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

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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.

• Stabilization means that GLOBAL emissions must peak in the decades ahead and then decline indefinitely thereafter.

Wigley, Richels and Edmonds. 1996. "Economic and Environmental Choices in the Stabilization of Atmospheric CO2 Concentrations," Nature. 379(6562):240-243.

4

Assumed Advances In• Fossil Fuels

• Energy intensity• Nuclear

• Renewables

The “Gap”

Gap technologies

• Carbon capture & disposal

Adv. fossil

• H2 and Adv. Transportation

• BiotechnologiesSoils, Bioenergy, adv. Biological energy

Stabilizing CO2

Base Case and “Gap” Technologies

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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.

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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.

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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

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“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 IncentivesAssess 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 PlantsMinimize time, costs, and risks in the design, permitting, construction, and operation phases

3. Accelerate and Augment RD&DComplement existing programs (e.g., FutureGen) with industry funding and support to accelerate deployment

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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

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CoalFleet Operating Concept

Early Deployment Projects

Supplier/Industry Experts

• Process Licensors• OEMs• EPCs• Operators

CoalFleet Major Deliverables• Incentives Analysis• Permitting Analysis• Outreach Materials• Knowledge Base• User Design Basis Specs• Pre-Design Specs• Generic Design Guidelines• RD&D Plan

Task Working Groups• Incentives• Permitting• User Design Basis Spec• RD&D• Others TBD

World-ClassExpert

WorkingGroup

(Independent)

Support

Support

Support

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2005 2010 20202015

3

Early Deployment UnitsEarly Deployment Units

Early Deployment UnitsEarly Deployment Units

1

2

Next Generation UnitsProject 1Project 2

Project 3Longest-term RD&D

(e.g., CO2 1 MTPY Demonstrations)

Risk Reduction, Permitting and Incentives

Early Deployment UnitsDesignGuidelines

RD&DAugmentation

Reg/Fin Incentives

EPRI CoalFleet Phase I

Next Generation Units

EPRI CoalFleet Phase II

Early Deployment Units

DOE Coal & CO2 RD&D

Next Generation UnitsNext Generation Units

Next Generation UnitsNext Generation Units

FutureGen

DOE R&DCCPI Demonstrations

Co

alF

leet

“CoalFleet for Tomorrow” CoalFleet Supports Deployment

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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

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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

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Economics of IGCC and USC PC with CO2 Capture (Gasification Technologies are not all alike!)

Technology IGCC Texaco Quench

IGCC Texaco Radiant SGC

IGCC E-Gas

IGCC Shell

PC Ultra-Supercritical

MW (no capture)

512 550 520 530 600

TPC $/kW (no capture)

1300 1550 1350 1650 1235

COE $/MWh (no capture)

50.1 55.7 50.2 57.2 45.0

MW (with capture)

455 485 440 465 460

TPC $/kW (with capture)

1650 1950 1900 2200 2150

COE $/MWh (with capture)

62.7 69.6 68.9 75.1 76.2

Avoided Cost of CO2, $/mt

18/28 22/38 29/38 29/47 42

Nominal 450 MW net Plants, Pittsburgh #8 Bituminous Coal, All IGCC with spare gasifiers

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Background Slides

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IGCC with and without CO2 Removal

Air

Air

ASU

ASU

O2

O2

Gasifier

Gasifier

Coal

Coal

Slag

Slag

Gas Clean

Up

Gas Clean

Up

Shift

CC Power Block

CC Power Block

POWER

H2

Sulfur CO2

POWER

Sulfur

IGCC

H2 & CO2

(e.g.,FutureGen)

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Existing Coal-based IGCCs

Wabash (Indiana)

Buggenum (Netherlands)

Polk (Florida)

Puertollano (Spain)

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Regional US Coal Differences Favor Multiple Advanced Coal Options

SC- FBC

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

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

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Gap Analysis Showing COE Components

0

5

10

15

20

25

30

35

40

45

50

55

IGCC PC-USC PC-Sub

Lev

eliz

ed C

OE

($/

MW

h)

Fuel

O&M

Capital

$3.80/MWh,or 7.5%

Assumes coal at $1.50/MBtu, 80% c.f., and 20-year book life

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Purpose of Early Deployment Incentives

To bring the value of advanced coal technologies to near that of competing alternatives in terms of Cost of Electricity (COE)

Coal IGCC

(USC PC,SC CFBC)

Conv. Coal PC

NGCC

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What Are the “Gaps”? Where Will R&D Help?Competitiveness Sensitivity: IGCC Example

PC-Sub

Constant $ Levelized COE

52.3

7,767

1,215

72

84.6

63.9

9,493

1,485

88

103.4

45.0 50.0 55.0 60.0

Capacity Factor

Total Plant Cost

Net Heat Rate

Fixed O&M

Aux. Power

PC-Sub

+/- 10% on each item

Example Better Refractory, Sparing etc

Design Guidelines, Sparing etc

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Standard Plant Design Guidelines

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

More Accurate Decisions and a 2–3 Year Faster Process