assessing clean coal and clean …...2018/06/02 · assessing clean coal and clean technology...
TRANSCRIPT
ASSESSING CLEAN COAL AND
CLEAN TECHNOLOGY INITIATIVES IN
NORTH AMERICA AND GLOBAL
MARKETS
Shannon Angielski, Executive Director, CURC
Mines and Money Americas Summit
The Evolving Energy Mix and the Role of Battery Metals, Renewable Energy Sources, Uranium and Fossil Fuels in the New Power Paradigm
October 2, 2017 – Toronto, Canada
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CURC Members
Companies in orange indicate
Steering Committee Members
*CURC Leadership Council
Coal Producers
Arch Coal, Inc.*
Cloud Peak Energy Resources LLC
Lignite Energy Council
Peabody Energy*
Equipment Suppliers
B&W Power Generation Group, Inc.*
Caterpillar Global Mining
General Electric*
Mitsubishi Heavy Industries America,
Inc. (MHIA)
Labor Unions
United Mine Workers of America
International Brotherhood of Boilermakers
International Brotherhood of Electrical
Workers
NGOs
ClearPath Action
CoalBlue Project
Research Organizations
Battelle
Electric Power Research Institute (EPRI)
Gas Technology Institute
University of North Dakota Energy &
Environmental Research Center
State Organizations
Energy Industries of Ohio
Greater Pittsburgh Chamber of
Commerce
Illinois Coal Association
Kentucky Energy & Environment Cabinet
Southern States Energy Board
West Virginia Coal Association
Wyoming Infrastructure Authority
Technology Developers
LP Amina LLC
NET Power
Trade Associations
American Coal Council
American Coalition for Clean Coal
Electricity (ACCCE)
Edison Electric Institute (EEI)
National Rural Electric Cooperative
Association (NRECA)
Universities
Lehigh University
Ohio State University
Pennsylvania State University
Southern Illinois University
University of Kentucky/CAER
University of Wyoming
West Virginia University
Utilities
American Electric Power (AEP)
Basin Electric Power Cooperative
Duke Energy Services
LG & E and KU Services Company
Southern Company
Tri-State Generation &
Transmission Association
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What is the U.S. Coal Industry
Facing? Market forces:
• No new capacity markets
• Strong price, availability and competition from shale gas
• Divestment trends challenge support in financial markets
Regulations:• More stringent controls of
conventional pollutants
• Cooling water, coal ash, regional haze are all challenging the current coal fleet
• Greenhouse gas regulation – or not?
Public policies – financial incentives or regulatory requirements – favor renewables and non-coal options
No longer a “given” that coal must be an “option”• Shift to renewables and natural gas
• EIA & IEA latest analyses – the need for coal is significantly diminished
• Over-reliance on existing fleet
Less support for coal than historically• General public is indifferent
• Political support has waned in recent years
Development of Coal with Carbon Capture Utilization & Storage (CCS) necessary for low carbon coal use in the future, but not yet ready
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5
Industry Trends
Natural Gas; Availability &
PricingDecreasing
Demand Growth
Aging Nuclear &
Coal Fleets
Increasing Distributed Generation
New Technologies
Environmental Regulations
Customer Trends
What is Driving Coal Technology
Innovation in the U.S.?
Source: Duke Energy
6
U.S. Generation2016
Natural Gas
34%
Coal
30%
Nuclear
20%
Renewables
15%
Petroleum
1%
Notes: Natural gas includes combined cycle, combustion turbine and
other gas-fired systems. Renewables includes conventional hydro and
pumped storage.
Existing Fossil Fuel Generation Represents Two-Thirds
of U.S. Electric Generation at Low Cost
2016 Generation: https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1
Electricity for Households: IEA Key World Energy Statistics 2017
32.7 ¢
22.51 ¢ 23.69 ¢
12.67 ¢
0
5
10
15
20
25
30
35
Germany Japan UnitedKingdom
UnitedStates
Household Electricity Costs (cents/kWh)
Low-cost power from the nation’s existing fossil fuel fleet keeps U.S. electricity
prices below those of other free market nations
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U.S. Projections for Coal Use
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EIA’s Projection: Modest to No New Coal
Through 2040
Source: DOE/NETL Historic Data: Ventyx Velocity Suite; Forecasted Data: EIA AEO 2013
Historic Forecast
Existing (AGING) coal fleet will generate 38% of electricity generation in
2040 – almost the same as today?
