presented by the coal rush revisited: r. w. beck, inc. iped coal power conference january 18-19,...
TRANSCRIPT
presented by
The Coal Rush Revisited:The Coal Rush Revisited:
R. W. Beck, Inc.
IPED COAL POWER CONFERENCE
January 18-19, 2007 St. Petersburg, FL
Nicholas P. Guarriello
An Economic Overview of the
Continued Interest in the Power
Industry’s ‘Old Stand-By’’
An Economic Overview of the
Continued Interest in the Power
Industry’s ‘Old Stand-By’’
Coal TodayCoal Today
Total 2005 Generating Capacity 988,000 MW
32% Coal*
10% Nuclear
41% Gas
13% Renewables
4% Oil
Total 2005 Generating Capacity 988,000 MW
32% Coal*
10% Nuclear
41% Gas
13% Renewables
4% Oil* More than 50% of electricity consumed
Coal (32%)Coal (32%)
Natural Gas(41%)Natural Gas(41%)
Renewables(13%)Renewables(13%)
Nuclear(10%)Nuclear(10%)Oil
(4%)Oil(4%)
Source: Energy Information Administration
The Aging Coal FleetThe Aging Coal Fleet
0%0%
25%25%
50%50%
75%75%
100%100%
>50 Years Old
>50 Years Old
>40 Years Old
>40 Years Old
>30 Years Old
>30 Years Old
>20 YearsOld
>20 YearsOld
>10 Years Old
>10 Years Old
Source: Energy Information Administration
98%98%
88%88%
71%71%
52%52%
29%29%
Coal’s FutureCoal’s Future
Generating Capacity Additions 2005-2025 Total: 246,000 MW
42% Coal (102,000 MW)
47% Natural Gas
9% Renewables
2% Nuclear
Generating Capacity Additions 2005-2025 Total: 246,000 MW
42% Coal (102,000 MW)
47% Natural Gas
9% Renewables
2% Nuclear
Coal (42%)Coal (42%)
Natural Gas(47%)Natural Gas(47%)
Renewables(9%)Renewables(9%)
Nuclear(2%)Nuclear(2%)
Source: Energy Information Administration
Energy NeedsEnergy Needs
Retail Electricity Sales by Sector1970 – 2025 (billion kilowatt hours)
History Projections
Source: Energy Information Administration
Average Annual Percent Growth Rate 2004-2025:
Commercial 2.2
Residential 1.6
Industrial 1.0
Total 1.6
00
500500
1,0001,000
1,5001,500
2,0002,000
2,5002,500
19701970 20052005 20252025
Ele
ctri
c Sale
s (T
Wh)
Ele
ctri
c Sale
s (T
Wh) CommercialCommercial
ResidentialResidential
IndustrialIndustrial
Coal’s DriversCoal’s Drivers
High Natural Gas Costs
Security
Abundant
“Made in the USA”
2005 EPACT
High Natural Gas Costs
Security
Abundant
“Made in the USA”
2005 EPACT
Conclusion: Coal will remain 50% of the energy mixConclusion: Coal will remain 50% of the energy mix
Low Cost Electricity From CoalOver 50% of the Electricity Comes from CoalLow Cost Electricity From CoalOver 50% of the Electricity Comes from Coal
Source: Energy Information Administration
NH 12.53¢ 22%RI 11.97¢ 0%CT 12.06¢ 14%NJ 10.89¢ 16%MA 12.18¢ 23% VT 10.95¢ 0%DE 7.76¢ 54%MD 8.13¢ 56%
¢ = average retail price per kilowatt hour for 2005
% = percent of total generation from coal for 2000
5.01-6.13
6.30-6.72
6.85-7.54
7.64-10.89
10.95-18.33
8.76¢ 31%
6.72¢ 64%
5.92¢94%
5.87¢10%
5.87¢69%
5.16¢96%
7.64¢
78%
6.34¢9%
6.55¢75%
7.51¢88%
9.02¢51%
11.63¢1%
5.92¢94%
6.60¢44%
9.14¢39%
6.69¢85%
6.61¢65%
6.85¢61%
6.13¢85%
6.95¢47%
7.79¢42%
7.48¢70%
6.30¢50%
8.03¢ 26%
7.23¢61%
5.88¢94%
7.08¢92%
10.57¢3%
13.95¢17%
7.54¢44%
6.46¢56%
7.43¢63%
6.72¢ 40%
5.01¢ 92%
6.64¢50%
8.27¢56%
5.15¢98%
7.19¢58%
6.31¢ 60%
5.12¢0%
11.72¢8%
18.33¢15%
Fuel Prices to Electricity GeneratorsFuel Prices to Electricity Generators
Source: Energy Information Administration
* Includes average cost of transportation
11
22
33
44
55
66
77
88
99
19951995 20002000 20042004 20102010 20152015 20202020 20252025
Natural GasNatural Gas
CoalCoal
NuclearNuclear
ProjectionActual
20
04 $
/MM
Btu
*20
04 $
/MM
Btu
*
10.0010.00
20.0020.00
30.0030.00
40.0040.00
50.0050.00
60.0060.00
70.0070.00
CoalCoal CCCC IGCCIGCC
20
05
$/M
Wh
20
05
$/M
Wh
20.4920.49
30.2530.25
42.7642.76
13.0113.01
17.0317.03
39.3639.36
Fixed CostFixed Cost Variable CostVariable Cost
Levelized Cost for New Power Plants in 2012Levelized Cost for New Power Plants in 2012
Based on projected capital costs reported by EIA increased by 20% and fuel prices and O&M costs reported by EIA
55.7855.78
50.7550.75
56.3956.39
Source: R. W. Beck, Inc.
