Technology options under consideration for reducing GHG emissions SUSTAINABLE ENERGY ROUNDTABLE SERIES: Next Steps Post-Kyoto: U.S. Options January 13, 2005 Jeff Williams Manager, Corporate Environmental Initiatives

Portfolio of Initiatives for Clean Energy Future Increase Efficiency Increase Efficiency IGCC / NGCC Reduce Line Losses DSM Reduce Carbon Intensity Reduce Carbon Intensity Renewables Nuclear H2 Storage Sequestration Sequestration CC w Geologic Offsets

Increase Efficiency NGCC 50 – 60% efficient Low capital cost Lower carbon fuel Energy Conservation Process Optimization Reduction of Line Loss Appliance Standards Low Income Weatherization Customer Incentives IGCC w CCS 40-50% efficient 40-50% efficient Fuel Flexibility Fuel Flexibility Clean Clean Low Cost Carbon Capture Low Cost Carbon Capture Energy Security Energy Security

Reduce Carbon Intensity Renewables – Wind Power opportunities in the Northeast, offshore, Western & Midwestern states; opportunities in the Northeast, offshore, Western & Midwestern states; provides a hedge against fuel cost spikes and environmental control costs; provides a hedge against fuel cost spikes and environmental control costs; Off-peak Hydrogen production for increased utilization Off-peak Hydrogen production for increased utilization Drivers for wind power Drivers for wind power –Declining wind cost –Fuel price uncertainty –Green power –Federal & State policies –Energy security

Reduce Carbon Intensity - Nuclear New “passive safe” plant designs reducing capital cost Clean, non-emitting Hedge against fuel price volatility & environmental costs Proven technology with safe operating history

EOR & Geologic Sequestration – The Vision CO 2 captured from stack gases and injected into nearby geologic formations for enhanced oil recovery and ultimate geologic sequestration. CO 2 captured from stack gases and injected into nearby geologic formations for enhanced oil recovery and ultimate geologic sequestration billion barrels of economically recoverable domestic oil – 2 million bbl/day billion barrels of economically recoverable domestic oil – 2 million bbl/day Early demonstration of advanced technologies will drive down costs, improve performance and impact willingness of stakeholders to accept carbon caps. Early demonstration of advanced technologies will drive down costs, improve performance and impact willingness of stakeholders to accept carbon caps. Mandatory Carbon Caps with emissions trading and revenue neutral tax incentives are adopted that augment revenue streams for carbon capture & transport. Mandatory Carbon Caps with emissions trading and revenue neutral tax incentives are adopted that augment revenue streams for carbon capture & transport. Help energy security, increasing domestic supply Help energy security, increasing domestic supply Add jobs, royalties and tax revenues Add jobs, royalties and tax revenues

Geologic Storage in the Gulf Coast Enhanced oil and gas production to offset development cost and speed implementation Very large volume storage in stacked brine formations beneath reservoir footprints (estimated 222 GT CO2 storage capacity in Gulf Coast Region) Near-term and long-term sources and sinks linked in a regional pipeline network

Why is Entergy interested in EOR and Geologic Sequestration? Provides a bridge to achieve CO 2 reductions now while we build capacity for higher efficiency, lower carbon portfolio of generating assets in the future; Provides a bridge to achieve CO 2 reductions now while we build capacity for higher efficiency, lower carbon portfolio of generating assets in the future; Gives us a viable option for managing carbon risk and creating growth opportunities; Gives us a viable option for managing carbon risk and creating growth opportunities; Creates jobs, royalties and tax revenues that helps economic viability of our customer base; Creates jobs, royalties and tax revenues that helps economic viability of our customer base; It helps us create the legacy we want to leave for future generations. It helps us create the legacy we want to leave for future generations.

What Needs to Be Done To Create Physical CO 2 Markets? 1) Federal legislation establishing cap and trade system for greenhouse gases – monetizing ERC value; 2) Federal legislation creating a “Revenue Neutral” Tax Credit for Carbon Sequestration / Oil Production; 3) Conduct research to reduce cost of Carbon Capture technology by 25%; 4) Conduct research to demonstrate and understand performance and fate of geologically sequestered CO 2 ; 5) Develop credible & efficient measurement, monitoring and verification methods for geologic sequestration; 6) Develop and obtain public acceptance of protocols for registering ERCs created from geologic sequestration; 7) Invest in regional pipeline backbone that allows efficient movement of CO 2 from high volume sources to reservoirs.

Questions? ?