economic tipping point or… opportunity for clean …...u.s. power plants index: 1970 = 1.0...
TRANSCRIPT
Mike Eastman, Strategic Center for CoalNational Energy Technology Laboratory
Economic Tipping Point Economic Tipping Point or… or…
Opportunity for Opportunity for Clean Coal TechnologiesClean Coal Technologies
Carnegie Mellon University October 27, 2005
U.S. Scene for Electric Power & U.S. Scene for Electric Power & Future Energy SystemsFuture Energy Systems------
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NETL• Only DOE national lab dedicated to fossil energy
− Fossil fuels provide 85% of U.S. energy supply• One lab, four locations, one management structure• 1,100 Federal and support-contractor
employees• Research spans fundamental science
to technology demonstrations
Pennsylvania
West Virginia Alaska Oklahoma
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NETL Mission Areas
Strategic Centerfor Coal
AdvancedInitiatives
Strategic Centerfor Natural Gas
and Oil
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0
100
200
NETL FY 2005 Budget: $748 Million
Coal R&D$288M
Gas R&D$45M
Non-FE$223M
Fossil Energy
Program Support
Clean Coal Technology Demonstration $10M
Clean Coal Power Initiative/FutureGen
$81M
Oil R&D$34M
$ Million
DHS
EE*
EA
Non-DOE
Other
$67M*Does not include ~$650M financially managed by NETL for EERE’s PMC
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NETL’s Investment in Pennsylvania
Impacting Economy Through On-Site Operations• Contribute over $69M annually through Federal and
contractor payroll, small purchases, and conferences• Draw nearly 3,000 visitors to Pittsburgh area per year
Impacting Economy Through R&D• $1.3B total value of agreements and contracts• Obligated $61M in FY04 generating 2,440 job-years in PA
−Small businesses - total value of $29M with $6M obligated annually
−Colleges/universities - total value of $292M with $21M obligated annually
FY 2004
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Electricity = Quality of Life Poverty Impacts Global Security / Environmental Options
GD
P pe
r Cap
ita(1
03 $ /
pers
on /
year
)
Electricity / Total Energy Ratio(kWh / kgoe / year)
Luxembourg
Tajikistan
Norway
Sudan
Mexico
United StatesCanada
Japan
Peru
SingaporeSweden
0
10
20
30
40
50
60
0 1 2 3 4 5
World Resources Institute Database, accessed September 1, 2005 http://earthtrends.wri.org/searchable_db/
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Rapidly Increasing Dependence on Energy Imports
Foreign Energy Imports Growing Due to Oil and Natural Gas
Impo
rt P
erce
nt o
f Tot
al C
onsu
mpt
ion
25%
30%
35%
40%
45%
50%
55%
60%
65%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
AEO’05(extrapolation
’02
Increased a total of 7 Points (2025)(~6% per year
over last 3 years)’05
“I urge Congress to pass legislation that makes America
more secure and less dependent on foreign energy.”
President G. W. BushState of the Union Address, February 2, 2005
“I urge Congress to pass legislation that makes America
more secure and less dependent on foreign energy.”
President G. W. BushState of the Union Address, February 2, 2005
Annual Energy OutlookPublication Year
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Energy Use Compared to Economic Growth
80120160200240280320360400440480
1970
1975
1980
1985
1990
199520
0020
0520
1020
15202020
25
Year
Real GDP
ElectricityGeneration
Total EnergyConsumption
$2.72 GDP/kWh
$3. 52 GDP/kWh
$2.46 GDP/kWh
$2.52 GDP/kWh
AEO ‘05
$2.58 GDP/kWh
Coal-firedGeneration
Inde
x: 1
973
= 10
0
GDP: History - U.S. DOC, Bureau of Economic Analysis; Forecast - Annual Energy Outlook 2004 Energy & Electricity: EIA, Annual Energy Review 2002; Annual Energy Outlook 2004
Rev. 061404
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0
500
1,000
1,500
2,000
2,500
3,000
Coal Nuclear Natural Gas Renewables Oil
AEO'00 AEO'01 AEO'02 AEO'03AEO'04 AEO'05 '03 Actual
+774
+920
+130
+29
+66
3,029
LNGB
illio
n kW
h
LNG
AEO Estimates of Generation Fuel Sources by 2025
EIA, Annual Energy Outlook 2000, 2001, 2002, 2003, 2004 and 2005* - AEO 2000, 2001, 2002 trendline extrapolation from 2020 to 2025
Trends for Dramatic Changes in North American Natural Gas-fired Generation Forecasts; LNG Acceptance Begins to Displace Coal in AEO’05
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Energy Policy Needs Pyramid
socialacceptability
natural resourcesefficiency
cost efficiency
securityof supply
access tocommercial energy
debate possible
nodebate
possible
satis
fiers
defic
it ne
eds
Christoph W. Frei, The Kyoto Protocol – a victim of supply security? or if Maslow were in energy politics; Energy Policy 32 (2004) 1253-1256
“Can we observe similar patterns in historically observed energy priorities?”
