Clean Power:Now and in the Future

Defining Clean Power§ Only zero-emissions resources?§ Can fossil fuels be considered

clean?§ Can a resource be defined as

clean if it requires mining?§ Is clean used only in reference

to CO2?§ Can an all-of-the-above energy

strategy also be a clean energy strategy?

Defining the Future

§Tomorrow?§Next year?§20 years?

U.S. Electricity Generation in 2015

Source: Energy Information Administration

Coal (33%)Natural gas (33%)Nuclear (20%)Hydropower (6%)Wind (4.7%)Solar (0.6%)Other (2.7%)

Observations§ More than 2/3 of U.S.

electricity currently comes from fossil fuels

§ Nuclear is by far our largest non-carbon resource

§ Wind and solar produce less than 6 percent of our energy

Source: Energy Information Administration

Fossil FuelsNuclear Hydropower WindSolarOther

§ Electricity is the only product in the world that is made, delivered and consumed in the same moment in time

§ Mass battery storage currently infeasible

§ Limited access to other storage options

§ Constant balance of supply and demand

Let’s Start With the Basics

Society Wants Our Product To Be Better§Electricity should be…◦ Reliable 100% of the time◦ Affordable for 100% of the

population◦ 100% “clean” power

§Need to find the best balance of the 3

Other Considerations From a Utility’s Perspective§ What about physics?◦ Grid operations

§ What about National Security?◦ Fuel supply/disruptions◦ Component materials◦ 90% of rare earth metals for new

tech produced in other countries

Types of Generation§ Baseload power is available

for 24-7 demand§ Intermediate power plants

cycle with demand§ Peaking power is available

when demand is highest§ Intermittent power is

available when supply allows

What Influences Generation Choices?§ Capital costs

§ Operations, maintenance costs

§ Environmental compliance and permitting

§ Regulatory requirements

§ How quickly it can be built

§ Capacity factors

§ Load shape

§ Existing generation mix

§ Consumer wants/options

§ Advantages◦ Abundant fuel source◦ Relatively inexpensive fuel source◦ Reliable – can operate 24-7◦ Mostly solved non-CO2 emissions

§ Disadvantages◦ New federal CO2 regulations cause

uncertainty◦ Environmentalist opposition◦ Potentially difficult to finance

Coal

Future of Coal – Regulation§Clean Power Plan◦ First-ever federal limits on

CO2◦ Impacts states with

significant coal resources◦ 32% reduction in U.S. CO2

emissions by 2030◦ If overturned, new

regulation will take its place

Future of Coal – Technology§ Need to view CO2 as a

product with value, not just a waste product

§ Allam Cycle◦ CO2 runs the turbine

§ CO2 for enhanced oil recovery

§ Product development◦ Ethanol, biofuel, concrete

additive, plastics, chemicals, etc.

§Advantages◦ Moderate capital costs◦ Less emissions than coal◦ Reliable, flexible operation◦ Currently, natural gas is low-priced

Natural Gas

§Disadvantages◦ Costs have been historically volatile◦ Currently at about $2.84 per MBtu◦ Abundance of natural gas tied to fracking◦ High methane emissions – greenhouse

gas

Future of Natural Gas§ Most utilities consider natural gas

their top choice for future generation§ Beneficiary of current regulations§ Clean Power Plan forcing many

utilities to switch from coal to natural gas

§ Future fracking or methane regulations could impact supply and current low prices

§ Need improvements to nation’s pipeline infrastructure

Nuclear§Advantages◦ No CO2 emissions◦ Relatively low-cost fuel◦ Reliable operation – 24/7

§Disadvantages◦ Very high capital cost◦ Radioactive waste – societal opposition ◦ Extremely difficult permitting and licensing

process◦ First new U.S. nuclear reactor in two

decades began operating in 2016 (Watts Bar in Tennessee)

Future of Nuclear§Needs society’s support§Needs federal backstop§Technology needs time§Private sector pushing

small reactors (under 300 MW)

*Source:EnergyInformationAdministration,FY2013

§Advantages◦ No fuel cost◦ Low-cost energy to consumer◦ No air emissions◦ Reliable operation

§Disadvantages◦ Affects fish and wildlife habitat◦ Alters the natural flow of rivers◦ Virtually no resources left to develop

(some dams being removed)

Hydro

§Advantages◦ Renewable◦ No air emissions◦ Becoming cost-competitive

§Disadvantages◦ Has intermittent production

◦ 40-50% capacity factor◦ Need a lot of space for

development◦ Landowner opposition◦ Migratory bird issues◦ Requires backup generation

Wind

Solar§Advantages◦ Renewable◦ No air emissions

§Disadvantages◦ Still cost-prohibitive w/o

subsidy◦ Panels take a lot of space

relative to energy produced◦ Intermittent production

(needs backup)◦ Capacity factor: 15-18%

in MN

One week of production in Roseau, MN

What Would You Do as a CEO?§ No comprehensive national energy

policy§ Regulatory uncertainty§ Each generation source has

advantages and disadvantages§ Large investment decisions in short

time frames§ Generation sources expected to last

decades

Remember Society’s Expectations§Electricity should be…◦ Reliable 100% of the time◦ Affordable for 100% of the

population◦ 100% “clean” power

§Need to find the best balance of the 3

Other Technologies on the Horizon§Fuel cells§Electric vehicles§Batteries§Hydrogen options§Challenges – size,

scope, scale

Before we can have a Clean Power Future…

We should have a real dialogue to define“Clean Power” and “Future”

CleanCoal

Nuclear

Future is Now!

Wind

Natural Gas

Solar

20-YearPlanHydroTech

We Need an All-of-the-Above Energy Strategy§ All-of-the-above energy strategy is only way to meet

society’s expectations◦ Intermittent resources alone cannot meet our 24-7

needs§ Technology will drive the future of clean power◦ Fossil fuel plants will become even cleaner◦ Intermittency issues are being addressed

§ Let’s keep all our options on the table

Thank you