HTGR Potential Market andHTGR Potential Market and Preliminary EconomicsBriefing forN l E Ad i C ittNuclear Energy Advisory Committee

Phil Hildebrandt

gov

September 2010Phil Hildebrandt

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w.in

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Outline

• Potential market for HTGR produced energy• Evaluations of HTGRs integrated with industrial processes

P ibl b i d l f HTGR h t t i d t• Possible business model for HTGR process heat to industry• Economic analyses for industrial applications• Conclusions and uncertaintiesConclusions and uncertainties

1

Energy Production and Consumption in U.S. –gy pthe Potential Market

U.S. Primary Energy Flow by Source and Sector, 2009(Quad -- Quadrillion (1x10 15) Btu)

U.S. Primary Energy Flow by Source and Sector, 2009(Quad -- Quadrillion (1x10 15) Btu)

U.S. Primary Energy Flow by Source and Sector, 2009(Quad -- Quadrillion (1x10 15) Btu)

U.S. Greenhouse GasEmissions by Sector, 2009

(Million metric tons, CO2 equivalentAEO 2010, May 2010)

U.S. Greenhouse GasEmissions by Sector, 2009

(Million metric tons, CO2 equivalentAEO 2010, May 2010)

U.S. Greenhouse GasEmissions by Sector, 2009

(Million metric tons, CO2 equivalentAEO 2010, May 2010)

Transportation1845 Mt

Industrial

Residential1194 Mt

Commerical1034 Mt

Transportation1845 Mt

Industrial

Residential1194 Mt

Commerical1034 Mt

Transportation1845 Mt

Industrial

Residential1194 Mt

Commerical1034 Mt

Industrial1434 Mt

5507 Mt Total

Industrial1434 Mt

5507 Mt Total

Industrial1434 Mt

5507 Mt Total

1Does not include biofuels that have been blended with petroleum —biofuels are included in “Renewable Energy."2Excludes supplemental gaseous fuels.3Includes less than 0.1 quadrillion Btu of coal coke net exports.4Conventional hydroelectric power, geothermal, solar/PV, wind, an d biomass.5Includes industrial combined -heat-and-power (CHP) and industrial electricity -only plants.6Includes commercial combined -heat-and-power (CHP) and commercial electricity -only plants.7Electricity -only and combined -heat-and-power (CHP) plants whose primary business is to sell electricity , or electricity and heat, to the public.

Note: Sum of components may not equal total due to independent r ounding

1Does not include biofuels that have been blended with petroleum —biofuels are included in “Renewable Energy."2Excludes supplemental gaseous fuels.3Includes less than 0.1 quadrillion Btu of coal coke net exports.4Conventional hydroelectric power, geothermal, solar/PV, wind, an d biomass.5Includes industrial combined -heat-and-power (CHP) and industrial electricity -only plants.6Includes commercial combined -heat-and-power (CHP) and commercial electricity -only plants.7Electricity -only and combined -heat-and-power (CHP) plants whose primary business is to sell electricity , or electricity and heat, to the public.

Note: Sum of components may not equal total due to independent r ounding

1Does not include biofuels that have been blended with petroleum —biofuels are included in “Renewable Energy."2Excludes supplemental gaseous fuels.3Includes less than 0.1 quadrillion Btu of coal coke net exports.4Conventional hydroelectric power, geothermal, solar/PV, wind, an d biomass.5Includes industrial combined -heat-and-power (CHP) and industrial electricity -only plants.6Includes commercial combined -heat-and-power (CHP) and commercial electricity -only plants.7Electricity -only and combined -heat-and-power (CHP) plants whose primary business is to sell electricity , or electricity and heat, to the public.

Note: Sum of components may not equal total due to independent r ounding

2

Note: Sum of components may not equal total due to independent r ounding.Source: U.S. Energy Information Administration, Annual Energy Review 2009, Tables 1.3, 2.1b -2.1f , 10.3, and 10.4.Note: Sum of components may not equal total due to independent r ounding.Source: U.S. Energy Information Administration, Annual Energy Review 2009, Tables 1.3, 2.1b -2.1f , 10.3, and 10.4.Note: Sum of components may not equal total due to independent r ounding.Source: U.S. Energy Information Administration, Annual Energy Review 2009, Tables 1.3, 2.1b -2.1f , 10.3, and 10.4.

