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David Tennant, PE, PMPDavid Tennant, PE, PMP770770--846846--08280828

Biomass Power Technical SeminarBiomass Power Technical SeminarGeorgia Institute of TechnologyGeorgia Institute of Technology

Atlanta, GeorgiaAtlanta, GeorgiaMarch 11 March 11 –– 13, 201013, 2010

Agenda

• Worldwide Energy Use

• Population Growth and Energy Demand

• The Implications

• Policy Approach

• Conclusions

The Tipping Point?

Energy worldwide is going through fundamental, structural changes. Driving this are increased demand, environmental concerns, new technologies, and tax incentives for renewable energy development.

Lets Consider a Few Questions

1. What are the energy impacts of increasing world population?

2. What role should “alternative” energy play?

3. What are the short- and long-term implications for the USA?

In North America, we have had a stable and inexpensive source ofenergy for the past 50 years. This includes both petroleum andelectricity.

This has led to our high standard of living: the use of cars, freedom of movement, heating and cooling our homes, and the convenience of our electronic devices such as computers, flat screen TVs, etc.

The world population is increasing and everyone else wants our standard of living too.

What are the implications?

Energy and Our Standard of LivingEnergy and Our Standard of Living

Source: UN

The world population increased from 3 billion in 1959 to 6 billion by 1999, a doubling that occurred over 40 years.

The world population is projected to grow from 6 billion in 1999 to 9 billion by 2045, an increase of 50 percent that is expected to require 46 years.

1972 1980 1990 1999

Petroleum 46% 43% 40% 41%Natural Gas 19% 19% 23% 24% TTL Hydrocarbons 65% 62% 63% 65%

Coal 29% 29% 28% 25%Nuclear 0.70% 3% 7% 8%Hydro 0.60% 6% 2% 2%

TTL 100% 100% 100% 100%

World Energy MixSource: Simmons & Co.

Remarkable stability for 30 years

““…… ”” ––

’’

World ElectricityGeneration2006

What about costs?What about costs?

World Projected Energy Use

Interesting FactsInteresting Facts• In 2007, China was commissioning two coal-fired power plants

every week

• At current worldwide MW consumption, there is enough coal to last 150 years. The US exports approx 100-mm tons of coal/yr.

• With 5% annual growth, the coal will last 50 years

• China already uses more coal than the United States, the European Union and Japan combined. It has increased coal consumption 14 percent in each of the past two years.

The Implications

The worldwide demand for oil will grow by 30 to 50 percent over the next two decades. What if demand outstrips supply?

Wind and solar energy are not alternatives to fossil fuels; but should be considered supplements. However, biomass as a viable fuel source has a strong future.

Electric cars may be “the future” and may decrease petroleum demand. However, they will increase electric demand.

The Implications

There are not any near-term alternatives to oil, gas, and coal. These fuel sources will be around for decades into the future.

Politics can only do so much to stimulate alternative energy development. In the end, it boils down to the laws of thermodynamics and economics.

The US has invested trillions of dollars in power plants, distribution, pipelines, etc. Changing this system to an alternative-energy based scheme will require not only new investment and decades of time; but new breakthroughs in energy technology.

The Reality

• If passed, it is estimated that the “Cap & Trade” bill will increase electric rates by 20 %.

• We desire a cheap and plentiful supply of energy for our convenience, but do not want to build new nuclear or coal power plants, drill off-shore, or construct new refineries. Each of these production facilities would take about 8 to 10 years to design and construct.

• The average person has very little knowledge of what is involved with energy production and distribution; its technical limits or costs.

Can you say NIMBY?Can you say NIMBY?

The Reality- Continued -

• The OECD (Organization for Economic Cooperation and Development) consists primarily of the industrialized nations. By 2050, it is projected that 70% of CO2 emissions will be emitted by non-OECD countries, most notably China and India.

The Reality

• Solar and wind energy make up less than 3% of our energy mix. The marketplace has made this determination based on costs and availability.

• Renewables currently provide about 4 % of our electric generation.

Comparing Technology Load Factors

First, load factor is the percentage of hours that a power plant operates at maximum capacity. For example, a 1,000 MW plant that runs at 98% LF means that this plant produces 1,000 MW for 98% of the hours in a year.

