Download presentation
Presentation is loading. Please wait.
Published byJaycee Doidge Modified over 10 years ago
1
Southern Company Generation – Fuel Overview – Scott D. Clouse March 5, 2009 Fueling the World's Best energy company ─ reliably and economically
2
Presentation Overview Southern Company at a glance Strategy and Coal Procurement Process 2009 Southern Company Outlook Future Generation Growth
3
Southern Company at a glance Four Electric Utilities – Georgia Power – Alabama Power – Mississippi Power – Gulf Power Southern Nuclear 42,000 MW’s of generating capacity 4.3M customers
4
Southern Company Capacity Mix
5
Southern Company Generation Mix
6
2008 Coal Metrics: Total Coal Cost: $5.1 B – Coal Commodity$3.3 – Transportation$1.6 – Taxes$0.1 – Lease & Maint.$0.1 Coal Tons: 75.2 M Coal MWs: 21,282 Coal Plants: 21 Coal Units: 65 Largest coal rail fleet in U.S. – excluding the railroads (either owned or leased): ~18,000 rail cars
7
PRB 37.8% 28.4 M Tons Western 2.6% 2.0 M Tons Illinois Basin 1.3% 1.0 M Tons CAPP 31.3% 23.6 M Tons Import – 15.7% 11.8 M tons (Colombian & Venezuelan via Ports at Mobile, Charleston and Port Kraft) Alabama 11.2% 8.4 M Tons Southern Company Coal Generation: 21 Coal Plants (65 units) 75.2 million tons 2008 Diversity of Coal Purchases 2008 Tons and % by Region – 100% Ownership * Data reported January – December 2008 Actual Receipts from FAACS
8
Southern Company- Transportation Diversity Watson Daniel Barry Crist Smith Greene Cty. Gorgas Miller Wansley McDonough Branch McIntosh Kraft Yates Bowen Hammond Mitchell Scholz Gadsden Gaston Scherer Barge Transportation Rail Transportation (Kraft is Ocean Vessel)
9
Diversity of Coal Transportation Modes- 2008 Purchases
10
Actions taken to improve Southern’s Coal Supply Position Increased diversification of supply sources as more Colorado, Utah, and Illinois Basin coals have been purchased for various plants Test burns of Illinois Basin coals at some of the system’s non- scrubbed plants Feasibility study of PRB conversions Reviewing opportunities to blend PRB or Illinois Basin coal at various plants Developing 3 million annual ton rail to barge loading capacity at Alabama State Docks (ASD) in Mobile, AL Maintaining increased railcar fleet reserves to allow some non- traditional supply moves as constraints emerge Constructed Gorgas transloader to support truck coal sourcing
11
Strategy and Coal Procurement Process Provide a reliable, low cost, environmentally acceptable fuel supply
12
Evaluate the entire value chain of fuel, transportation, operations and allowances to achieve the lowest reasonable total cost while meeting reliability and environmental requirements. Five key risks identified and strategies to mitigate: Volume: Flexibility needed to adjust to burn fluctuations Procure to guideline percentages based on the generation nature of the unit Price: Goal to be at market while mitigating significant swings Typically 3 to 5 year contracts Supply: Seek diversity of supply regions and transportation modes Blending coal opportunities Reliability: Creditworthiness Replacement cost language Environmental: Incorporate non-negotiable Environmental Force Majeure language in ALL contracts Coal Procurement Strategy
13
Coal Procurement Process Execute Contract(s) Paperwork (FAACS, Comtrac, P.O.’ s, etc.) Paperwork (FAACS, Comtrac, P.O.’ s, etc.) Negotiate Terms and Conditions Short List NPV Analysis Long Term (Mail) Strategic Plan Projected Need Internet RFP Posting Spot (CIBS) Initial Screening Railcar Team OPCOs/ Plants Logistics Admin Field Reps Interaction/Feedback/Inputs Execute Confirmation (LOI) Treasury Delivered cost evaluation
14
DE GX EC GX Freight Cost Coal Cost Coal Pile Inventory Carrying Cost = Total Cost of Process (Burn) Environment al Costs (So 2, NO x, etc) Railcar Cost L&M EC GX Plant Fuel Handling Total Cost Equation
15
Note: Assumes 12,000 btu/lb coal; 1% sulfur at $300/ton of SO 2 for Plant X Subtotal before Sulfur= $100.65/ton or $4.19 per MMBtu Total with Sulfur= $106.65/ton or $4.44 per MMBtu Total Cost Example by Component
16
Evaluation of NO x Background: – Due to requirements of the Clean Air Amendments of 1990, all OPCo’s now include NOx in the delivered cost equation – NOx predictor model (EPRI/SoCo) includes all Southern Company coal units Process: – Enter mine specific ultimate analysis into NOx predictor model – Evaluate to applicable unit(s) Result: – The unit specific result is reported in lbs/mmbtu – This result is converted to a $/mmbtu result by multiplying by $/ton NOx cost Example: Model result for Mine A to Plant X= 0.400 lbs/mmbtu NO x allowance cost = $2,880/ton 0.400 lbs/mmbtu x $2,880/ton= $0.576/mmbtu 2,000 lbs/ton
17
Total Cost Example by Component (w/ NO x ) Notes: Assumes 12,000 btu/lb coal; 1% sulfur at $300/ton of SO 2 and $2,880/ton for NO x for Plant X and assumes Plant X has no NO x controls. Total with Sulfur and NO x = $120.44/ton or $5.02 per MMBtu Subtotal with Sulfur= $106.65/ton or $4.44 per MMBtu
18
2009 Southern Company Outlook Decrease in coal burn – Natural gas – Economy – Environmental costs Increase in Inventory – Strategically optimize system inventories to account for any overage – Carrying cost vs. avoided cost Projected Purchases – 2009 – 2010 - forward
19
Tons X 1,000 Southern Company Generation Coal Program Status as of January 9,2009 Includes Co-Owners ; January 2009 DEPS Update * Committed tons include options –this analysis includes projected burns and commitments that are in place. % Committed* 100.0%88.0%61.5%32.3%17.2%4.4%3.1% % Pending "Out in the Market" 0% % Additional Uncommitted 0%12.0%38.5%67.7%82.8%95.6%96.9%
20
Future Generation Supply Nuclear – Vogtle 3 & 4 – Georgia Power Company –2,200 MW - ownership share is 45.7% –Certification ruling in March/April 2009, on-line in 2016 and 2017 Gas CC – Plant McDonough conversion – Georgia Power Company –500MW coal to 3 gas/oil CC units at 840MW each –Completed in 2012 IGCC – Kemper County – Mississippi Power Company –582 MW lignite mine mouth coal gasification plant –Carbon capture and sequestration capabilities –Certification ruling in late 2009, on-line in November 2013 Biomass – Plant Mitchell conversion – Georgia Power Company –96 MW – one of largest biomass plants in the country –Certification ruling in March/April 2009, on-line in June 2012 –Lower fuel and operating costs when compared to continued operation using coal Plentiful supply all within 100 miles, low transportation costs Biomass – 5% co-firing being studied at many other system plants
21
Conclusion 2009 will continue to present challenges Environmental costs will continue to have a negative impact on coal burn No projected additional coal purchases this year 2010 and beyond there are projected needs Southern Company is continuing to investigate new generation sources
22
Fuel Services Vision: Fueling the World's Best energy company ─ reliably and economically
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.