Vulnerabilities of fossil fuel consumption(83% of today’s energy consumption in US)

• Price volatility

• Reliance on imports

GHG i i• GHG emissions

• Use of natural resources

3

Industrial Applications – the Principal Market

The Opportunity The Opportunity —— Providing High Temperature Process Heat Providing High Temperature Process Heat d El t i it ith t B i H d b F ld El t i it ith t B i H d b F land Electricity without Burning Hydrocarbon Fuelsand Electricity without Burning Hydrocarbon Fuels

Petrochemical (170 plants in U.S. – 6.7 quads*)

Petroleum Refining (137 plant in U.S. – 3.7 quads) 

Fertilizers/Ammonia (23 plants in U.S. – 0.3 quads 

NH3 production)

Coal‐to‐Liquids (24 – 100,000 bpd new plants )Project 250 GWth HTGR application

NH3 production)

Oil Sands/Shale(43 – 600 MWt HTGR 

Hydrogen Production(60 – 600 MWt HTGR 

Modules)

4

Modules)* Quad = 1x1015 Btu (293 MM MWth) annual energy consumption

Modules)

Thermal Power Requirements for Postulated Marketq

Scoping evaluations performed for HTGR technology in industrial sector

75,000 MWth Co-Generation Supply of Process Heat to Industrial Processes

(25% of Process Heat & Power, including electricity)

36,000 MWth for Production of Hydrogen(25% of growth in the merchant market)

25 800 MWth for Oil Sands Bitumen Recovery 25,800 MWth for Oil Sands Bitumen Recovery(25% of projected growth in energy required to extract & upgrade bitumen)

249,000 MWth for Coal to Transportation Fuels(Reduces imports by 25% of 2009 imports of crude oil – 9.1 MMBPD)

110,400 MWth for Electricity Production(10% of the nuclear electrical supply increase required to achieve pending(10% of the nuclear electrical supply increase required to achieve pending Government objectives for emissions reductions by 2050)

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Postulated Deployment of HTGR Results in Stable Energy Prices, Secure Source and Reduced Emissions 

calculated fit: 2%8.00

10.00

12.00

rice

($/M

M B

tu)

DOE EIA Energy Outlook 2008

2008 $senergy HHV

DOE EIA Annual Energy Outlook 2009

AUG09 futures

Natural Gas and Crude Oil Prices exhibit high volatility

HTGR Energy Prices affected only by normalcalculated fit: 2%

2.00

4.00

6.00

ty U

ser N

atur

al G

as P

DOE EIA Energy Outlook 2004

DOE EIA Energy Outlook 2002

DOE EIA EnergyOutlook 2007

HTGR Energy Prices affected only by normal inflationary factors, (e.g., wages, material)

0.001970 1980 1990 2000 2010 2020 2030 2040

Year

Util

it

6

Emissions Reductions

CO2 emissions are reduced by ~400 million

Co-Generation & Process

Heat, 110 MtElectricity

Generation, 146 Mt

metric tons by 2050; ~7% of pending Government objectiveHydrogen

Production, 16 Mt

Oil Sands, 37 MtCoal/Biomass

to Fuel & Feedstock,

80 Mt

Natural Gas Conservation

Co-Generation & Process

Heat, 2.1 Tscf

Natural gas combustion is reduced by ~7 trillion

Natural Gas Conservation

Reduce Oil Imports by Heat, 2.1 Tscf

Hydrogen

Oil Sands, 0.7 Tscf

Electricity Generation,

3.6 Tscf

is reduced by 7 trillion scf by 2050; ~30% of U.S. consumption in 2009

Reduce Oil Imports by 25% of 2009 Rate

Reduces the need to import oil by ~2.5 million Production,

0.4 Tscf

p ybarrels per day (on an energy equivalent basis). Outflow of US dollars reduced by $150 million per day (based on an average $60/BBL price)

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Evaluations of HTGR Integration with Industrial Processes

