The life-cycle cost reduction of medium-class gas turbine power plants was investigated using the mathematical optimization technique. Three different types of gas turbine power cycles-a simple cycle, a regenerative cycle, and a combined cycle-were examined, and their optimal design conditions were determined using the sequential quadratic programming (SQP) technique. As a modeling reference, the Siemens SGT-700 gas turbine was chosen and its technical data were used for system simulation and validation. Through optimization using the SQP method, the overall costs of the simple cycle, regenerative cycle, and combined cycle were reduced by 7.4%, 12.0%, and 3.9%, respectively, compared to the cost of the base cases. To examine the effect of economic parameters on the optimal design condition and cost, different values of fuel costs, interest rates, and discount rates were applied to the cost calculation, and the optimization results were analyzed and compared. The values were chosen to reflect different countries' economic situations: South Korea, China, India, and Indonesia. For South Korea and China, the optimal design condition is proposed near the upper bound of the variation range, implying that the efficiency improvement plays an important role in cost reduction. For India and Indonesia, the optimal condition is proposed in the middle of the variation ranges. Even for India and Indonesia, the fuel cost has the largest contribution to the total cost, accounting for more than 60%.Energies 2018, 11, 3511 2 of 21As an alternative to large-scale, centralized power plants, small-scale power plants located at or near the consumer sites can supply electricity; these small power generators are called distributed (or decentralized) power generation (DPG). The use of DPG is increasing; it was responsible for 21% of the global electricity generation in 2000, and it is projected to account for approximately 40% of the global electricity increase in 2020 [5].Among several available technologies such as photovoltaic panels, wind turbines, internal combustion engines, and fuel cells [6,7], gas turbines were recognized as the most attractive option from the technological and economic standpoints [5]. However, power generation using small-or medium-sized gas turbines still remains expensive compared to the large-scale power generators [8] due to the relatively higher investment costs and lower electrical efficiencies. Therefore, reducing the operating costs of gas turbines by means of the mathematical optimization is crucial, particularly in distributed power generation areas. As shown in Table 1, several commercial gas turbine products exist that are suitable for use in large factories and urban buildings [8][9][10][11].