In this paper, a new type of gas turbine cycle has been proposed based on an innovative combination of a newly designed HAT cycle with an externally fired heater. In this manner, "dirty" fuels such as coal and biomass can be more efficiently used than before and the water in this cycle can be recycled. This is radically different from the conventional HAT cycle. In particular, the temperature of the clean humid air out of the turbine is not restricted by the dew point of gas. Hence, some amount of latent heat can be utilized to generate hot water being supplied to the humidifier. This will enhance the humidification ability for improving performance of the system. The new system is also analyzed by using the graphical exergy methodology based on energy-utilization diagrams (EUDs). As a result, for a turbine inlet temperature (TIT) of 1073 K, the thermal efficiency of the new system may be as high as 45.37%. The new system will effectively recover both the energy quality and quantity at the low- and middle-temperature ranges. (C) 2004 Elsevier Ltd. All rights reserved.