• Co-Generation Supply of Steam, Electricity and High pp y , y g

Temperature Gas

• Ammonia and Ammonia Derivatives ProductionAmmonia and Ammonia Derivatives Production

• Hydrogen Production

• Conversion of Coal and Natural Gas to Transportation Fuels

• Oil Recovery from Oil Sands and Oil Shale

• Electricity Production

8

Possible Business ModelPossible Business Model

9

Electricity and Steam ProductionElectricity and Steam Production

Electricity  Production Price VersusPrice of Natural Gas, $/Mwhe, and Carbon Credits, $/metric ton CO2eq

Comparisonof Production Pricing for HTGR and CCGT Plants 35

Comparing Price of Steam Generated by an HTGR and a CCGT versusPrice of Natural Gas and Cost of GHG Emissions

120

140

160

e, $/M

Whe

Comparison of Production Pricing for HTGR and CCGT Plants

$50/MTCO2 CostCCGT

25

30

35

1000

lbs

CCGT,  $50/MT CO2 Emissions Cost

80

100

Electricity Prod

uction

 Price

HTGR

CCGTNo CO2 Cost

~$4/MMBtu

~$8.5/MMBtu

10

15

20

Price of Steam

, $/1

HTGR

CCGT, No CO2

i i

~$4/MMBtu

~$7/MMBtu

40

60

0 2 4 6 8 10 12 14 16 18

E

Natural Gas Price, $/MMBtu

0

5

0 2 4 6 8 10 12 14 16

Price of Natural Gas, $/MMBtu

Emissions Cost

Economic FactorsEconomic Factors

HTGR Plant Capital Cost $1,700/KWtCCGT Capital Cost $625/KWtDebt 80%Internal Rate of Return 15%Financing Interest 8%

10

Financing Interest 8%Financing Term 20 yearsTax Rate 38.9%

Conversion of Coal to Gasoline (MTG Process)( )

5

Gasoline Production Price versus Crude Oil PriceConventional Crude Oil Refining  versus

Coal to MTG using Conventional and HTGR Integrated Processes 6.00

Comparison of Gasoline Pricing for Conventional versus HTGR Integrated Coal to Gasoline Conversion

3

3.5

4

4.5

Conventional MTG Process$50/MT CO2 C ost

HTGR Integrated MTG Process

~$110/BBL

~$125/BBL

ction Price, $/gal

3.00

4.00

5.00

Peak Gasoline Price June 2008

HTGR Price, $/gal

0.5

1

1.5

2

2.5$50/MT CO2 C ost

Conventional  MTG ProcessNo CO2 Cost~$80/BBL

$110/BBL

Gasoline Prod

u

1.00

2.00

3.00

Lowest Gasoline Price December  2008

~$70/ton

Gasoline Economic Factors

0

0.5

0 20 40 60 80 100 120 140 160 180

Crude Oil Price, $/Barrel

0.00

0 50 100 150 200 250

Cost of Carbon, $/ton

co o ic acto s

HTGR Plant Capital Cost $1,700/KWtCCGT Capital Cost $625/KWtDebt 80%Internal Rate of Return 15%Financing Interest 8%

11

Financing Term 20 yearsTax Rate 38.9%

Ammonia Production

800

Comparison of Ammonia Pricing for Conventional and HTGR Integrated Processes

~$160/ton

600

700

nia, $/ton

HTGR Hydrogen Plant$160/ton

400

500

Price of Ammon

~$50/ton

200

300

0 50 100 150 200 250

Economic Factors

HTGR Plant Capital Cost $1,700/KWtCCGT Capital Cost $625/KWt

Cost of carbon, $/metric ton CO2

12

Debt 80%Internal Rate of Return 15%Financing Interest 8%Financing Term 20 yearsTax Rate 38.9%

C l iConclusions

• A large and viable potential market has been identified• The economics of each application have been scoped• The economic viability of applications is mixed & dependent on

assumptions, (e.g., policy for CO2 emissions)• There is large uncertainty in the results of the economic

evaluations:– Capital costs

O ti t– Operating costs– Financing

• Design work is needed to improve cost estimates• Market evaluations to date were to establish end-user technical

requirements – detailed market study is required

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