10 February 2009

The Case for Coal Generation

Sandy Rae, Energy Management Director

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ScottishPower - Generation

Cruachan (440MW)

Longannet (2,304 MW)

Cockenzie (1,152 MW)

Rye House (715MW)

Brighton (400MW)

Damhead Creek (800MW)

CHPHydro

CCGT

Pumping

Coal

TOTALCAPACITY = 6,036MW

c.4000 MW in Scotland

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Whitelee wind farm (344MW)... ...largest in Europe

Committed to Environmental Improvements in Generation

Energy policy considerations

Potential for conflict between three main UK policy drivers

Preferred strategy will balance security, environment & cost issuesPreferred strategy will balance security, environment & cost issues

Focus on customer prices & affordability long termAffordable

Environment remains high on the political agenda medium / long termEnvironment

Energy security has to be a prioritySecure & Flexible

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UK Portfolio Mix

Hydro4GW

2020 GB Plant Mix

Total Generation ~100GW

Nuclear 9GWCCGT &

CHP 44GW

Other 7GW

Wind & Other Renewables

21GW Coal 18GW

Hydro4GW

2009 GB Plant Mix

Total Generation ~80GW

Nuclear 10GW

CCGT & CHP 25GW

Other 10GW

Wind & Other Renewables

6GW

Coal 28GW

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Case for Coal – Coal versus Energy Policy Drivers

Secure & Flexible

Affordable

Need coal to fill energy gap eg nuclear closures

Avoid dependency on gas imports

Provides flexibility to back up intermittent wind

Uses existing sites, workforce & connections

Abundant coal supplies & supports UK coal mining

Environment

Bridge to low carbon economy via CCS

Environmental upgrades progressing

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Environmental Upgrades

Over90%Over90%

SO2 Emissions: Flue Gas

DesulphurisationIn Progress

25% - 30%

25% - 30%

NOx Emissions:

Boosted Over Fired Air

c40%c40% Selective

Catalytic Reduction

2010 to 2015

CO2 Emissions:Up to90%Up to90% Carbon, Capture

& Storage2014 and beyond

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Securing a Future for Coal Plant – Enablers to Investment Decisions

Government support

Country’s needs considered in planning and consenting

Appropriate market design

Relevant transmission charging scheme

Early clarity on future environmental legislation

Early clarity on policy and regulation of CCS infrastructure

Early clarity on the future of the ETS and future CO2 prices

Final Commissioning

• FGD reducing SOx emissions

• Boosted Over Fired Air• Turbine upgrades

2015 onwards

• Carbon Capture & Storage

• Other developments

2009 to 2015

• Life extension - improving efficiency and NOx emissions

• Construction of 20-25MW biomass plant

Evolution Of Longannet

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Carbon Capture and Storage (CCS)

We need to understand performance at commercial scaleWe need to understand performance at commercial scale10

Consortium can deliver viable scheme & UK roadmap by 2014 Consortium can deliver viable scheme & UK roadmap by 2014

Government competition to pilot full scale CCS chain by 2014

Capture 85% of CO2 at 330MW CCS retrofitted unit at Longannet – pilot plant planned by May 2009

Transportation options include ship or utilisation of existing gas & oil infrastructure

Central North Sea storage in depleted oil and gas fields with later options to extend to saline aquifer

Project far advanced giving us confidence in meeting any Government deadlines

ScottishPower’s UK CCS competition bid

CentralNorth Sea

Over land/UnderseaPipeline

Over land/UnderseaPipeline

ShipTransportation

ShipTransportation

LongannetLongannet

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Clear case for coal generation to provide secure, affordable & flexible generation

Need certainty, policy support & level playing field to ensure coal stations still operational when CCS becomes commercially viable

Existing coal, with continuing environmental improvements, is a bridge to a lower carbon future

ScottishPower is committed to proving viability of CCS through Longannet participation in UK competition

Conclusions

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