“In Maslow’s pyramid, hierarchy illustrates that only once lower order needs of emotional
well being are satisfied do we concern ourselves with higher order needs of
influence and personal development.”
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Broad Environmental Concerns About Coal
Cradle to Grave: The Environmental Impacts from Coal,Clean Air Task Force, Boston, MA,June 2001
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0
1
2
3
4
1970 1980 1990 2000
Coal Use
Contaminant Emissions Down SharplyU.S. Power Plants
Inde
x: 1
970
= 1.
0
ElectricityGeneration
Nitrogen Oxides
Sulfur DioxideParticulateMatter
Natural Gas Use
YearEPA, National Air Quality and Emissions Trends Report, 1999 (March 2001)
DOE, EIA Annual Energy Review
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0
20
40
60
1966 1976 1986 1996
330 GW of Coal-Fired CapacityHistoric U.S. Generation Capacity Additions
OtherNatural GasNuclearCoal
NPC Study 2003 based on EIA, Platt’s , AEP
GW
Inst
alle
d C
apac
ity
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Coal Technologies Must Be Cost Competitive !
6
DOE Report #DE-AC-01-94FE62747, April 2001
0 1 2 3 4 5 6 7
Natural Gas Price ($ / MMBtu)
Cos
t of E
lect
ricity
(Cen
ts /
kWh)
Cost $500 -$600 / kW
Natural Gas CC
Coal-Fired Power PlantCapital Cost $1000 - $1200 / kWCoal Price $1.00- $1.25 / MMBtu
5
4
3
2
1
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Increasing Trend in Natural Gas Price Forecasts
Forecasts of Near-term Price Troughs Hinder Coal Plant Development
$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00$5.50$6.00$6.50$7.00$7.50$8.00$8.50$9.00
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
’99’00’01’02
’03’04’05Actual
AnticipatedLNG Supply/Price
Effect AlaskanPipeline
$/M
cf (W
ellh
ead)
Annual Energy OutlookPublication Year
RJA (10/10/05)
EIA October 2005 STEO +$3.18/Mcf delta from AEO’05 in 2006 (+$72 Billion to Consumers)
EIA, Annual Energy Outlook 1999, 2000, 2001, 2002, 2003, 2004 and 2005Short Term Energy Outlook, October 2005
Raymond James “Energy Stat of the Week” 10/10/05 (Henry Hub reduced by $0.75)
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EIA Discrepancies in 12 Month Forecast4 Year Average… Actual Price 25% Off Forecast (29% Last 3 Years)
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
1999 2000 2001 2002 2003 2004 2005
Actual
$/M
cf (H
enry
Hub
)
$7.251/31/05
-9%-11%+41%
+1%
$5.73
$1.52
-13%
-28%
-33%
-26%EIA
Forecasts*(Actual Avg.
