Performance analysis of a 500 MWe steam turbine cycle is performed combining the thermodynamic first and second-law constraints to identify the potential avenues for significant enhancement in efficiency. The efficiency of certain plant components, e.g. condenser, feed water heaters etc., is not readily defined in the gamut of the first law, since their output do not involve any thermodynamic work. Performance criteria for such components are defined in a way which can easily be translated to the overall influence of the cycle input and output, and can be used to assess performances under different operating conditions. A performance calculation software has been developed that computes the energy and exergy flows using thermodynamic property values with the real time operation parameters at the terminal points of each system/equipment and evaluates the relevant rational performance parameters for them. Exergy-based analysis of the turbine cycle under different strategic conditions with different degrees of superheat and reheat sprays exhibit the extent of performance deterioration of the major equipment and its impact to the overall cycle efficiency. For example, during a unit operation with attemperation flow, a traditional energy analysis alone would wrongly indicate an improved thermal performance of HP heater 5, since the feed water temperature rise across it increases. However, the actual performance degradation is reflected as an exergy analysis indicates an increased exergy destruction within the HP heater 5 under reheat spray. These results corroborate to the deterioration of overall cycle efficiency and rightly assist operational optimization. The exergy-based analysis is found to offer a more direct tool for evaluating the commercial implication of the off-design operation of an individual component of a turbine cycle. The exergy destruction is also translated in terms of its environmental impact, since the irretrievable loss of useful work eventually leads to thermal pollution. The technique can be effectively used by practicing engineers in order to improve efficiency by reducing the avoidable exergy destruction, directly assisting the saving of energy resources and decreasing environmental pollution.