Why is coal back in vogue

1
IPED COAL POWER CONFERENCE
Planning in a Carbon- Constrained World
January 18-19, 2007 St. Petersburg, FL

• presented by

Evis C. Couppis, PhD, P.E.
R. W. Beck, Inc.
2
Agenda

• Characterize CO2 emissions
• Identify possible CO2 capture/sequestration
  options
• Review CO2 capture/sequestration costs
• Review possible CO2 allowance pricing
• Identify planning options going forward

3
Will We Get CO2 Legislation?

• In 2004, 60 of utilities surveyed believed we
  will get legislation
• In 2006, 93 of utilities surveyed believed we
  will get legislation
• We already have legislation in California and
  other programs such as RGGI in Northeast
• The real issue isnt whether it will happen but
  when it will happen

4
2006 U.S. CO2 Emissions
Sector
MMetric Tons
Power 2357
Transportation 1962
Industrial 1050
Residential 351
Commercial 221
5941
TOTAL
EIA (2006)
5
U.S. CO2 Emissions by Sector
Residential
6
Commercial
4
Industrial
Power
18
39
Transportation
33
EIA (2006)
6
U.S. CO2 Emissions by Fuel Type
Other
0
Coal
37
Petroleum
43
Natural Gas
20
EIA (2006)
7
U.S. CO2 Emissions From Power Generation
Other
1
Petroleum
3
Gas
14
Coal
82
EIA (2006)
8
U.S. Electricity Sector by Fuel Type, Qbtu
Imports
Renewables
0
10
Nuclear
20
Coal
53
Petroleum
2
Gas
15
EIA (2006)
9
CO2 Emissions by Technology/Fuel Type
Emissions, Tons/Mwhr
Technology/Fuel Type

• PC
  0.95
• Gas Combined Cycle 0.41
  
• IGCC
  0.88

10
Carbon Capture Options

• Amine scrubbing
• Amine-based solid sorbent
• Selexol process
• Rectisol process
• Aqueous ammonia scrubbing
• Aqueous ammonia multi-pollutant capture
• PC oxy-fuel combustion, cryogenic ASU
• PC oxy-fuel combustion, oxygen-selective membrane
  ASU
• Co-sequestration of CO2/SO2/NOx

11
Carbon Sequestration Options

• Injection into oil/gas reservoirs
• Injection into deep, unmineable coal seams
• Injection into saline aquifers
• Injection into deep oceans
• Indirect sequestration (trees)

12
Cost Impacts of CO2 Capture/Sequestration

• What are impacts if new plants were equipped with
  CO2 capture/sequestration?
• Under stringent regulations approximately 90
  removal
• Under a cap and trade system, these
  capture/sequestration costs may not represent the
  most cost effective option
• The costs presented are order of magnitude at
  best
• The costs of CO2 control under a cap and trade
  would depend on all available options to generate
  credits/reductions/offsets
• Costs would be dependent on the stringency of the
  regulations

13
Heat Rate Impacts
40
PC
35
PCSC
30
25
Percent Increase
IGCC
20
15
NGCC
10
5
0
Technology Type
NETL(2006), MPR Associates (June 2005), Bechtel
(November 2002)
14
Capital Cost Impacts
90
PC
80
PCSC
70
60
50
Percent Increase
NGCC
40
IGCC
30
20
10
0
Technology Type
NETL(2006), MPR Associates (June 2005), Bechtel
(November 2002)
15
Cost of Electricity Impacts
80
PC
PCSC
70
60
50
Percent Increase
40
IGCC
NGCC
30
20
10
0
Technology Type
NETL(2006), MPR Associates (June 2005), Bechtel
(November 2002)
16
CO2 Avoided Costs

• Cost of CO2 avoided
• (/Mwhr)capture (/Mwhr)reference /
• (tCO2/Mwhr)reference (tCO2/Mwhr)capture

Note Mwhr based on net power
17
Possible Allowance Pricing

• In Europe, 5-30 Euros/ton with an average
  approximately 15 Euros (2005-2006)
• Southern Company Report (May 2005) estimates,
  high of 7 in 2010-20/ton in 2030 (2004)
  medium of 6-7/ton
• National Energy Commission recommended 7/ton in
  2010 escalating 5/year
• ICF (January 2006) estimates, high of 10 in
  2010-20/ton in 2025 (2003) expected
  5-15/ton

18
Will CO2 Costs be Fully Recoverable?

• Depends on your generation mix
• Depends on regulated vs. unregulated market
• Depends on whether gas or coal is on margin
• Gas will likely be impacted more than coal

19
Utility Planning Steps

• Quantify present emissions
• Take advantage of easy efficiency improvements
  (pick low hanging fruit)
• Consider CO2 regulations/legislation in planning
  (particularly in technology selection)
• Conduct risk analysis (level of regulation,
  timing, etc.)

20
Questions
IPED COAL POWER CONFERENCE

• Evis C. Couppis, PhD, P.E.
• R. W. Beck, Inc.
• ecouppis_at_rwbeck.com
• [phone]