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PoweringtheFuture
TheNexusofWind,Solar,andFossilFuels
FloridaTurbineTechnologies-GEPower
Meggi8Vibro-Meter-OPRATurbines
Pra8&Whitney-PWPowerSystems
SiemensEnergy-SolarTurbines
StrategicPowerSystems
Alookahead:Howgovernmentpolicyandtechnologyadvances
areshapingthedemandforgasturbines
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FCGasIntelligencePhiladelphia,PAMay10,2016
09/05/2016
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• RegulaOons(emissions,ghg)andpolicy(e.g.taxcredits,subsidies)aredrivingrapidincreasesinrenewablepower
• GasturbinesareandwillremainamajorpartofUSpowergeneraOon
• IncreasingcontribuOonfromrenewablesisimpacOngnon-renewables
• GasturbineindustryisrespondingbydevelopingsoluOonstomeetthenewdemand
09/05/2016 FcGasIntelligenceConferencePhiladelphia,PA
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CleanPowerPlan(NSPSCO2RegulaOon)New,Modified,andReconstructedGasTurbines
• SetsCO2PerformanceStandardforGasTurbinesThatSupplyMoreThan1/3ofTheirPotenOalElectricOutputandMoreThan219,000MWh(25MWx8760hours)NetElectricOutputtotheGridPerYear
– CarefullystepsaroundcombinedcycleandsimplecycleoperaOondefiniOon– 1,000lb/MWhCO2turbinesoperaOngatornearbaseload.(1,030fornetoutput)– 120lb/MMBtuCO2(inputbasis)forturbinesatlessthan33%ofdesigncapacity– 120-160lb/MMBtuCO2(inputbasis)forturbinesdesignedformulO-fueloperaOon
• EmissionsStandardsareBasedona12-monthRollingAverageIncludingAllPotenOalOperaOngCondiOons
• SeparateEmissionsLevelProposalforCoalPlants
• Simplecycleturbinesarenotspecificallycalledout,butareregulatedbycapacityfactor.
– Theregulatorythresholdforsimplecyclegasturbinesis120lb-CO2/MMBtuoffuelforturbinesoperaOnglessthan33%oftheOme.
• EGU–ElectricGeneraOngUnit• GHG–GreenHouseGas• NSPS–NewSourcePerformanceStandard
NSPS:NewSourcePerformanceStandard09/05/2016 FcGasIntelligenceConference
Philadelphia,PA
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CleanPowerPlanExisOngSourceRegulaOon(ESPS)
• ESPS:ProposaltoRegulateCO2EmissionsfromExisOngPowerPlant(primarilycoalfiredthermalplantsandgasturbines)
• ProposalallowsstatestheleewayinhowtoregulateCO2emissions– TheymaylimitoutputonastatelevelintonsofCO2,– Ortheymaylimitoutputatthestatelevelintermsofthemaximumemissionrate(lb-
CO2perMWhofenergy)?• Statescanhavethefinalsayonwhichpaththeychoose.
– Theycanevenformenergyandemissiontradingareas,muchlikeNERCregions.• AnalysisofCO2emissionsinthepowerindustrysuggestedthatincreasedcombinedcycle
operaOonwouldnetasignificantreducOoninCO2emissions– CO2emissionsfromcombinedcyclesareabout1/3rdthoseofacoalplant– Butnoteverystatehasasufficientinventoryofcombinedcyclesinplace
• Currently,theruleisbeingchallengedbythemajorityofthestates• ThisporOonoftheCleanPowerPlanwasstayedbySupremeCourtDecisioninFebruary,
2016
ESPS:ExisOngSourcePerformanceStandard09/05/2016 FcGasIntelligenceConference
Philadelphia,PA
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09/05/2016 FcGasIntelligenceConferencePhiladelphia,PA
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NaturalgaslikelyovertookcoalastopU.S.powersourcein2015
LastyearlookslikeitwasanunwelcomewatershedfortheembadledU.S.coalindustry.Powercompaniesin2015forthefirstOmemayhaveburnedmorenaturalgasthancoaltogenerateelectricity,accordingtoanalystswhoadributeittothecheapestgaspricesin16yearsandarecordnumberofcoal-firedplantsreOredfromservicebecauseofthehighcostofmeeOngenvironmentalregulaOons.”-ReutersWedJan20,20163:19pmESThdp://www.reuters.com/arOcle/us-usa-natgas-coal-idUSKCN0UY2LT
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PowerGeneraOononGridswithrenewables
Lotsofnon-renewablegenera,onisopera,ng
allofthe,me
11Gigawa8s
The“DuckPond”Non-renewable
genera,on
The“Duck”renewablegenera,on
Thenon-renewablesremainmoreenvironmentallyinfluen,althantherenewablegenera,on
CAISONetLoad–2012through2020
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PowerGeneraOononGridswithoutrenewables
The“DuckPond”Non-renewable
genera,on
The“Duck”
renewable
genera,on
CAISONetLoad–2012through2020
BaseLoadDispatch
Intermediate
Peaking Simplecycle
CombinedCycle,Coal,Nuclear
BeforeRenewables ~4GW
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PowerGeneraOononGridswithrenewables
The“DuckPond”Non-renewable