Base load plants typically run higher than 90% and some as high as 98%. Hydro plants can fall into this category if they are large and the river flow is constant.

Comparing Technology Load Factors

Base-load plants are the most efficient and will generate power around the clock.

Intermediate plants are the next most efficient and include medium size coal-fired plants, say around 100 to 300 MW.

Peaking plants are the most expensive to run, but are used when the demand for power is high: during summer months and the middle of the day (8 am to 5 pm). This consists of combustion turbines and less efficient fossil-fueled plants.

Comparing Technology Load Factors and Costs

Base-load Plants L.F. (USA) Capital Cost per kWNuclear Plants (1,000 MW) Ave 92% $2,000Large Coal-fired Plants (500+ MW) Above 90% $1,500Large Hydro Plants (500 MW+) 75% $1,500Biomass (<100 MW) 70 to 85% $1,500 to $2,500Geothermal 90% $2,000 to $2,500

Intermediate Load PlantsCoal-fired plants (100 to 300 MW) 25 to 60% N/AHydro 50 to 100 44% $4,000Combined Cycle 60 to 90% $1,500

Peak Load GenerationGas Turbine A/R $900 to $1,100Wind (land-based) 30% $1,200 to $2,200Solar - Thermal 20% $3,150Solar - PV 30 to 40% $4,000

Traditional Energy Generation-Worldwide

Electric Utilities:• Coal• Nuclear• Hydro• Gas• Oil• Geothermal

Other:(paper/developers)

• Coal• Woody biomass• Gas• Geothermal• WTE

Traditional Energy Generation -Georgia

• Coal 63%• Nuclear 23%• Hydro 2%• Gas 9.3%• Oil 0.6%• Renewables 2.6%

What is a Reasonable Approach?What is a Reasonable Approach?

1. It is likely that Utilities will take the lead in alternative energy production. For example, biomass power generation and wind energy. They have the necessary financial resources.

2. Utilities can convert older, less efficient coal-fired plants to biomass much more easily, and cheaply, than others building new green field sites.

Utilities

3. Utilities maintain and sometimes operate the “grid.” Wind farms will need to tap into the grid to distribute power. Several utilities have already made significant investments in wind power. (Note FPL and Duke Energy)

Utilities

What is a Reasonable Approach?What is a Reasonable Approach?

4. Streamline the licensing process for new development and construction of nuclear power plants. Nuclear plants do not emit any GHGs.

What is a Reasonable Approach?What is a Reasonable Approach?

6. There should be continued R&D into alternative fuels for transportation (cars, trucks, and jets) and clean coal technologies.

5. The private sector will generate new technologies and innovative solutions. But only Government can provide the massive funding needed to encourage new product innovation and alternative energy implementation.

Government

7. Solar PV fields are coming down in cost. Funding for R&D can be supported by government grants and by research at DOE labs.

What is a Reasonable Approach?What is a Reasonable Approach?

8. There will not be any reduction in GHGs with unilateral reductions only by the OECD countries. India, China, and other developing nations also need to be included in any proposed reductions.

Regulatory

9. New regulations, if any, should be based on sound science. Further, regulatory agencies need to provide clear and unambiguous policy.

10. There will be opportunities to make money. Companies and the free market will determine how to produce and distribute energy in the most cost-effective manner.

Industry

11. Current equity markets are pretty dry. Funding must come from existing deep pockets (the Exxon-Mobil’s of the world) or government. This is a capital intensive industry.

What is a Reasonable Approach?What is a Reasonable Approach?

ConclusionsConclusions

1. All forms of energy production will be needed in the years to come. It is unrealistic to believe that alternative energies can displace current fossil fuels.

2. The demand for energy will require the use of all available technologies and fuels to provide a continued stable source of energy: nuclear, coal, biomass, solar, wind, hydro, etc. etc.

3. The increasing world population will drive the demand, and costs, of energy higher as the developing nations meet their energy needs.

ConclusionsConclusions

4. A partnership between industry and government will be needed to meet the nation’s energy needs.

5. The free market will determine which technologies will succeed. Biomass energy has a definite role to play in power production.

6. When comparing power-generation technologies, it is appropriate to note the load factor in comparing the economics.

7. Utilities can (and will) play an active role in generating and distributing electricity from alternative energy.

Thank You!