the importance of coal for electricity generationthe importance of coal for electricity generation....
TRANSCRIPT
N C S L L e g i s l a t i v e S u m m i t
A u g u s t 1 1 , 2 0 1 3 Jeff Bloczynski, Associate Vice President of Economic Analysis
American Coalition for Clean Coal Electricity
The Impor tance o f Coa l fo r E lec t r i c i t y
Generat ion
T o p i c s
Coal facts
Generat ing economics
Mit igat ing e lect r ic i ty pr ice vo lat i l i t y
Elect r ic re l iab i l i t y
Cleaner coal
Greenhouse gas regulat ions
What next?
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C o a l F a c t s
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Nationally, the amount of coal-fueled generating capacity is
second only to natural gas, yet more electricity is produced
from coal than any other source.
Source: SNL Energy and U.S. Energy Information Administration (EIA) Electric Power Monthly.
G e n e r a t i n g E c o n o m i c s
4 Source: Fuel commodity and delivery prices from SNL Energy, Fixed and Variable O&M costs from EPA, assumes 85% capacity factor,
7,000 Btu/kWh heat rate for Natural Gas CCGT and 10,000 Btu/kWh heat rate for Coal.
The relative cost of electricity from coal and natural gas change
with the market cost of fuel.
All-In Generating Cost by Technology and Fuel
Coal cheaper than gas
Gas cheaper than coal
Coal and gas in competition
G e n e r a t i n g E c o n o m i c s
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Coal prices have a history of stability relative to natural gas prices,
which have nearly doubled from the historic lows of 2012.
Source: SNL Energy.
Market Price for Commodity Fuels
G e n e r a t i n g E c o n o m i c s
Natural gas prices are among the most volatile of any commodity.
Based on the current market, gas prices that were $3.62 per
MMBtu in July 2013 are as likely to rise to $6.08 as fall to $2.46 in
August 2014.
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C o a l m i t i g a t e s h i g h e n e r g y p r i c e s
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Coal reduces the risk of high electricity prices by reducing exposure
to volatile natural gas prices. Coal generates more when gas prices
rise, and less when they fall.
Source: U.S. Energy Information Administration.
Monthly Electricity Generation and Fuel Cost by Source
C o a l s u p p o r t s g r i d r e l i a b i l i t y
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• Coal-fired power plants typically maintain over two months of fuel
on-site, while natural gas generators receive fuel “just-in-time.”
• Most natural gas power plants do not have “firm” fuel supply
agreements, opting for the cheaper “interruptible” rates that may
leave them without fuel during periods of high demand.
• The mismatch between the “gas day” and the “power day” in
energy markets can require natural gas generators to estimate
how much fuel they will need up to two days in advance.
• Increasing amounts of intermittent generation (solar, wind) can
require quick-response from natural gas “peaking” power plants
if they are suddenly unavailable, further taxing the gas supply
infrastructure.
C l e a n e r C o a l
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• Emissions per kilowatt-hour of sulfur dioxide (SO2), nitrogen
oxides (NOx), and particulate matter (PM) from coal-fueled
power plants have been reduced by 89.5 percent over the
period 1970-2012.
• Approximately $110 billion has been invested through 2012 to
achieve these emission reductions.
• By 2015, over 90 percent of U.S. coal-fueled electric
generating capacity will have installed clean coal technologies
and other advanced emission controls to reduce emissions of
SO2, NOx, PM, mercury, acid gases, and non-mercury metals.
N e w S o u r c e P e r f o r m a n c e
S t a n d a r d s f o r G r e e n h o u s e G a s e s
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• In 2012, EPA proposed NSPS limits for greenhouse gas emissions of 1,000
lbs. CO2 per MWh, applicable to both new coal and new natural gas power
plants.
• New coal plants cannot achieve this rate without carbon capture and
sequestration (CCS) technology.
• The President directed EPA to re-propose NSPS by Sept. 20, 2013.
• ACCCE commissioned a study to determine emissions rates that could be
achieved by efficient new coal-fueled power plants.
Subcategory CO2 Emissions Rate
Supercritical (bituminous and subbituminous) ~1,915 lb/MWh
Supercritical (lignite) ~2,150 lb/MWh
Ultra-Supercritical [Emissions rate subject to change]
[~1,900 lb/MWh]
IGCC ~1,915 lb/MWh
Achievable Emission Rates For New Coal Units
C C S S t a t u s
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• There currently are no commercial-scale CCS deployments for
coal-fueled power plants.
• The first CCS-enabled power plant is scheduled to come
online in 2014 (Mississippi Power’s Kemper County IGCC).
• Financed in part with $270 million from U.S. Department of Energy (DOE) as a
CCS demonstration project.
• CCS R&D funding has dwindled.
• In 2009, DOE invested $692M for the coal program which focuses on CCS,
with an additional $3.4B in stimulus funding which supported CCS
demonstration projects primarily.
• In the President’s 2014 budget, no money has been requested for CCS
demonstrations.
• CCS is projected to be expensive to build and operate.
• Estimates range from $43-$95 per tonne CO2 (raising generating costs by
36% - 84%).
W h a t n e x t ?
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• If NSPS requires CCS for new coal units, the industry might
face a catch-22:
• CCS will not develop into a viable, proven technology until
new coal plants demonstrate its effectiveness through
trial-and-error, but…
• …new coal plants will not be built if they are required to
commit to an unproven technology.
• A regulation seemingly intended to spur CCS deployment may
have the unintended consequence of stalling it.
• A NSPS standard that requires CCS amounts to a ban on new
coal power plants.
W h a t c a n y o u d o ?
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EPA is expected to re-propose the greenhouse gas NSPS on
September 20, and has promised to consult with states in
finalizing the rule. If the rule requires CCS for new coal units, you
can:
• Contact state environmental agencies and utility commissions
to voice concerns about the implications for electricity cost
and reliability.
• Talk to EPA and the Administration.
• Tell them that EPA should not set NSPS based on CCS
because that would ban new coal plants and kill CCS.
• File comments with EPA on its re-proposal.