availability and costs of supply-side electricity...
TRANSCRIPT
Availability and Costs of Supply-Side Electricity Options
Revis JamesDirectorEnergy Technology Assessment Center
EPRI Global Climate Change Research SeminarWashington, DCMay 20, 2009
2© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Messages
• The size of the challenges
• Technology costs– Status– Trends– Drivers
• Technology insights– Full portfolio vs. “silver bullet”– Importance of baseload technologies– New challenges: renewables, efficiency
3© 2009 Electric Power Research Institute, Inc. All rights reserved.
Substantial Electricity Demand
• Now: 2007 U.S. electricity consumption ~ 3800 TWh
• Future (EIA 2009 Annual Energy Outlook)– Final report projects 900 TWh (24%) increase in U.S.
electricity consumption by 2030.– About same as addition of new load equivalent to 2006
consumption of Texas, California, Florida, Ohio.
4© 2009 Electric Power Research Institute, Inc. All rights reserved.
Huge Emissions Reductions
~2.5x total emissions for U.S. electric sector*~2.5x total emissions for U.S. electric sector*
2005 Annual U.S. CO2005 Annual U.S. CO22 EmissionsEmissions
17% 2005 Annual U.S. CO17% 2005 Annual U.S. CO22 EmissionsEmissions
*2007 U.S. electricity sector CO2 emissions = 2.4B mmT CO2
5© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Messages
• The size of the challenges
• Technology costs– Status– Trends– Drivers
• Technology insights– Full portfolio vs. “silver bullet”– Importance of baseload technologies– New challenges: renewables, efficiency
6© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Elements of Levelized Cost of Electricity
• Estimate annual cash flows from project inception through end of plant life
• Calculate net present value (NPV) of cash flows
• Calculate constant annual cash flow to produce same NPV
• Levelized cost of electricity (LCOE) = constant annual cash flow divided by annual electricity production
7© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Elements of Capital Costs
•Total Plant Cost (TPC)
•Owners Costs
•Allowance For Funds Used During Construction (AFUDC)
•Project-specific Costs
8© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Elements of Capital Costs
•Total Capital Requirement (TCR) = TPC + Owner’s Costs + AFUDC + Project Specific Costs
•Under standard assumptions, Owner’s costs+AFUDC ~ 16–19% of TPC.
•Project-specific costs ~ 10–15% of TPC
10© 2009 Electric Power Research Institute, Inc. All rights reserved.
Costs Vary by Region(IEA 2008 World Energy Outlook)
11© 2009 Electric Power Research Institute, Inc. All rights reserved.
30
40
50
60
70
80
90
100
110
120
0 10 20 30 40 50
Levelized Cost of Electricity, $/MWh
Cost of CO2, $/Metric Ton
IGCC
NGCC ($8/MMBtu)
PC
Wind (32.5% Capacity Factor)
Nuclear
Biomass NGCC ($10/MMBtu)
Electricity Production Cost Driven by Capital Cost, Capacity Factor
All costs are in December 2007 $
EPRI 1018329, October 2008
NGCC ($5/MMBtu)
Note: Solar Thermal ~ 175 $/MWh
Average 2007 U.S. wholesale electricity price = $66/MWh
12© 2009 Electric Power Research Institute, Inc. All rights reserved.
Common Drivers Affect Costs
Shop load > 80%• Boilers• Compressors• Motors• Piping• Structural steel• Valves• Turbine generators• Vessels & tanks• Wire & cable
Lead times > 1 year• Boilers• Compressors• Turbine-driven equipment• Pressure vessels
Bechtel Global Supply Trends, April 2008
13© 2009 Electric Power Research Institute, Inc. All rights reserved.
360
380
400
420
440
460
480
500
520
540
560
580
600
620
640
660
Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09
Che
mic
al E
ngin
eerin
g Pl
ant C
ost I
ndex
900
950
1,000
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
Mar
shal
l & S
wift
Equ
ipm
ent C
ost I
ndex
Chemical Engineering Plant Cost Index
Marshall & Swift Equipment Cost Index
Effects of Recession on Cost Escalation(Source: Chemical Engineering Magazine, March 2009)
One engineering company reported that their cost estimate for an IGCC project is now ~12% lower than the original estimate
developed in October 2008
14© 2009 Electric Power Research Institute, Inc. All rights reserved.
