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Steven WinbergProgram ManagerBattelle :: Infrastructure & EnvironmentPittsburgh, PA
The Future of Coal33rd USAEE/IAEE North American Conference October 25-28, 2015Pittsburgh, PA.
The Future of Coal
2
Our Founding Mission
• Established by steel industrialist, Gordon Battelle
• Nonprofit, charitable trust formed in 1925 in Columbus, Ohio
• Profits reinvested in science & technology, and in charitable causes
“Bring business and scientific interests together as forces for positive change”
Gordon Battelle’s last will and testament
3
• Consumer & Industrial
• Energy & Environment
• Health & Analytics
• Laboratory Management
• National Security
• Pharmaceutical & Medical Devices
• STEM Education
Serving a Broad Range of Clients
US Coal Production Through 2014
4
2015 estimate Production down 9% from 2014 Production down 22% from 2008 peak Exports down 17% from 2014 Exports down 36% from 2012 peak
US Coal Production Through 2014
5
Coal Use 93% Electricity Generation 5% Industrial (excluding coke ovens) 2% Coke Ovens – Metallurgical coal
My FocusCoal’s Future for Power Generation
You can’t talk about the future of coal without talking about natural gas
Paradigm Shift The majority of natural gas E&P was in the Gulf
deep water until the 2007 shale boom. Shale shifted the paradigm
• 3-5 years to build a deepwater well
• vs. 6-9 months for a shale well
• Lower amplitude on price variability
• Shorter time between boom and bust cycles
U.S. Natural Gas Wellhead Price
9
Summer 1987$1/Mcf – Ohio
Snow & Cold
Hurricane Katrina
High Energy Prices
Paradigm Shift The majority of E&P was in the Gulf deepwater until the 2007 shale boom. Shale shifted the paradigm
• 3-5 years to build a deepwater well
• 6-9 months for a shale well
• Lower amplitude on price variability
• Shorter time between boom and bust cycles
2014 Winter was the 1st time the spot price of natural gas did not climb when the thermometer dropped in the Northeast
2014-2015 negative basis between Henry Hub and Pennsylvania production Henry Hub = $2.66 Western PA production into pipeline = $1.05
Maybe this current bust cycle is the new norm??
You can’t talk about the future of coal without talking about the Clean Power Plan
Electricity Generation CO2 Emissions
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
500
1000
1500
2000
2500
3000Total Fuel Oil
Natural Gas
Coal
Mill
ion
Tonn
es
Year
CPP 2030 Goal – 32% below 2005 baseline1643 Million Tonnes CO2
32%
Coal-Fueled Electricity Generation under CPP
CPP 2030 CO2 Emissions1,643,000 M Tonnes
2030 Coal if lost gen. is from zero-emitting sources 634,000 M Tons
2030 Coal if lost gen if from natural gas 527,000 M Tons (17% additional loss)
Year
M Tons of coal
M Tonnesof CO2
You can’t talk about the future of coal without talking about the aging coal fleet
FirstEnergy's Lake Shore power plant, built in 1911, is closing.
EIA Coal Retirement Forecast
Does not consider the impacts of the Clean Power Plan
2014 Coal Consumption & Capacity Factor
> 50 40-50 30-40 20-30 10-20 <100
50
100
150
200
250
300
350
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
43%
29%
78%
86%84%
71%
GW
Million Tons Coal
Capacity Factor
Age of Coal Fleet(years)
12%
28%
41%
10%7%
2%
GW
/MM
Tons
of
Coa
l
% Capacity Factor
You can’t talk about the future of coal without talking about what replaces the aging coal fleet.
17
So What Gets Built?
Wind, of course, but there are limits
Solar, of course, but even more limited than wind
Biomass, maybe but also limited
Nuclear, unlikely
Fossil Energy - Natural Gas Generation wins over coal Lower capital cost
Shorter construction times
Less potential for cost overrun
Less environmental regulatory uncertainty
Less public opposition
Coal Generation - Unlikely, in the next 10 years
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
Current Grid Price
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250 LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
Current Grid Price
New Generation Cost
Conve
ntion
al Coa
l
Advan
ced
Coal
Advan
ced
Coal w
/CCS
NGCC
Advan
ced
NGCC
Advan
ced
NGCC w
/CCS CT
Advan
ced
CT
Advan
ced
Nuclea
r
Geo
rther
mal
Biomas
sW
ind
Wind
- O
ffsho
re
Solar P
V
Solar T
herm
al
Hydro
elcec
tric
0
50
100
150
200
250
LCOE (2013$/MWh)
LCOE ($/MWh)
Current Grid Price
What are these Next Gen Coal Technologies?
Chemical Looping
Advanced SupercriticalOxyfuel Combustion
Pressurized Fluid
Bed Comb.
Supercritical CO2 Brayton Cycle
So What’s the Future For Coal?
One Future Slow decline of coal to 500 million tons (50% reduction) in
next 15 years… perhaps quicker & greater decline
More mines shuttered With this shuttering comes lost reserves
More bankruptcies
Fewer coal companies competing for a decreasing market.
OR
A Better Future
Coal has to take ownership of the next generation of coal technologies- Coal can no longer rely on utilities/IPPs to advance coal technology
They have other, less expensive options
They have higher priority uses of their capital
Many have mandates to reduce coal consumption
- Coal must partner with technology providers
- Coal must build the pilot plants on mining property
Coal must build, own and operate the equipment that uses its product!
albeit a challenging future…
800.201.2011 | solutions@battelle.org | www.battelle.org
The best way to predict the future is to create it.
Peter Drucker
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