25% Off)
*-EIA wellhead forecast adjusted to Henry Hub using difference between year’s actual Henry Hub and Wellhead averages
Consistently Underestimated
One Year Price Forecast Comparison2001 - 2004
RJAForecasts
(Actual Avg.16% Off)
Actual Henry Hub prices per January 2005 Short Term Energy OutlookRaymond James “Stat of the Week”, February 7, 2005
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Declining Domestic Natural GasProduction Forecast
16.017.018.019.020.021.022.023.024.025.026.027.028.029.030.0
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
’02
’03
Tcf/Y
ear ’04
AEO’05 Domestic Production Reduced by an AmountLarger Than Alaskan Pipeline (>1.5 Tcf/yr in 2020)
Annual Energy Outlook 2002, 2003, 2004 and 2005
Annual Energy OutlookPublication Year
’05
CERA(Midwinter Update: North American Natural Gas Market Review 1/20/05)
Lehman Brothers (4Q’04 Industry Survey 1/25/05)
- 6.6 Tcf(-23%)
- 2.2 Tcf(-8.2%)
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Exxon Mobil LNG Forecast
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029
AEO ’04
Exxon Mobil 12/04
Percent of total natural gas supplyand Bcf/d productionin 2010, 2020, 2030
AEO ’05
Developers’ Perspectives Even More Aggressive
Tcf/Y
ear
Reference: Exxon Mobil; The Outlook for Energy, A 2030 View; December 2004; http://media.corporate-ir.net/media_files/irol/11/115024/presentations/xom_120204.pdf
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Status of North American LNG DevelopmentExisting and Proposed
LNG Terminals • 5 existing import terminals (including Energy Bridge)
• 19 FERC / Coast Guard / Canadian / Mexican approved sites
• 21 additional proposals
• 8.4 Tcf supply if all approved plants built
• EIA forecast for U.S. LNG = 6.4 Tcf by 2025U.S. Jurisdiction
FERC
U.S. Coast GuardAs of September 27, 2005
* U.S. pipeline approved; LNG terminal pending in Bahamas FERC Office of Energy Projectshttp://www.ferc.gov/industries/lng/indus-act/exist-prop-lng.pdf
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Resurgence In Gas-fired Generation’sContribution to Electricity Production
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
32.0%
34.0%
36.0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
’02
’03
% T
otal
Ele
ctric
ity S
uppl
y
’04
’01
’05
Increased Based on “Revisions in Relative Capital Costs and Efficiencies for New Coal- and Gas-fired Generating Capacity”
EIA, Annual Energy Outlook 2001, 2002, 2003, 2004 and 2005
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Are Risks of LNG Capital Costs Considered?$/
kW
New Gas-fired Generation Will Be Increasingly Requiredto Secure a Reliable Fuel Source, Adding ≈ $500/kW
0200400600800
1,0001,2001,400
Coal-fired LNG Derived Gas-firedNGCC
Generation Equipment Regasification Tankers Liquefaction Upstream Gas Dev.
$149
$185
$118$48
$650
5 years to complete
4 years to complete
geopolitical risk?
geopolitical risk?
References: QatarGas III Costs, Gulf States Newsletter, April 19, 2004;Calculated Based on 375 Bcf/y LNG Train per 10,000 MW Gas-fired Capacity;
Deutsche Bank, Global LNG, Exploding the Myths, July 22, 2004
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U.S. is Poorly Positioned on Price for Delivery of LNG ($/mmbtu)
< 2.5 < 3 < 4 < 4 < 3
Graphic: Cambridge Energy Research Associates.31001-10
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Conclusion: Gas-fired Generation Growth Overestimated; Cost Underestimated
• Generation growth, at one time expected to represent 1,200 BkWh, reduced to 100 BkWh, absent imported LNG
• Costs, expected to represent significant advantage over coal at $500/kW, left out import costs-U.S. pays highest shipping-raises cost competitiveness concern
• Roughly 2 LNG supply systems (365 Bcf/year each) required to support 20,000 MW of NGCC
• ConocoPhillips Qatar Gas III: $5 billion for 1 Bcf/day of gas (in 2010)*
• Actual cost of gas-fired generation -- $500/kW for plant plus $500+/kW for fuel supply infrastructure
* Matthew Simmons Coronado Club Speaker’s Luncheon, Houston, Texas, June 9, 2004
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Coal Production History And Forecast
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
MM
st/Y
ear
Still A Significant Challenge For Nation’s Miningand Transport Industries
AEO ’05
+ 405MMst
(+37%)
Annual Energy Outlook 2005Annual Energy Review 2003
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Pull-back In Coal-fired Contributionto Electricity Production
44.0%
45.0%
46.0%
47.0%
48.0%
49.0%
50.0%
51.0%
52.0%
53.0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
’02
’03
Coa
l % o
f Tot
al E
lect
ricity
Sup
ply ’04
’01
Successful LNG Introduction &Alaska Pipeline
’05
Reflects a (Model) Preference for Imported LNGOver Coal-fired Generation
EIA, Annual Energy Outlook 2001, 2002, 2003, 2004 and 2005
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New Coal-fired Capacity ForecastAEO’04 vs. AEO’05
Another Decade of Insufficient Domestic Market Scaleto Support 13,000 MW/Year Industry
01,000
2,0003,000
4,0005,000
6,0007,0008,000
9,00010,000
11,00012,000
13,00014,000
15,00016,000
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
AEO'04 AEO'05
Cap
acity
Add
ed M
W
~10 Years Until Real Growth Begins
Removed 6,650 MW
Annual Energy Outlook 2005
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Coal Capacity History and Forecast AEO’05
Will Nation’s Industry be Prepared and Capableof Meeting This Coal Plant Forecast?
