A combined plant efficiency of greater than 60 percent is achievable through raising the turbine inlet temperature to 1500–1600 ºC and incorporation of advanced cooling techniques in the gas turbine. The primary influence on cycle efficiency as turbine inlet temperature is raised is increased turbine cooling loss. The increase in gas turbine cycle efficiency as turbine inlet temperature is raised may be more than offset by the increased cooling losses. The cooling losses play a major role in combined cycle optimization. Detailed prediction of cooling losses is a complex task. The quantification of cooling losses cannot be performed by traditional energy-balance analysis. The model for the turbine cooling losses is presented. It is based on a separation of the air-cooled gas turbine cycle into topping cycle with products of combustion as working fluid and bottoming cycles with cooling flow. The method of exergy analysis is applied to identified and quantified cooling losses. The models have been used in computer programs that predict the performance of cooled gas-turbine plant depending on the cooling technology levels and turbine inlet temperature. The presented method is illustrated by applying it to analyze an air-cooled gas turbine plant similar to the GTE-65. A detailed breakdown of the component irreversibilities by source-process is presented. The calculation results are illustrated in the flow diagram of exergy.