Key Messages
• The size of the challenges
• Technology costs– Status– Trends– Drivers
• Technology insights– Full portfolio vs. “silver bullet”– Importance of baseload technologies– New challenges: renewables, efficiency
15© 2009 Electric Power Research Institute, Inc. All rights reserved.
Cost Uncertainty and Technology Mix
• Vary costs, timing of key technologies: nuclear, CO2 capture and storage
• Proportions of different generation technologies vary, but a diverse portfolio of technologies is optimum in all cases.
16© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
EPRI 2008 MERGE Sensitivity Analyses
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $113/MWh
CO2 Cost = $74/metric ton CO2
17© 2009 Electric Power Research Institute, Inc. All rights reserved.
Important Technology Insights
•Together, advanced nuclear and advanced coal + CCS play a dominant role in all scenarios.
•The magnitude of demand reduction across all scenarios will likely drive increasing end-use efficiency.
•Renewables ultimately play a large role in nearly all scenarios.
18© 2009 Electric Power Research Institute, Inc. All rights reserved.
EMERGING
GROWTHFIRST OF KIND
MATURE
Basic Science, ExperimentsBasic Science, ExperimentsLarge scale
demonstration, first of kind plants
Large scale demonstration, first of
kind plants
Lead Times are Long for Technology Development
Prototypes, Proof of Principle
Prototypes, Proof of Principle
Commercial technology, widespread deploymentCommercial technology, widespread deployment
~ 15-25 years
19© 2009 Electric Power Research Institute, Inc. All rights reserved.
Future Cost Trends
Factors leading to lower capital costs:•Commodity, transportation and fuel costs are declining from 2008peaks•Reduced demand due to worldwide recession •Currency exchange rates (country-specific; in United States, the dollar improved versus other currencies)
Factors leading to higher capital costs:•Need for infrastructure projects in developing nations•Increased project finance costs due to credit crisis
Procurement costs:•Declining procurement price increases projected for 2009, 2010•Shop loads stable in 2009, declining in 2010
20© 2009 Electric Power Research Institute, Inc. All rights reserved.
Other Future Trends Affecting Technology
•Chinese commodities, components will become more focused on export, create competition
•CO2 policy impacts on fuel markets– Pressure on increasing NG, LNG consumption– Longer term, reprocessing and breeder nuclear
fuel cycles
Bechtel Global Supply Trends, 2008 Mid-Year Update
21© 2009 Electric Power Research Institute, Inc. All rights reserved.
Conclusions
• Even with cost escalation and variability, we can conclude that:
– The scale of technology expansion and transformation will be huge.
– No one technology will be a silver bullet – a portfolio of technologies will be needed.
– Baseload technologies will be needed.
– Renewables and efficiency will also play a large role.
– There is no time to lose – technology development lead times are long.
22© 2009 Electric Power Research Institute, Inc. All rights reserved.
Together…Shaping the Future of Electricity
23© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $112/MWh
CO2 Cost = $76/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
24© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $112/MWh
CO2 Cost = $76/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
25© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $112/MWh
CO2 Cost = $76/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
26© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $116/MWh
CO2 Cost = $81/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
27© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $114/MWh
CO2 Cost = $89/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
28© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $114/MWh
CO2 Cost = $89/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
29© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $112/MWh
CO2 Cost = $85/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
30© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $124/MWh
CO2 Cost = $95/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
31© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $123/MWh
CO2 Cost = $96/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
32© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $122/MWh
CO2 Cost = $95/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
33© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $125/MWh
CO2 Cost = $100/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
34© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $123/MWh
CO2 Cost = $96/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
35© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $125/MWh
CO2 Cost = $98/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
36© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $125/MWh
CO2 Cost = $100/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses
37© 2008 Electric Power Research Institute, Inc. All rights reserved.
$64/MWh
$80/MWh
$94/MWh
$122/MWh
CCS in:
T&S (ton) = $10 $30 $10 $30
2020 2030
CoalGasHydroBiomassWind
Coal w/CCSGas w/CCSNuclearOilDemand Reduction
2000 2010 2020 2030 2040 2050
Year
0
1
2
3
4
5
6
7
Thou
sand
TW
h
Nuc
lear
Ele
ctric
ity
Prod
uctio
n C
osts
(200
6 $)
200 TWh ~ 2006 AEP System Generation
Key parameters in 2030 (2006 $)
Wholesale Electricity Cost = $129/MWh
CO2 Cost = $103/metric ton CO2
EPRI 2008 MERGE Sensitivity Analyses