David Mohler

Deputy Assistant Secretary

Office of Clean Coal and Carbon Management

Clean Power Plan Policy Workshop

November 10-11, 2015

2

Coal plays a significant role in many states

IL52 M

tons/yr

WY388 M

tons/yr

PA54 M tons/yr

KY80 M tons/yr

WV

113 M tons/yr

Other key coal states: Alabama, Colorado, Montana, New Mexico, North Dakota, Ohio, Texas, Virginia

3

Coal’s role is shrinking

Coal’s Share of Total US Energy Production

High Oil and Gas Resource Case

• Falls from 26% in 2013 to 15% in 2040

Reference Case

• Remains slightly above 20% through 2040

Low Oil Price Case

• Remains essentially flat at 23% through 2040

Annual Energy Outlook 2015

4

Concern in states about coal’s diminishing role

“As we develop our future energy policies, we must also focus on the livelihood of hard-working miners and families who are responsible for keeping America’s lights on.”Senator Manchin (D-WV)

“EPA’s final rule for existing power plants…is totally unworkable as written for North Dakota’s utilities and regulators without causing severe reliability issues and massive rate increases.” Senator Heitkamp (R-ND)

“I have been very pro-employment to southern Illinois. With this rule applied, I don't think we can keep a lot of people in Illinois happily employed.” Senator Kirk (R-IL)

5

Total Emissions from Coal-Fired GenerationDramatic Reduction Despite Increase in Usage

-100%

-50%

0%

50%

100%

150%

200%

1970 1975 1980 1985 1990 1995 2000 2005 2010 2014

Ch

an

ges f

rom

1970

CoalkWh

SOx

tons

NOx

tons

PM10tons

+125%

-64%-82%-84%

6

Clean Power Plan (under Section 111 of the Clean Air Act)

• The Clean Power Plan addresses carbon pollution from new and existing power plants, including plant modifications

• 111b: new, modified, and reconstructed sources– Coal: 1,400 lbs CO2/MWh emission standard– Natural gas: 1,000 lbs CO2/MWh emission standard

• 111d: existing sources– Partnership between EPA, states, tribes, and US territories– EPA sets a goal and states/tribes/territories choose how they will meet it, initial state

plans are due by June 30, 2016 or states can file for an extension– Best System of Emissions Reduction (BSER) includes plant heat rate improvements, fuel

switching (to natural gas), and adding renewables

7

States with Financial Incentives for CCS

Source : C2ES http://www.c2es.org/us-states-regions

8

President’s FE portfolio and FY 16 budget

• Loan Program Office: $8B in clean fossil authorities

• ARRA projects: >$4.5B commitment

• Tax credit proposal: comparable to renewable ITC’s + PTC’s

• $2B ITC credits: 30% capital investment (incl. infrastructure)

• Uncapped (!) STC’s (sequestration tax credits) – scored at $3B

• New authorities, not extensions/modifications of existing

• FE RD&D: $564M for FY16; $400M for clean coal and CCUS

More than just FE RD&D budget

9

FE Clean Coal Program HighlightsCarbon Capture

Post-combustion Pre-combustionOxy-combustion

SolventsSorbents

Membranes

Advanced Energy SystemsGasification/Combined Cycle

Advanced CombustionCoal and Coal-Biomass to Liquids

Solid Oxide Fuel CellsAdvanced Turbines

Carbon Storage

Regional PartnershipsMonitoring, Verification, and AccountingCarbon Storage AtlasRisk AssessmentCO2 Utilization

Crosscutting Research

Sensors and ControlsHigh-Performance MaterialsWater Management R&DModeling and Simulation

10

TRL 2 Successes from FWP,

SBIR/STTR, ARPA-E

Transfer to Office of Major Demonstrations

Scope of Capture Program

“Valley of Death” for Technologies

Pathway for Technology Commercialization

Small- and Large-scale Pilot Projects: Reducing the risk for demonstration

25 MW Solvent Heat Integration MHI KS1 Solvent

1 MW Solid Sorbent Pilot

(ADA-ES)

1 MW Solvent Pilot(Linde)

1 MW Solvent System

(Univ. of KY)

1 MW Solvent Pilot

(Neumann)

1 MW Membrane

System (MTR)

11

NCCC: 0.5 MW PSTU, Ion Engineering, GE

TCM 13MWe Solvent Unit

Green Field Plant10+MWe

1:100

10-25 Mwe Greenfield Capture Facility

1:10

Large-ScaleDemonstrations

12

Carbon Capture Program Highlights

• National Carbon Capture Center

– Test technologies under realistic conditions to reduce the cost of advanced coal-fueled power plants with CO2 capture

– Over 20 technologies tested from laboratory to small pilot-scale

• 1 MW-scale pilot projects− Linde/BASF − GE Global Research− Membrane Technology and Research Inc. (MTR)− Gas Technology Institute (GTI)− SRI International

13

BIG SKY

WESTCARB

SWP

PCOR

MGSC

SECARB

MRCSP

Regional Carbon Sequestration PartnershipsDeveloping the Infrastructure for Wide Scale Deployment

Seven Regional Partnerships400+ distinct organizations, 43 states, 4 Canadian Provinces