Cap
acity
Add
ed M
Ws
01,0002,0003,0004,0005,0006,0007,0008,0009,000
10,00011,00012,00013,00014,00015,00016,00017,00018,00019,00020,000
1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Capacity Addition Levels Not Seen
in 40 Years?
Industry Growth Trend Not Seen in
50 Years?
20 YearMarket Trough
Forecast - Annual Energy Outlook 2005Historic Data - UDI 2001 Operating Data
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Government’s Coal R&D Investment Strategy
Demonstration Projects• Clean Coal Power Initiative• ~ $49 million in FY05
Financial Incentives• Encourage investment
in commercial projects with advanced technology
Market PenetrationTechnology Development
R&D• Core R&D program• FutureGen• $300 million in FY05
Comm
erc ial Rea dines sNETL
NETLNETL
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Clean Coal Technology Development Must Address Near and Long Term Energy Needs
Short-term Needs:• Maximize existing fleet service• Provide advanced technologies
for new, near term plants• Provide technology bridge to
transition to future plants.
Long-term Needs:• Zero emissions coal technology• Reliable coal technology• Cost competitive coal
technology• Technology for Hydrogen
Economy
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2000 2005 2010 2015 2020 2025O2
Membrane
AdvancedGasifier/
Combustor
SequestrationReady Integrated
Adv. Power System
Near-Zero Emission Plants with
Sequestration
Integrated Adv. Power System
Sequestration Ready Near-Zero Emission Power
Plants
Integrated Adv. Power System w/Fuel Cell
IGCC &CFB
Demos
Envr. Control(Hg, water, byproducts)
Gas Cleaning Advances in System
ComponentsATS Syngas Turbine
SECA Fuel Cell
ATS Turbine
CO2 Capture
CO2 Sequestration
Sequestration ReadyNear-Zero Emission
Plants w/CoproductionPower/Fuel
Coproduction Liquids
H2Membrane
Fuel Cell/IGCC Test
IGCC Demos
FutureGen-Coproduction Hydrogen/Power/Sequestration
Integrated Technology Roadmaps Drive R&D
Technology Module Demos
Integrated Plant Demos
Near-Zero Emission Plants
CCPI Round 1
CCPI Round 2
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ReferencePlant 2010 2020
Plant Efficiency (HHV) 40% 45-50% 50-60%
Availability >80% >85% >90%
Plant Capital Cost$/kW
900 – 1300 900 – 1000 800 – 900
Cost of Electricity¢/kWh
3.5 3.1 <3.0
Performance Targets Keep R&D Focused & On Track
(Represents best integrated plant technology capability)
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FE/NETL Coal Program ComponentsR&D Program FY05 ($300 M)
• Central Systems (~$85M)− Innovations for Existing Plants (~$19M)− IGCC (~$46M)− Combustion (~$5M)− Turbines (~$15M)
• Distributed Generation (~$77M)• Sequestration R&D (~$45M)• Fuels (~$32M)• Advanced Research (~$43M)• FutureGen (~$18M)
Demonstration Program• Clean Coal Power Initiative (~$49M)
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Integrated R&D Developments Required for Zero-Emissions Coal Systems
Gas CleaningGas CleaningGasificationGasificationOxygenOxygen
GasStreamCleanup
Products/Products/ByproductsByproductsUtilizationUtilization HH22/CO/CO22
SeparationSeparationFuels/Chemicals
Fuel Cell
High Efficiency Turbine
Electricity
LiquidsConversion
ProcessHeat/Steam
Coal
OxygenMembrane
Gasifier
H2
Figure 2
PowerPower
FuelFuel
CO2
Fuels and Fuels and ChemicalsChemicalsCOCO22
SequestrationEnhanced Oil Recovery
SequestrationCoal Seams Saline Formation
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Energy System Dynamics− Fuel Cells / Hybrids− Gas Combustion− Carbon Capture− FutureGen
Computational and Basic Sciences− Computational Chemistry− Device Simulation− Advanced Fuel Systems− Gas Hydrates
Geological and Environmental Systems
− Carbon Sequestration− Clean Air Technology− Water & Coal Utilization
Byproducts
Conduct Intramural ResearchNETL Focus Areas
