Abstract In the process of energy transformation in China, the potential competitiveness of natural gas power plants and coal-fired power plants equipped with carbon capture and storage (CCS) technology should be considered. In this study, the levelized cost of electricity (LCOE) method is used to compare the competitiveness of these two types of power plants. The results show that regardless of whether a carbon pricing mechanism is included, the LCOE is lower for coal-fired power plants with CCS than for natural gas power plants if the coal-fired power plants have the same level of emission reduction as the natural gas power plants or ensure deep emission reductions. When the coal price reaches 750 CNY/t, the coal-fired power plants with the CCS technology lose their competitive advantage when the carbon price is less than 158 CNY/t. In Shanxi province, the coal-fired power plants with CCS technology have a greater competitive advantage than the natural gas power plants.