1. 1 Canadian Clean Power Coalition: Delivering Results for Over a Decade Presented to Alberta Innovates – Energy and Environment Solutions CCPC 19 December 2014

2. Who Is the CCPC? An association of Canadian and U.S. coal and coal-fired electricity producers, government agencies and research organizations Industry participants include: –Alberta Innovates – Energy and Environment Solutions –Capital Power Corporation –Electric Power Research Institute (EPRI) –Nova Scotia Power Inc. –Lignite Energy Council –SaskPower –TransAlta Corporation Government Sponsors: –Saskatchewan Ministry of Energy and Resources –Natural Resources Canada (CanmetENERGY)

3. Our Mandate The CCPC's mandate is to research technologies with the goal of developing and advancing commercially viable solutions that lower coal power plant emissions Our objective is to demonstrate that coal-fired electricity generation can effectively address environmental issues and move us forward to a cleaner energy future

4. Why Keep Coal In Mix Economic growth is dependent upon low energy costs –Coal is a much lower cost form of energy than gas –Alberta alone has 2 trillion tonnes of coal The cost of replacing coal plants with NGCC is high –5,000 MW X ($90/MWh for NGCC - $50/MWh for coal, O&M and life extension- no CCS) X 8,000 hour/yr X 20 years = $30 billion Gas prices will not remain low forever – reliance on one fuel is risky The cost of CCS technology is coming down 4

5. What Role Can Coal Play? 1)Existing coal plants can operate > 50 years of age by: –Employing biomass and/or natural gas fuels –Being repowered with advanced cycles with carbon capture –Retrofitting with carbon capture –Or by using a combination of the above 2) New coal plants can be built –Employing biomass and / or natural gas –With advanced cycles with carbon capture –Using carbon capture –With in-situ gasification with carbon capture –Or by using a combination of the above 5

6. Will Coal Life be Extended? Coal plants may operate for more than 50 years if: NPV n (Power Rev – Opex – Tax) > Life Extension Cost (Capex) + Cost of Other Emission Control Technology (Capex & Opex) + Cost of GHG Reduction Technology (Capex & Opex) Same equation for new coal plants except life extension cost becomes construction cost 6

7. Phase IV Studies Advanced Cycles ($150,000) Looking at new more efficient ways to burn coal –EPRI is looking at a dozen novel cycles for burning coal more efficiently – ORC work with CANMET looks promising Coal Beneficiation ($600,000) Testing four coals to see how well commercial technologies will reduce ash, sulfur, quartz and moisture –Completed float sink analysis and combustion tests on four coals to estimate how commercial technologies will work Advanced Non-aqueous CO2 Capture ($100,000) –EPRI is reviewing the characteristics of 20 new novel post combustion capture options

8. Phase IV Studies Biomass Co-firing Work ($130,000) Studied cost of biomass co-firing in 3 provinces –FP Innovations looked at the cost of a dozen kinds of biomass at 10, 20 and 70% co-firing rates –Participating in co-firing project IGCC Partial Capture ($395,000) Studied cheaper ways to comply with government regs Jacobs studied novel configurations to capture part of the CO 2 generated by SES, ESTR and PWR gasifiers In-situ Gasification ($1,000,000) Looked at various in-situ gasification technologies and ways to use the syngas –This million study looked at various technologies and uses for syngas including power, FT Liquids and fuel for OTSG 8

9. Technologies to Consider Co-firing IGCC with Partial Capture In-situ Gasification Molten Carbonate Fuel Cells 9

10. Co-firing Introduction FP Innovations studied co-firing at three coal plant at 10, 20 and 70% firing rates The costs for about a dozen kinds of fuel were estimated The volume of existing fuels were estimated within 100 and 150 km of the plants The proportion of farm area around the plants was determined for plantation crops Estimated costs for growing, harvesting, transporting, processing, storing, drying, handling, conveying and combusting 10

11. Avoided Cost – 70% 11

12. Increase in Power Cost – 70% 12

13. Increase in Power Cost for Biomass and Nat Gas Co-Firing 13

14. Avoided Cost – Biomass/ Nat Gas 14

15. Cost of Power with Co-firing 15

16. Co-firing Conclusions Co-firing CO 2 avoided costs may range from $20 to $100/t Won’t be adopted at $15/t carbon tax Co-firing may cost less than carbon capture or a new NGCC Plants with short economic lives may benefits from co- firing rather than carbon capture Co-firing will increase marginal costs – Dispatch issues It may not be possible to co-fire enough biomass to meet new GHG requirements - Reduces amount of capture Co-firing can reduce sulphur emissions – Nat Gas Largest cost is for biomass feedstock – need to refine costs

17. IGCC Partial Capture Cases 17 Case12345-25-46 Air Separation Cryogenic Air Prod ITM Cryogenic Gasifier AR SESARSESCB&I Shift Sour Sour, with bypass Sour Sour, with bypass None Sulphur Recovery LO-CAT Selexol Claus/SCOT CO2 Recovery Partial Condensation PSAMembraneSelexolPSASelexol Gas Turbine GE 7F Syngas Steam Turbine 3 Pressure Reheat

18. First Year Cost of Power 18

19. First Year Cost of Power Net 19

20. Capture Cost Components 20

21. ISCG Power Costs 21

22. Electrochemical Membrane (ECM) Technology 22 Net Results Simultaneous Power Production and CO 2 Separation from Flue Gas of an Existing Facility Excess Process Water Byproduct Complete Selectivity towards CO 2 as Compared to N 2 The driving force for CO 2 separation is electrochemical potential, not pressure differential across the membrane

