power augmentation systems: evaporate cooling vs. TIAC with chillers.

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