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University/NETL R&D InitiativeA New Collaborative R&D Effort
Collaboration = Grant ProgramRelationships that provide
opportunities for mutual benefit and results beyond what any single organization or sector
could realize alone.Leader to Leader Institute-2005
17 Projects Recently Selected ~ $2.5M; CMU gets 5
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Program Model
Mission Relevance
NET
L Te
chni
cal C
apab
ilitie
s
ExistingProgramFocus
Fits with FutureEnergy/EnvironmentalFocus
Sust
ains
, Sh
arpe
ns E
xist
ing
Dev
elop
mor
e,be
tter,
or n
ew
Address N
ational G
rand Challe
nges
18
25
4
37117
36 30
12
17
26
27
19
6
1431
1
9
29
3239
38
28
13
10
2
3
24 33 16
8
23
35
40
21
22
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Advanced Research - Power SystemsIngenuity, innovation and implementation
R&D Activities• Advanced Materials• Novel Sensors & Controls• Adv Power Plant Simulations• Bioprocessing Technologies• Educational Foundation
Programs
Computational Energy SciencesScientific Consortium, visualization,
Modeling, and simulation
ObjectivesBridge gap between basic andapplied researchFoster development of innovative systemsImprove efficiency and environmental performance, reduce cost
Advanced materials consortium for ultra-supercritical power plants
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IGCC Future Challenges
• Lower capital cost− $200 to $400 / kWe reduction
• Greater reliability− Single train availability
> 85 to 90%
• Improved efficiency− 60% HHV
• Near- zero emissions (including CO2)− Improved separation/capture technology− Low cost, safe, permanent sequestration options
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IGCC Technology Issues
H2/CO2 Separation
Fuel Gas
Oxygen MembraneGas
Cleaning
Durability of MembraneIntegration with Overall Process
Oxygen
Coal
GasificationCO2
Hydrogen
Cost-Effective Multi-Contaminant Control toUltra-Clean Specifications
Moderate TemperatureHg Removal at Elevated
TemperaturesIntegrated Specifications
with DownstreamProcess Requirements
Integration with NOx Reduction Processes
Injector ReliabilitySingle Train AvailabilityDurability of Refractory MaterialDurability and Accuracy of
Monitoring DevicesAlternative FeedstocksFeed System ReliabilityHeat RemovalTemperature Measurement & Control
Low-rank Coal
Durability of MembranesLow Flux Contaminant SensitivityHeat Removal
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Contributions to Program TargetsGasification Systems
Projects Cost Efficiency Reliability H2 Product & CO2 Capture
TransportGasifierCompactGasifierAlstom Chemical LoopingGE ChemicalLoopingStamet Pump Dry Feed
Instruments & Materials
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Driving Down Cost For Gasification Systems(1)
(> 40% Cost Reduction Potential from R&D)$/
kW
Today 2010 2020
650
600
550
500
450
400
350
300
$355 /kW
Regenerable SorbentsAir Separation Membranes
System Integration
Dry Fuel Flexible FeedsTransport Gasifier
Reference Plant 625/kW2020 Plant1 355/kW
1High Efficiency Near Zero Emission
$625 /kW
(1) Air Separation, Coal Feed, Gasification, Gas Stream Purification/Separation
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Why Interest in IGCC is Rising
• Recognition of continuing high-price of natural gas
• Excellent environmental performance of IGCCs (SO2, NOx, particulates and solid waste)
• Potential for economic control of mercury emissions
• Growing environmental community view of IGCCs as BACT for coal systems
• Consolidation of IGCC development companies
• Uncertainty of carbon management requirements and potential suitability of IGCC for CO2 controls
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Tampa ElectricIGCC Power Plant
Low-NOx Burners
