In this paper, we have proposed a gas turbine combined cycle with the integration of low-temperature thermal energy and methanol decomposition, and also investigated a principle of the cascade utilization of chemical exergy of fuel. Here, the combustion of methanol fuel is divided up into two steps: the methanol is decomposed into the syngas with hydrogen and carbon monoxide through recovering the low-temperature thermal energy from an intercooler of a gas turbine, and then the syngas is combusted with air, namely, the indirect combustion of methanol. As a result, the exergy destruction in the combustion of syngas is expected to be decreased by 7.5 percentage points of the input energy of cycle; at the same time, the low-temperature thermal energy is upgraded to the chemical energy of fuel, and the thermal efficiency of this gas turbine cycle is expected to be about 6 percent points higher than that of a conventionally combined cycle with intercooling at the turbine inlet temperature of 1300 degrees C and at a given overall pressure ratio of 15. The promising results obtained here indicated that this gas turbine combined cycle could simultaneously accomplish the decrease of exergy destruction in combustion and the upgrade of low-temperature thermal energy levels, leading to the effective utilization of clean syngas fuel and the recovery of low-temperature thermal energy in power system. (C) 2005 Elsevier Ltd. All rights reserved.