0
5
10
15
20
25
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99
Cap
acit
y (G
W)
Age
99% Existing Baseload Coal-fired Capacity Aging Out in 23 Years
New Coal Capacity
Existing Coal Capacity Existing Nuclear Capacity
New Nuclear Capacity
20402017
Reference – Ventyx Velocity Suite (existing units and announced retirements- EIA AEO 2014 (forecasted additions and Retirements)
60 years or older by 2040
Coal: 168 GW (66%)
Nuclear: 43GW (42%)
Virtually no new Coal Capacity and very little Nuclear Capacity to
make up for aging and retired units
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Without Coal, a Future that Relies on Natural
Gas and Renewables?
Environmental
regulations for new &
existing sources
Abundant, low cost
shale gas
Renewable Portfolio
Standards
Federal & state
renewable subsidies
Aging fossil &
nuclear fleet
No new coal or
nuclear plants in
planning to replace
aging fleet
What is Happening
Today in the U.S.
Electric Generation - 2016
Source: EIA Annual Energy Outlook 2017 and AEP
Natural Gas
34%
Coal
30%
Nuclear
20%
Renewables
15%
Natural Gas
75%
Renewables
(non-hydro)
15%
Hydro
10%
2040 Electricity Generation
by Fuel (Hypothetical)
Natural Gas
34%
Coal
30%
Nuclear
20%
Renewables
15%
Petroleum
1%
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Why is Technology Necessary?
WEO Special Report on Energy & Climate Change
Changing Dynamics of Power Generation
(Source: IEA WEO 2015)
Internationally, coal-based power plants will
remain the largest source of electricity
generation until 2040 at 29%.
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Importance of Technology
*Source: IPCC, 2014
“Carbon capture and storage (CCS) is the only technology able to deliver significant emissions reductions from the use of fossil fuels. CCS can reduce
emissions not only from power generation, but also from industrial sectors such as iron and steel, refining, petrochemical, and cement manufacturing.”
– International Energy Agency (DATE)
Reductions from
Carbon Capture
“Many models could not limit warming to below 2°C if bioenergy, CCS and their combination are limited” Source: International Panel on Climate Change, 5th Assessment report, 2014
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Technology Must Address the Different
Coal Markets:
Apply technologies to improve the efficiency, reliability,
and flexible operations of the existing fleet that provides
affordable, resilient and reliable electricity
Incentivize new, state of the art technologies and
construction of new and improved fossil fueled
generating plants to ensure energy security through a
balanced portfolio of generation options
Double down on funding for RD&D to accelerate
development of new, transformational coal technology
options
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What About Low Carbon Coal
Technologies? High efficiency, low emissions coal technologies
• Global opportunities for building new, highly efficient coal
• In the U.S., market is driving investments towards low cost natural
gas
• Highly efficient coal in the U.S. likely required to be “CCS Ready”
Carbon capture and storage technologies
• Still an immature and costly technology for power generation
applications
• Technologies in development that have transformational attributes
that will change the way in which coal is converted to energy
• Opportunity in the U.S. for coal replacement options with aging fleet
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Current Carbon Capture Technology
is too Expensive Levelized Cost of Electricity
for New Unit Commencing Operation in
2022
Le
velized
CO
E, 2
016 $
/ M
Wh
Source: EIA AEO 2017 and *Coal w/o CCS from EIA AEO 2016
0
20
40
60
80
100
120
140
Coal w/oCCS*
Coal - 90%w/CCS
AdvancedCombined
Cycle
AdvancedCombined
Cyclew/CCS
Nuclear OnshoreWind
Solar PV
VOM
FOM
Cap
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Economic Potential of CO2-EOR in the US
Price of Oil: Bloomberg Energy
Represents over
$14 Trillion in
domestic crude oil
sales at
$50 -$52/barrel of oil
Regional Distribution of CO2-EOR Potential
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Falling Costs for Other Clean Energy
Technologies in the U.S.
