Abstract: The plant efficiency of a nuclear fusion power plant is considered. During nominal operation, the plant efficiency is determined by the thermodynamic efficiency and the recirculated power fraction. However, on average the reactor operates below the nominal power, even when the long shutdown periods for large maintenance are left outside the averaging. Hence, next to the recirculated power fraction the capacity factor must be factored in. An expression for the plant efficiency which incorporates both factors is given. It is shown that the combination of high recirculated power fraction and a low capacity factor, results in poor plant efficiency. This is due to the fact that in a fusion reactor the recirculated power remains high if it runs at reduced output power. It is argued that, at least for a first generation of power plants, this combination is likely to occur. Worked out example calculations are given for the models of the power plant conceptual study. Finally, the impact on the competitiveness of fusion on the energy market is discussed. This analysis stresses the importance of the development of plant designs with low recirculated power fraction.