The Role of Technology in Addressing Global Climate Change

1. The Role of Technology in Addressing Global Climate Change John Novak Executive Director, Federal and Industry Activities, Environment and Generation Sectors SUSTAINABLE ENERGY ROUNDTABLE SERIES: Next Steps Post-Kyoto: U.S. Options Washington, DC February 24, 2005

2. Overview of Presentation • Role of Technology in Achieving Energy and Climate Change Goals • Power Partners - Climate Change Technology RDD&D Partnership • Coal Fleet for Tomorrow

3. Stabilizing CO2 Concentrations • Stabilization of greenhouse gas concentrations is the goal of the Framework Convention on Climate Change. • Stabilizing the concentration of CO2 is a long-term problem. Wigley, Richels and Edmonds. 1996. "Economic and Environmental Choices in the Stabilization of Atmospheric CO2 Concentrations," Nature. 379(6562):240-243. • Stabilization means that GLOBAL emissions must peak in the decades ahead and then decline indefinitely thereafter.

4. Stabilizing CO2Base Case and “Gap” Technologies • Assumed Advances In • Fossil Fuels • Energy intensity • Nuclear • Renewables • Gap technologies • Carbon capture & disposal • Adv. fossil • H2 and Adv. Transportation • Biotechnologies • Soils, Bioenergy, adv. Biological energy The “Gap”

5. TECHNOLOGY and R&D TRENDS • EPRI Electricity Technology Road Map. • Resolving the energy/carbon conflict - Current pace of innovation in today’s power generation technologies—fossil, nuclear, and renewable—will not be sufficient to meet either tomorrow’s economic or greenhouse gas reduction needs. • EPRI – Sponsored Global Energy Technology Strategy. • Current investments in energy R&D are inadequate to resolve the energy/carbon conflict. Both public and private sector investments in energy research and development have declined since the 1980’s.

6. Power Partners • On December 13, 2004 the heads of seven power sector groups signed the Power Partners Memorandum of Understanding (MOU) with the Department of Energy (DOE). Power Partners is the power sector’s program under the Administration’s Climate VISION program. • Reduce carbon intensity by an equivalent of 3 to 5 percent from 2002 to 2012 • Climate change technology research, development, demonstration and deployment (RDD&D) partnership with DOE Climate Change Technology RDD&D Partnership • Initial implementation of an RDD&D partnership is being carried out via CoalFleet for Tomorrow • CO2 Sequestration is being assessed under the DOE Carbon Sequestration Regional Partnerships and FutureGen. EPRI plans to submit proposals under the phase 2 Carbon Sequestration solicitation. • Preliminary discussions have taken place between DOE and EPRI staff to begin to explore RDD&D options for nuclear power, renewables, electricity transmission and distribution, hydrogen and end use technologies.

7. CoalFleet for Tomorrow • An industry-led initiative to encourage early deployment of advanced coal-based technology and options for CO2 capture and sequestration. • Supported by almost ½ of all US coal-fired plant owners (> 150 GW), major equipment suppliers, engineering firms, international power generators and the US DOE • A one-year first phase effort is underway

8. “CoalFleet for Tomorrow”CoalFleet Vision and Phase I Elements VISION - An industry-led collaboration can accelerate the deployment of advanced coal power systems 1.Assess Technology Trade-Offs, Licensing, Permitting and Incentives Assess the costs, benefits, and risks of CO2-ready advanced coal plants, evaluate environmental permitting and determine incentive structures to accelerate deployment 2.Develop and Implement Generic Design Guidelines for Standardized Plants Minimize time, costs, and risks in the design, permitting, construction, and operation phases 3. Accelerate and Augment RD&D Complement existing programs (e.g., FutureGen) with industry funding and support to accelerate deployment

9. CoalFleet Helps Reduce Risk and Uncertainty and Understand Issues • Cost – through standard design guidelines, user requirements, knowledge base and lessons learned • Downtime/ reliability – knowledge and industry experience – world-class expert analysis • Incentives and financing– understanding how they will work (or not) for your company • Permitting & Licensing issues • Knowledge of how to deal with CO2 in the future – what is “CO2 ready”? • Hydrogen, chemical alternatives • Alternates for coal type, type of organization • Collaborate to help each other learn from experience and new design efforts

10. CoalFleet Operating Concept • CoalFleet Major Deliverables • Incentives Analysis • Permitting Analysis • Outreach Materials • Knowledge Base • User Design Basis Specs • Pre-Design Specs • Generic Design Guidelines • RD&D Plan Early Deployment Projects Support Support Support World-ClassExpert WorkingGroup (Independent) • Task Working Groups • Incentives • Permitting • User Design Basis Spec • RD&D • Others TBD • Supplier/Industry Experts • Process Licensors • OEMs • EPCs • Operators