genera,on
The“Duck”
renewable
genera,on
CAISONetLoad–2012through2020
BaseLoadDispatch
Intermediate
PeakingSimplecycle
EconomicsFavorsCombinedCycle
BeforeRenewables
ConstantLoad
WithRenewables
ModeratetoHighDispatchFluctuaPng
Load
~6000hrs/yr
~7GW
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Source:ofDataUSEnergyInforma4onAdministra4on;AnnualEnergyOutlook2015;TableA9“ElectricityGenera4ngCapacity”
GasTurbine:KeyPartofUSElectricalGeneraOon…andGrowing
USElectricalGeneraPonCapacity:
2013
EIA2040ProjecOon(Basecase)
coal
coal
renew
renew
GTCC
GTCC
Combturbine/diesel
Combturbine/diesel
Steam(oil/gas)
Steam(oil/gas)
Nuclear
Nuclear
GasTurbine–CombinedCycle(GTCC)is21%ofUSElectricPowerGeneraOonEIABaseCaseProjects>40%growthinUSGTCCcapacityby2040EIA:
“naturalgasturbinesarethemosteconomicalwaytomeetgrowth”“naturalgas-firedplantsaccountformorethan50%of[capacity]addiOonsinallcasesexcept‘highoilprices
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GeneraOngCapacityAddiOonsReferenceCasethrough2040
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• ReferenceCase(RC)-GDP2.4%/yfrom2012-40.Oil~$141/barrel(2012$)in2040
• LowEconomicGrowth-GDPat1.9%from2012to2040
• HighEconomicGrowth-GDPat2.8%from2012to2040
• NoSunset-RCandassumesextensionofallexisOngtaxcreditsandpolicies
• LowRenewableTechnologyCost-CAPXfornon-hydrorenewablesare20%<thanRC
• HighCoalCost(HCC)-ProducOvitygrowthrates2.3%ptslowerthanRCperyr.
• AcceleratedCoalReOrements(AC)-Beginsw/HCCcase&assumesOPXincrease3%/yr.
• HighOilandGasResource-recovery50%higher&wellspacing50%lowerthanRC
• LowOilandGasResource-ulOmaterecovery50%lowerthanRC
• NoGHGConcern-NoGHGreducOonpolicyandinvestmentdecisionsnotaltered
• GHG$10-carbonpriceat$10/metricTin2015andrisingby5%/yrthrough2040
• GHG$25-priceforcarbondioxidestarOngat$25/metricT
• GreenhouseGas$10andLowGasPrices-GHG10andHighOil&Gascases
EIACaseDescripOons
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GeneraOngCapacityAddiOonsbyFuelGHGScenarios,through2040
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GasTurbines:Cleaneruseoffossilfuel
CO2CreaPon FunFactTheamountofCO2thatwouldbe
savedannuallybya1%improvementifaverageGTfleetefficiencywouldbemorethantwicetheamountsavedbysolar
powerproducedin2014
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AdvancingUSGasTurbineTechnologyGoodfortheUS
ForeignInvestmentForeignnaOonaliniOaOvesandinvestmentsrisklossofleadposiOonforUSA
ReducedDOEInvestmentDOEfundingissmall…downbytwo-thirdscomparedtomid-nineOes
FY17PresidentbudgetproposalcutsthealreadysmallDOEfundingofgasturbinetechnologyfrom$15Mto$10M
RisktoUSLeadingPosiOonLossofleadposiOonwouldleadtolossofmanufacturingjobsandweakeningofhigh-valueexports,potenOallyaffecOngtradebalance
USJobs:Hightechjobs.2013study1esOmatedabout100,000directandanother100,000indirectjobsOedtoUSgasturbines
Cleanburning–USCO2emissionreducOons:ConversionofanaverageUScoalplant2toamoderngasturbinepowerplantburningnaturalgasreducesCO2emissionsby69%andsignificantlyreducesNox,Sox,andheavymetals
USHighTechR&D:USexperOseandtestfaciliOesatOEMs…atUniversiOes…atsmallbusinesses
Efficiency:EfficientuseofourdomesOcgassupplies.Gasturbinesincombinedcyclepowerplantscannowreach61%.DOEhassetagoalfor65%efficiency.
ProvenPlauorm:In201532%3ofUSelectricitycamefromgasturbines.TechnologyadvancementshaveaclearavenuetoapplicaOontoachieverealimpact.
EconomicalPower:EIAAnnualEnergyOutlook2015-“naturalgasturbinesarethemosteconomicalwaytomeetgrowth”
KeyTechnologyforFuturePowerPlants:EIAAnnualEnergyOutlook2015says“naturalgasfiredplantsaccountformorethan50%of[capacity]addiOonsinallcasesexcept“highoilprices”
ShortTermNeed:FY17FundDOE-FossilEnergyGasturbineresearchat$20M…minimumneededtomoveexisOngPhase1programstoPhase2
AddressLongerTerm:AuthorizaOonBillHR2961wasintroducedinthe114thCongressproposinganimportantgasturbinetechnologyprogramthatwouldaddressthisshoruall
TheAmericaCompetesReauthorizaOonActof2015,HR1806passedlastfallbytheHousealsoincludedthisprogram
Passeitherbill
1CompeOOvenessofUSGasTurbineManufacturers,ICFInternaOonal,Exhibit4-3March2920132EIAAnnualEnergyOutlook2015;Table8.2“AvgTestedheatRates”3EIAElectricPowerMonthly–Feb26,2016
Risks
Requests
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Thank You for Your Attention!