Integrated Gasification Combined Cycle (IGCC) combines gasifier, gas turbine, and steam turbine to increase the electricity production efficiency while having lower emissions compared to conventional coal fired power plants. The syngas produced from coal gasification differs from natural gas in terms of composition, heating value, as well as combustion characteristics. Typically, syngas has much lower heating value than natural gas, thus the flow rates of the syngas are higher than that of natural gas for a similar size gas turbine. In addition, the hydrogen in the syngas may lead to more rapid combustion and higher flame temperature compared to natural gas, which may result it more NOx emission. Thus, to address these issues, syngas could be diluted with nitrogen, steam or carbon dioxides to lower the flame speed and temperature. The effects of different diluents on the fuel economy and emissions are investigated by a combined thermodynamic and computational fluid dynamics (CFD) model. The thermodynamic model was first established and validated by the industrial operational data. More power output and better fuel economy can be achieved using N2 and CO2 as diluent instead of steam from calculation with the thermodynamic model. A numerical case study was done to estimate the profit using nitrogen instead of the steam considering in industrial operation conditions as well as all other costs. Next, the CFD model was employed to further examine the combustion stability and NOx emissions. The results show that changing diluent from steam to nitrogen will not impact the combustion stability and may lead to slightly lower NOx emissions. Finally, the partial replacement of steam by nitrogen as diluent has been realized and the industrial operational performance has also been reported.