As witnessed by the deployment
curve with renewable energy
technologies, we know that
improved technologies, coupled
policies to support the successive
application of CCS, will reduce the
cost of these technologies over
time.
Each of these technologies has dropped 40-90% in cost in the
U.S. since 2008
Indexed Cost reductions since 2008. (Source: energy.gov/fe)
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New Technologies Under Development
Technology Methods Description
Pressurized Oxygen
Combustion
Entrained Flow
& Fluidized Bed
The combustion of fossil fuels in nearly pure oxygen, rather than
air, carbon capture in power plants. Pressurized oxygen-
combustion oxygen to the combustion process by separating
oxygen from air.
Chemical Looping MeOx and CaOx A metal oxide instead of air is used as a carrier to provide the
oxygen for combustion in the fuel reactor or boiler.
SCO2 Cycles Indirect & Direct Replaces steam in traditional rankine cycle with supercritical CO2
as the working fluid. Enables compact turbomachinery to be used
with higher temperature cycle and results in significantly improved
performance.
Advanced
Ultrasupercritical
Materials
700° C+ and
high pressure
materials
Development of components using AUSC materials will enable
highly efficient combustion systems and support other high
temperature and pressure technologies under development
Carbon Capture Pre- and post-
combustion
Advances in solvents, sorbents and membranes focused on
lowering regeneration energy requirements, higher CO2 adsorption
capacity, improved permeability and selectivity, and lower costs.
Hybrids and cryogenic applications under development.
CO2 Storage Onshore and
offshore.
Saline, enhanced oil and gas recovery, and other geologies being
explored. Focusing on R&D as well as CO2 storage infrastructure
in the U.S.
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Thank you!
Questions:
Shannon Angielski
Executive Director
Carbon Utilization Research Council (CURC)
www.curc.org
21
$44,067
$5,162
2016-2025
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Tax Incentives(Millions of Dollars)
Total TaxIncentives forRenewableElectricity
Total TaxIncentives forCoal
Coal Renewable Electricity
Natural Gas Nuclear
(38% of electric
716
1,22(27% of
80(18% of electric
generation)1,724
(16% of electric
generation)
Electric Generation - 2025(in gigawatthours)
Renewable Incentives: Electricity production and investment tax credit for wind, solar and other renewable energy sources.
Coal Incentives: Expensing of exploration and development costs, excess of percentage depletion over cost depletion, capital gains treatment of coal
royalties, credit for investment in clean coal facilities, and Indian coal production credit.
Comparison of Tax Incentives for Renewable
Electricity & Coal with U.S. Electric Generation
Even a modest amount of tax incentives
will achieve the same objective of
providing significantly more low carbon
power in the future, with far greater
benefit for the federal investment.
Sources for Tax Incentives:Table 14-1, Analytical Perspectives, Budget of the United States, FY 2017 (tax expenditure estimates for renewables and coal)
JCX-142-15, Estimated Budget Effects of Division P of the FY2016 Omnibus Appropriations Bill (estimates for wind and solar extension)
JCX-143-15, Estimated Budget Effects of the Protecting Americans from Tax Hikes Act of 2015 (estimates for coal related extenders)
Source for 2025 Generation Data:
EIA Annual Energy Outlook 2015
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Coal Technology Driven by the Following
Factors:• Need to reduce capital costs to compete with gas
• Capability of responding to slow and declining load growth demand and capacity needs
• Aging fleet
• Ability of baseload power to adjust more rapidly to cycling load demands with increased renewables on the grid
• Ability to integrate with distributed power systems in the future
• Accelerated development of transformational technologies to replace aging baseload fleet and transition to fossil fuel fleet (more NGCC)
• The carbon challenge
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80
100
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85Averag
e c
ap
acit
y f
acto
r
(%
)
Unit age in years
Average capacity factor by unit age for coal operations, 1998-2014
Potential Baseload Coal GW Equivalence Needed
Reference – Ventyx Velocity Suite; - EIA AEO’13 remaining coal unit identities; AEO 2014er reference case generation; missing generation estimate 144 GW @80% average C.F. for new units to meet 2040 demand
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1,400
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BkW
h
EIA AEO’14 Generation
80%
60%
14%
144GW
1,0
07
BkW
h
109GW
56GW
31GW 79
GW
Development needed today?