11. “CoalFleet for Tomorrow” CoalFleet Supports Deployment DOE Coal & CO2 RD&D EPRI CoalFleet Phase I Reg/Fin Incentives EPRI CoalFleet Phase II Early Deployment Units Next Generation Units DOE R&D CCPI Demonstrations FutureGen 1 Risk Reduction, Permitting and Incentives Early Deployment Units Early Deployment Units Early Deployment Units 2 DesignGuidelines Early Deployment Units CoalFleet Early Deployment Units Project 1 Next Generation Units 3 RD&DAugmentation Project 2 Next Generation Units Project 3 Next Generation Units Longest-term RD&D (e.g., CO2 1 MTPY Demonstrations) Next Generation Units Next Generation Units 2005 2010 2015 2020

12. CoalFleet for Tomorrow - Status • The new industry-lead initiative is aimed at deployment of technology options which can meet the goals of the DOE/CURC/EPRI Roadmap • Work is underway, and initial focus is on a series of deliverables that concentrate initially on IGCC but includes scoping work on other advanced technologies, and CO2 capture and sequestration • Information on deployment incentives, permitting, licensing, design guidelines, a knowledge base and R&D needs is being assembled and reviewed by CoalFleet participants • The momentum from this initial work will be shaped by the participants and channeled into follow-on collaboration with public and private entities both in the US and internationally

13. CO2 Capture and Sequestration (CCS) • At current State-of-the Art (SOA) there is no “Single Bullet” technology for CCS. Technology selection depends on the location, coal and application • Sequestration is the key technical issue - location and geology dependent • CO2 capture adds considerably to Cost of Electricity(COE) • IGCC w/ CO2 least cost for bituminous coals • IGCC w/ CO2 and PC plants with Amine scrubbing for CO2 capture are very similar cost for high moisture Sub-bituminous Coals • PC with Amine scrubbing least cost for Lignites • CFBC can handle high ash coals and other low value fuels • Oxyfuel (O2 Combustion to CO2) and other technologies at developmental stage

14. Economics of IGCC and USC PC with CO2 Capture (Gasification Technologies are not all alike!) Nominal 450 MW net Plants, Pittsburgh #8 Bituminous Coal, All IGCC with spare gasifiers

15. Background Slides

16. IGCC with and without CO2 Removal Sulfur Coal Gas Clean Up CC Power Block POWER Air ASU Gasifier O2 Slag Sulfur CO2 Coal CC Power Block Gas Clean Up ASU Gasifier Shift Air POWER O2 H2 Slag IGCC H2 & CO2 (e.g.,FutureGen)

17. Existing Coal-based IGCCs Wabash (Indiana) Puertollano (Spain) Polk (Florida) Buggenum (Netherlands)

18. Regional US Coal Differences Favor Multiple Advanced Coal Options IGCC PSDF • IGCC is best for “high rank” bituminous coals or low-rank coal plus petroleum coke (today's economics do not favor IGCC but IGCC has lower emissions plus CO2 options) • New IGCC designs may be better for low rank coal and may be cheaper but these designs are still developmental • Waste coals, biomass may be best in fluid bed combustion (FBC) and this has found a niche, but hi-efficiency steam conditions are unproven • Most plans are for “conventional” pulverized coal in the US. In Europe and Japan with high fuel costs ultrasupercritical (USC) designs are favored SC- FBC

19. Effect of Coal Quality on PC and IGCCPlant Heat Rates and Capital Cost

20. Gap Analysis Showing COE Components $3.80/MWh, or 7.5% Assumes coal at $1.50/MBtu, 80% c.f., and 20-year book life

21. Purpose of Early Deployment Incentives NGCC COE Coal IGCC(USC PC,SC CFBC) Conv. Coal PC To bring the value of advanced coal technologies to near that of competing alternatives in terms of Cost of Electricity (COE)

22. What Are the “Gaps”? Where Will R&D Help?Competitiveness Sensitivity: IGCC Example Example Better Refractory, Sparing etc PC-Sub Design Guidelines, Sparing etc +/- 10% on each item

23. Standard Plant Design Guidelines More Accurate Decisions and a 2–3 Year Faster Process • Guidelines Principles (Reference Plants) • Establish Industry Database • Reduce Plant Costs and Increase Reliability • Move Industry from First-of-a-Kind (FOAK) to Nth-of-a-Kind • Establish Consensus Internally and Externally • Consolidate Current Knowledge Base (EPRI, DOE, Industry Studies) • Specify User Design Basis • Pre-Design Specification • Record Early Decisions from New Feasibility Studies and Technology Choices • Update Knowledge Base • Generic Design Specifications based on Early Deployment Plants