Advanced Pollution Controls• Now installed on 75% of U.S. coal plants• 1/2 to 1/10 cost of older systems
CCT Program Success Stories
PSI Energy Wabash RiverIGCC Power Plant
Proven Advanced CoalPower Systems• Two “super-clean” coal-based IGCC
plants operating reliably• World’s largest CFBC power plant
JEA CFBC Power Plant
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IGCC Technology in Early CommercializationU.S. Coal-Fueled Plants
• Wabash River − 1996 Powerplant of Year Award*− Achieved 95% availability
• Tampa Electric− 1997 Powerplant of Year Award*− First dispatch power generator
Nation’s first commercial-scale IGCC plants, each
achieving > 95% sulfur removal > 90% NOx reduction
*Power Magazine
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Clean Coal Power Initiative
• Demonstrate emerging technologies in coal-based power generation− $1-2 billion, 10-year program − 50/50 cost-shared− Government / industry
partnerships
• Coal key component of National Energy Policy
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NeuCo, Inc. Integrated Optimization Software
$8M – DOE $10M – NeuCo
Projects in CCPI – Round 1Great River Energy
Lignite Fuel Enhancement$11M – DOE$11M – GRE
U. of Kentucky Research FoundationMulti-Product Coal Utilization
$4M – DOE $5M – UK
Western GreenbrierClean Coal Co-Production
$107M – DOE $107M – WGC
Wisconsin Electric Power Co.TOXECON Multi-Pollutant Control
$25M – DOE $25M – WEP
WMPI PTY., LLC Coal-to-Clean Fuels and Power
$100M – DOE $512M – WMPI
Rev. 071404
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Projects in CCPI – Round 2
Southern Co. Services, Inc. Southern Co. Services, Inc. IGCC (Transport Gasifier)IGCC (Transport Gasifier)
$235M $235M –– DOE DOE $322M $322M –– Southern Co.Southern Co.
Excelsior Energy Inc. Excelsior Energy Inc. IGCC (EIGCC (E--Gas)Gas)$36M $36M –– DOE DOE
$1,149M $1,149M –– ExcelsiorExcelsior
Pegasus Technologies, Inc.Pegasus Technologies, Inc.AI / SimulationAI / Simulation
$6M $6M –– DOE DOE $6M $6M –– PegasusPegasus
Peabody EnergyPeabody EnergyMultiMulti--Pollutant ControlPollutant Control
$19.5M $19.5M –– DOE DOE $59.4M $59.4M –– PeabodyPeabody
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CCPI Priority Technologies($49 million in FY2005)
Technologies for
Zero-Carbon Emission
Plants
• Advanced Power Technologies− Improved efficiency / lower capital cost− Sequestration friendly
• Sequestration
Technologies for
Clear SkiesCompliance
• Emission control− Mercury− NOX
Round 2 Round 3 Round 4 Program Goals
Rev. 071404
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Reducing CO2 Emissions(All Fossil Fuels & Energy Sectors Contribute CO2 Emissions)
Industry29%
Industry29%
Commercial18%
Commercial18%
Residential21%
Transportation32%
Transportation32%
Oil43%Oil
43%
Coal36%Coal36%
Natural Gas21%
Electricity39%
Electricity39%
Other30%
Other30%
Transportation32%
Transportation32%
United States Carbon Dioxide Emissions(By Source & Sector)
AEO2004
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Carbon Sequestration Program Structure
Infrastructure7 Regional Partnerships
• Engage regional, state, local governments
• Determine regional sequestration benefits
• Baseline region for sources and sinks
• Establish monitoring and verification protocols
• Address regulatory, environmental, & outreach issues
• Test sequestration technology at small scale
Power/SequestrationComplex
• First-of-kind integrated project• Verify large-scale operation• Highlight best technology
options• Verify performance &
permanence• Develop accurate cost/
performance data• International showcase
IntegrationBreak-
throughConcepts
Measurement, Monitoring & Verification
Non-CO2GHG
Mitigation
Sequestration• Direct CO2
storage• Enhanced
natural sinks
Core R&D
Capture of CO2
Initiated FY 2003