10.0010.00
20.0020.00
30.0030.00
40.0040.00
50.0050.00
60.0060.00
70.0070.00
CoalCoal CCCC IGCCIGCC
20
05
$/M
Wh
20
05
$/M
Wh
20.4920.49
30.2530.25
42.7642.76
13.0113.01
17.0317.03
39.3639.36
Fixed CostFixed Cost Variable CostVariable Cost
59.2259.2257.1457.14
62.1062.10
Potential CO2 CostsPotential CO2 Costs
6.406.40
5.715.713.443.44
Based on projected capital costs reported by EIA increased by 20% and fuel prices and O&M costs reported by EIA * Cost of CO2 emissions at $7 per ton in 2010 – Source: National Commission on Energy Policy
Levelized Cost for New Power Plants in 2012
Including the Cost of CO2 Emissions*
Levelized Cost for New Power Plants in 2012
Including the Cost of CO2 Emissions*
Source: R. W. Beck, Inc.
Risk ProfileReflects Fuel Price VolatilityRisk ProfileReflects Fuel Price Volatility
2020
4040
6060
8080
100100
120120
140140
160160
20122012 20132013 20142014 20152015 20162016 20172017 20182018 20192019 20202020 20212021 20222022 20232023 20242024 20252025
Coal Unit RangeCoal Unit Range
Combined Cycle RangeCombined Cycle Range
Tota
l Pow
er
Cost
s ($
/MW
h)
Tota
l Pow
er
Cost
s ($
/MW
h)
Combined Cycle MeanCombined Cycle Mean
Coal Unit MeanCoal Unit Mean49.4149.41
60.4160.41
70.2270.22
106.50106.50
Source: R. W. Beck, Inc.
Risk ProfileReflects Fuel Price and Emissions VolatilityRisk ProfileReflects Fuel Price and Emissions Volatility
2020
4040
6060
8080
100100
120120
140140
160160
20122012 20132013 20142014 20152015 20162016 20172017 20182018 20192019 20202020 20212021 20222022 20232023 20242024 20252025
Tota
l Pow
er
Cost
s ($
/MW
h)
Tota
l Pow
er
Cost
s ($
/MW
h)
Combined Cycle MeanCombined Cycle Mean
Coal Unit MeanCoal Unit Mean 49.4149.41
60.3660.36
86.3486.34
115.19115.19Coal Unit RangeCoal Unit Range
Combined Cycle RangeCombined Cycle Range
Source: R. W. Beck, Inc.
U.S. Production vs. ConsumptionU.S. Production vs. Consumption
Source: Energy Information AdministrationNote: Natural gas statistics excludes natural gas plant liquids.
25%25%
50%50%
75%75%
100%100%
125%125%
19501950 19551955 19601960 19651965 19701970 19751975 19801980 19851985 19901990 19951995 20002000 20042004
Pro
d.
Btu
(%
of
Cons.
Btu
)Pro
d.
Btu
(%
of
Cons.
Btu
)
CoalCoal
PetroleumPetroleum
Natural GasNatural Gas
Total U.S. Coal Consumption for Power and U.S. Criteria Emissions, 1970-2001Total U.S. Coal Consumption for Power and U.S. Criteria Emissions, 1970-2001
100100
19701970
5050
150150
200200
250250
Coal ConsumptionCoal Consumption
Criteria EmissionsCriteria Emissions19
70 L
evel Equ
als
10
019
70 L
evel Equ
als
10
0
Source: Energy Information Administration
20032003
Global Fossil Fuels OutlookGlobal Fossil Fuels Outlook
85% of incremental energy from fossil fuels
Carbon emissions to grow by 60%
India, China will account for 67% of the total increase in coal use worldwide
85% of incremental energy from fossil fuels
Carbon emissions to grow by 60%
India, China will account for 67% of the total increase in coal use worldwide
Coal ChallengesCoal Challenges
Transmission
Transportation
Technology
Emissions
Co-op
Industry
IOU
Municipal
Other
Co-op
Industry
IOU
Municipal
Other
Currently Proposed, Planned & Under Construction Coal UnitsCurrently Proposed, Planned & Under Construction Coal Units
Source: Global Energy Decisions
CFB
IGCC
PC
CFB
IGCC
PC
New Entrants - TypeNew Entrants - Type
Unit TypeUnit Type
Co-op
Municipal
Co-op
Municipal
Currently Proposed, Planned & Under Construction Coal Units by Municipals/Cooperatives
Currently Proposed, Planned & Under Construction Coal Units by Municipals/Cooperatives
Source: Global Energy Decisions
CFB
PC
CFB
PC
New Entrants - TypeNew Entrants - Type
Unit TypeUnit Type
QuestionsQuestions
Nicholas P. GuarrielloR. W. Beck, Inc.
(407) 422-4911
IPED COAL POWER CONFERENCE