Transition of the Generation Fleet in a Carbon-constrained World American Public Power Association October 17, 2006 Barbara Tyran Director, Washington Relations
2 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Objective Provide an objective and factual framework for discussing generation technologies and investment decisions in a carbon- constrained world
3 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Framework Overview Levelized cost of electricity –Standard EPRI methodology –Constant 2006 $ costs –Lines are mean values from a range of studies Two key uncertainties –Future “cost” of CO 2 –Future price of natural gas Two technology portfolios – time-period – time-period
4 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Base-load Generation Options Dispatchable Generation –Fossil Generation Pulverized coal (PC) Integrated Gasification Combined Cycle (IGCC) Natural Gas Combined Cycle (NGCC) –Nuclear –Biomass Intermittent Generation –Wind
5 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Pulverized Coal Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Tons CO2/MWh X $50/Ton = +$40/MWh PC
6 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Integrated Gasification Combined Cycle Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh PC IGCC
7 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Natural Gas Combined Cycle Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Tons/MWh x $50/Ton = +$20/MWh
8 © 2006 Electric Power Research Institute, Inc. All rights reserved. September Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Nuclear Biomass Non-CO 2 Emitting Dispatchable Generation
9 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 U.S. Wind Capacity Factors* Average of distribution = 29% Central range = 25-35% *2005 data from Platts
10 © 2006 Electric Power Research Institute, Inc. All rights reserved. September Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Wind Generation CF
11 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Comparative Costs in Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh CF Nuclear PC IGCC Biomass
12 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Take-Aways for Time Period Almost all new dispatchable base-load generation needed to meet U.S. demand growth prior to 2015 will utilize fossil-fueled technologies (NGCC, PC, and IGCC) without CO 2 capture and storage. Wide-scale commercial operation of new advanced light water reactor nuclear plants and new advanced coal plants with CO 2 capture and storage in the U.S. will probably not occur until after 2015.
13 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 What’s Possible: Horizon Key Drivers Technology Advances in Efficiency Cost Reductions through Design Improvements CO2 Capture and Storage - Development and Deployment
14 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Pulverized Coal w/o Capture Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh PC w/o cap PC w/o cap Assumes increased efficiency and some cost reduction
15 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Pulverized Coal with CO 2 Capture and Storage Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Current MEA capture technology (PC) Advanced capture technology (PC-USC) PC w/o capture
16 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 IGCC w/o Capture Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh IGCC w/o capture IGCC, w/o capture Assumes efficiency improvements and cost reductions
17 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 IGCC with CO 2 Capture and Storage Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh IGCC w/ capture ( ) IGCC w/o capture ( )
18 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Advanced IGCC and Advanced PC with Capture Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh IGCC w/o cap IGCC with capture PC-USC with advanced capture* PC w/o cap *midpoint of Ammonia Carbonate and AC/Membrane/Improvement cases Technology “Horserace”…choice may be fuel or operating strategy dependent
19 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Natural Gas Combined Cycle Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh ( ) ( )
20 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Biomass Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Biomass Biomass
21 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Wind Generation Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh 32% CF in % CF in % CF in % CF in
22 © 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006 Comparative Costs in Cost of CO 2, $/metric ton Levelized Cost of Electricity, $/MWh Nuclear Wind Biomass An Extraordinary Opportunity to Develop a Low-carbon Portfolio IGCC w/cap PC w/cap