Initiated FY 2004
Carbon Carbon SequestrationSequestrationLeadership Leadership
ForumForum
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Systems Analysis Used to Focus and Track R&D (Example cost reduction potential for CO2 capture developments)
32%
23%
17%
10%
0
5
10
15
20
25
30
35
A B C D
O2 Capital 4 %
Perc
ent I
ncre
ase
in C
OE
(Rel
ativ
e to
No
Cap
ture
Cou
nter
part
)
O2 Load 5 %
Adv. Sorbent 4 %
Co-Storage 1 %
Shift Mem. 2 %
O2 Membrane 9 %
Shift Mem. 4 %
O2 Membrane 9 %
Adv. Sorbent 8 %
A—Current ScrubbingB—Oxygen MembraneC—O2 Membrane + WGS Membrane +
Adv. SorbentD—O2 Membrane + WGS Membrane +
Adv. Sorbent + Co-Storage H2S/CO2
5.5 c/kWh 5.2 c/kWh 4.9 c/kWh 4.6 c/kWh
Goal
Basis: No Capture COE 4.2 c/kWh 400 MW Net Output90 % CO2 Capture80% Capacity FactorSaline Formation Storage
…the results of NETL’s systems, analysis and
planning activity…
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FutureGen: A Presidential Initiative
One-billion-dollar, 10-year demonstration project to create world’s first coal-based, zero-emission electricity and hydrogen plant
President Bush, February 27, 2003
• Produce electricity and hydrogen from coal using advanced technology
• Emit virtually no air pollutants
• Capture and permanently sequester CO2
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FutureGen Uses Cutting-Edge Technologies
• Can accommodate technology innovations with minimal modifications − Emerging from national or international R&D− Slipstream or full stream tests− Over life of project
• Some emerging new technologies− Membrane-based O2 and H2 separation− High-efficiency hydrogen turbines− High-throughput gasifiers− Monitoring systems− Fuel-cell systems FutureGen will be a global
showcase of very best technology options for coal-based systems with zero carbon emissions
FutureGen will be a global showcase of very best technology options for coal-based systems with zero carbon emissions
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Energy WildcardsPerceptions About LNG Safety ?
World Oil Production Peaking ?
Prod
uctio
n
Time
Global Warming Concerns ?
200 150 50
350
300
250
200
100 0
20-2-4
∆Tatm (Vostok)
CO2 (Vostok)
Deg
rees
C
ppm
CO
2
Time, kyrs
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Signals of an Economic Tipping Point or Opportunity for Coal
What to look for…• Serious Legislative commitment to expand
domestic energy resources; Recognition of sharply declining energy security
• Continued high natural gas price; Evidence of declining supply
• Slow development for future LNG plants; More safety/security reports; Commercialization learning curve for offshore LNG; Current LNG business model (Expectation of Low Gas Prices, Independent of Oil) unproven
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Signals of an Economic Tipping Point or Opportunity for Coal (continued)
What to look for…• Regional electricity shortages 2007-2010
due to insufficient fuel for gas-fired generation, lack of alternative generation
• Meaningful progress on new coal-fired or nuclear project(s), by respected industry leader, Shifts in industry philosophy (risk management); Academia and industry focus on human resource needs
• Implementation of Energy Policy Act (converting policy to actions)
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Closing Comments
• Coal must continue play a key role in securing healthy U.S. economy
• Must maximize existing fleet performance as bridge to the future
• New clean coal plants needed soon – we see challenging but “do-able” path forward for coal
• R&D will show near-zero emission coal-based energy is possible…and affordable?
Rev. 061404
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Visit Office of Fossil Energy & NETL Websites
http://fossil.energy.gov/ www.netl.doe.gov