23. MW-Class CEPACS System Demonstration at CanmetENERGY Canmet 300 kW VCRF provides flue gas to MW-Class CEPACS system CEPACS system internal recycle streams to increase flue gas flow to required level CEPACS system produces: High-purity liquid CO 2 product (~25 T/D) Electric power (~800kW net) Fuel & Water Preheat Fuel Recovered Water Anode Cathode Pre-Heat Canmet Combuster (VCRF) Electric Power CO 2 Purification & Compression Liquid CO 2 Anode Exhaust Cooling Water Recovery Electrochemical Membrane (ECM) Exhaust (CO 2 & NO x Depleted Flue Gas) Heat Recovery SO 2 Polishing Flue Gas Air Objective: Demonstrate feasibility of FuelCell Energy’s MW-class ECM-based CEPACS system for carbon separation in both NG and coal combustion flue gas applications. 23

24. FCE Repowering Cases - Alberta Six cases were created for comparison purposes –NGCC: Without CCS as key power supply alternative –AB Coal: Base coal plant assumed to be new built –AB Coal & FCE: New base plant plus fuel cells –AB Coal w PCC: New base plant plus post combustion capture –R AB Coal & FCE: As above but without capital for new coal plant –R Lingan w PCC: As above but without capital for new coal plant These cases were largely based on the Lingan cases 24

25. Base Information 25 As gas price of roughly $5.00/GJ was used

26. Capital Costs 26

27. CO 2 Capture 27 Flue gas processed with molten carbonate fuel cells will have almost no sulfur emissions and lower NOx emissions compared to the base plant

28. Cost of Capturing CO 2 The cost of capture for the AB Coal w CCS case is $94.5/t without life extension and FGD costs. The cost of capture for the AB Coal & FCE case is $57/t without life extension and FGD costs 28

29. New Build First Year COE 29

30. Retrofit First Year COE 30

31. Fuel Price Sensitivity 31

32. FCE w CCS Capex Sensitivity 32

33. Add $200 million to Capex 33

34. Cell Life Impact 34

35. FCS w CCS Output Sensitivity 35 Note: This is on the whole output, not just the fuel cell portion. 10% change in output is 44 MW for FCE case. This is 26% of gross fuel cell output.

36. Conclusions Molten carbonate fuel cells retrofitted to a coal plant may have a cost of power similar to a new NGCC The marginal cost and average cost of the fuel cell, once capital is sunk, may be similar to the power cost of an NGCC Molten carbonate fuel cells capturing flue gas CO 2 should be demonstrated to better understand their actual operating performance under various conditions and their performance during longer term tests 36

37. Phase IV Conclusions ISCG holds real promise to use undeveloped coal resources to produce power and FT liquids IGCC with partial capture likely has lower costs of power than SCPC with partial capture Biomass co-firing with or without natural gas is likely economically viable for extending the life of coal plants particularly if the carbon tax increases – availability? Fuel cells and other repowering options may be employed to extend the life of coal plants Companies need to continue to consider new developing options to preserve $10 billion worth of coal assets 37

38. Phase V Three year program Starting in December 2014 Sherritt departed The Lignite Energy Council joined Looking at projects to keep coal in the mix Project timeframes: –Before plants reach 50 years of age –After plants reach 50 years of age – life extension –Greenfield 38

39. Phase V Projects 1)Repowering: Look at novel cycles to repower existing coal plants (Advance Brayton cycles, CLC, nat gas, etc.) 2)Second Commodity: Study new processes to produce power and another commodity with coal 3)Greenfield: Review novel ways to produce power with coal with lower GHG emissions (Advanced Brayton cycles, small efficient biomass co-fired plants, etc.) Plan to work with AR on their Oxy-PFBC project 39

40. Phase V Projects Con’t 4) Fuel Cell Repowering: Coupling molten carbonate or solid oxide fuel cells with a coal plant holds real promise – may do a pilot at Canmet – Will rely on current DOE work 5) Novel Carbon Capture: Further work started by EPRI in Phase IV on advanced carbon capture technologies 6) Demonstrate Coal Beneficiation: If current studies show that coal beneficiation is promising, may engage in a pilot 40

41. Phase V Projects Con’t 7) Heat Recovery: Canmet is developing ways to condense water and sulfur from flue gas while recovering heat 8) NOx and SOx Due Diligence: Want a credible third party to review new emission control ideas 9) Participation in AR Oxy-PFBC project 10) May get involved in FCE pilot 41

42. Other Important Work Canmet Task Shared Work - Canmet is completing about $3.6 million of research on gasification, CLC, oxycombustion, etc with us – New work in Phase V Lignite Energy Council - They are working on Net Power study, solid sorbents, CLC – Alstom, gasification, SCR Catalyst demo, PCOR III, NOx control, UCG, and ways to use lignite EERC & LEC collaboration: Access to EERC reports and evaluation of promising post combustion technologies, e.g.ION Engineering, Neuman Contactor Global CCS Institute - Active member 42

43. Other Important Work con’t Maintain website with wealth of information:150+ reports plus section on CCUS Networking with Alberta Innovates-Energy and Environment Solutions, ICO2N, the CO2 Capture Project, Coal Association of Canada, CCEMC, EERC, EPRI, IPAC, NETL, Wood Pellet Association of Canada, Canmet, Carbon Management Canada, Several Universities, etc. –Hold meetings on new technologies –Offer to work together on new projects –Share ideas and information 43