still smaller cost savings. These estimates assume that the nonfuel costs—principally the initial capital cost—remain constant. DOE targets show lower capital costs for advanced technologies than current commercial systems. More likely, the capital cost of more efficient combined-cycle systems will exceed that of the simpler, less demanding technologies now in use (Merrow et al., 1981). Higher capital and operating costs would mean that overall reductions in the cost of electricity would be difficult or impossible to achieve.

While projections of the cost and performance of new technologies are subject to great uncertainty (Frey et al., 1994), comparison of systems and options should be done on a common and clearly stated basis to provide valuable guidance for investment in RDD&C (see below, Systems Analysis and Strategy Studies). Such comparative studies are extremely valuable for assessing the validity of program goals and for communication of results.

A more realistic cost goal for the DOE advanced power systems program might be to achieve efficiency improvements at an overall electricity cost comparable to that for new coal plants today. For the future U.S. market, some cost premium could even be acceptable if justified by the improved environmental performance and reduced externality costs associated with advanced technologies. Indeed, future environmental regulations may well require such higher performance, creating new incentives for investment in higher-efficiency systems. To be competitive overseas, advanced technologies would require the lowest possible capital costs consistent with the environmental and other requirements of specific foreign markets. In short, despite DOE's current planning estimates, it remains to be seen whether high-performance and smaller investment costs are in fact compatible objectives.

Group 1 power generation systems generally make use of commercially available components and technologies, such as supercritical boilers, gasifiers,