• Engage regional, state, and local governments

• Determine regional sequestration benefits

• Baseline region for sources and sinks

• Establish monitoring and verification protocols

• Address regulatory, environmental, and outreach issues

• Validate sequestration technology and infrastructure

Development Phase (2008-2018+)

8 large scale injections (over 1 million tons each)

Commercial scale understanding

Regulatory, liability, ownership issues

Validation Phase (2005-2011)

20 injection tests in saline formations, depleted oil, unmineable coal seams, and basalt

Characterization Phase (2003-2005)

Search of potential storage locations and CO2 sources

Found potential for 100’s of years of storage

14

Best Practices ManualVersion 1(Phase II)

Version 2(Phase III)

Final Version

(Post-Injection)

Monitoring, Verification and Accounting

2009/2012 2016 2020

Public Outreach and Education 2009 2016 2020

Site Characterization 2010 2016 2020

Geologic Storage Formation Classification

2010 2016 2020

**Simulation and Risk Assessment 2010 2016 2020

**Carbon Storage Systems and Well Management Activities

2011 2016 2020

Terrestrial 2010 2016 – Post MVA Phase III

**Regulatory Issues will be addressed within various BPMs

Critical Requirement For Significant Wide Scale Deployment -Capturing Lessons Learned

Carbon Storage Best Practice Manuals

15

Port Arthur, TX: : 1.1 M tons/yr CO2Air Products, 2013

VSA VesselsVSA Vessels

Co-Gen Unit

Blowers

CO2 Compressor & TEG Unit CO2 Surge

Tanks

Existing SMR

Operational - 2.5 million metric tons stored so far

16

W.A. Parrish, TXNRG/PetraNova project

New Business Model

Kemper County Energy Facility CCPI DemonstrationSouthern Company Kemper IGCC

Kemper Site Visit May 12, 2015

Current Project Status

•Plant ~98% complete

•First Lignite feed and clean syngas production from first gasifier: Oct 2015

•Operation: early 2016

Project Background• Kemper County, MS

• 582 MW (net) poly generation plant

• >67% CO2 capture; ~ 3,000,000 Tonnes CO2/year for EOR

• DOE cost share $270 million CCPI-2

18

Boundary Dam, : 1.1M tons/y CO2Saskpower, Saskatchewan

Operational Oct. 1st

19

Large Scale Integrated Projects World Wide

0

20

40

60

80

100

120

140

0

10

20

30

40

50

60

19

72

19

82

19

86

19

96

20

00

20

04

20

08

20

10

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

22

Operate Execute Define Evaluate Cum. Volume

Nu

mb

er o

f P

roje

cts

Vo

lum

e CO

2(m

tpa)

Data from Global CCS Institute

20

International Collaboration

• Conduct joint R&D and large scale demonstration projects– Quest, White Rose

• Exchange information and best practices– Technologies, regulations, policy, financing

• Build capacity for new technologies and applications– CO2 utilization, capture technologies

• Promote U.S. exports– Technology deployment

• Seek foreign direct investment in domestic demonstrations– TCEP, PetraNova

International Partnerships

Ongoing Collaboration– Canada

– China

– India

– Japan

– Norway

– Saudi Arabia

– UAE

– UK

21

Future Collaboration– Algeria

– Colombia

– Czech Republic

– Egypt

– Morocco

– Netherlands

– Poland

– Qatar

– Romania

– Serbia

– Others???

Expanding Collaboration– Brazil

– Indonesia

– Italy

– Mexico

– South Africa

– South Korea

– European Commission

22

6th CSLF Ministerial

• Secretary Moniz announced new CO2 Storage Network– Global Large-Scale Saline Storage Project Network

• Will share best practices, operational experience, and key lessons

• Romania and Serbia joined the CSLF

• Recognized 5 additional CCS projects, making a total of 49 active and completed CSLF-recognized projects

• Advocated the need for CCS to compete on a comparable basis with other clean energy options

November 1-5, 2015Riyadh, Saudi Arabia

23

New Policy Can Prompt Innovation

• CCS is an option for achieving reductions under 111b and 111d

• Need to continue to advocate for low carbon policy parity

• Must continue information sharing, international partnerships, and spurring innovation

24

Reference Slides

25

Low Carbon Policy Parity

http://hub.globalccsinstitute.com/sites/default/files/publications/195008/costs-ccs-other-low-carbon-technologies-united-states-2015-update.pdf

26

U.S. Annual Energy Outlook, 2015Business as usual without Clean Power Plan

27

Annual Electricity Generation in the US2008-2013

United States Annual Electricity Generation (MWh) 2008 - 2013 Total Capacity (MW)

Source 2008 2013 Change % Change 2013

Coal 1,985,801 1,584,194 -401,607 -20.2% 312,293

Natural Gas 882,981 1,125,691 242,710 27.5% 455,214

Nuclear 806,208 789,016 -17,192 -2.1% 104,182

Hydroelectric 254,831 268,548 13,717 5.4% 78,215

Solar 864 9,022 8,158 944.2% 3,053

Wind 55,363 167,992 112,629 203.4% 59,082

Geothermal 14,840 15,775 935 6.3% 2,782

Biomass 55,034 61,885 6,851 12.4% 4,885

Other 63,466 48,904 -14,562 -22.9% 84,753

Total 4,119,388 4,071,027 -48,361 -1.2% 1,104,459