1. 1 © 2008 Electric Power Research Institute, Inc. All rights reserved. The Power to Reduce CO 2 Emissions The Full Portfolio Energy Technology Assessment Center Electric Power Research Institute

2. 2 © 2008 Electric Power Research Institute, Inc. All rights reserved. Presentation Objective…Answer Three Questions What is the technical potential for reducing U.S. electric sector CO 2 emissions? What are the economic impacts of different technology strategies for reducing U.S. electric sector CO 2 emissions? What are the key technology challenges for reducing electric sector CO 2 emissions?

3. 3 © 2008 Electric Power Research Institute, Inc. All rights reserved. TechnologyEIA 2008 ReferenceTarget EfficiencyLoad Growth ~ +1.05%/yrLoad Growth ~ +0.75%/yr Renewables55 GWe by 2030100 GWe by 2030 Nuclear Generation15 GWe by 203064 GWe by 2030 Advanced Coal Generation No Heat Rate Improvement for Existing Plants 40% New Plant Efficiency by 2020–2030 1-3% Heat Rate Improvement for 130 GWe Existing Plants 46% New Plant Efficiency by 2020; 49% in 2030 CCSNoneWidely Deployed After 2020 PHEVNone 10% of New Light-Duty Vehicle Sales by 2017; 33% by 2030 DER< 0.1% of Base Load in 20305% of Base Load in 2030 Achieving all targets is very aggressive, but potentially feasible. AEO2007*(Ref) AEO2008* (Early release) AEO2008*(Ref) *Energy Information Administration (EIA) Annual Energy Outlook (AEO) Impact of efficiency measures in Energy Independence and Security Act of 2007 (EISA2007) 2008 Prism... Technical Potential for CO 2 Reductions

4. 4 © 2008 Electric Power Research Institute, Inc. All rights reserved. Generation Mix Coal w/o CCS 39% Advanced Coal w/CCS, 13% Natural Gas 5% Nuclear 29% Conventional Hydropower 5% Non-Hydro Renewables, 9% EPRI “Prism” Projected 2030 Generation Mix EIA 2008 with Energy Bill – Projection for 2030 Petroleum, 1% Coal, 58% Natural Gas, 11% Conventional Hydropower, 6% Non-Hydro Renewables, 5% Nuclear, 19% 2007 U.S. Electricity Generation Mix Petroleum, 1% Coal, 51% Natural Gas, 18% Conventional Hydropower, 7% Non-Hydro Renewables, 2% Nuclear, 21%

5. 5 © 2008 Electric Power Research Institute, Inc. All rights reserved. The Scale of Electricity Demand 2007 U.S. electricity consumption ~ 3800 TWh –NY metro area ~ 89 TWh/year (as of 2006) EIA 2008 Annual Energy Outlook –Preliminary report projects 1150 TWh (30%) increase in U.S. electricity consumption by 2030. –~Equivalent to addition of 13 New York metro areas –Greater than addition of new load equivalent to 2006 consumption of Texas, California, Florida, Ohio, Pennsylvania

6. 6 © 2008 Electric Power Research Institute, Inc. All rights reserved. The Scale of Electricity Demand Scale of generation –One advanced light water nuclear plant (1400 MW, 90% CF) ~ 11 TWh –One coal plant (500 MW, 80% CF) ~ 3.5 TWh –One natural gas turbine (400 MW, 40% CF) ~ 1.4 TWh –One 100 MW Wind Farm (100 1 MW Turbines, 40% CF) ~ 0.35 TWh Intensity of CO 2 emissions –One coal plant (500 MW, 80% CF) ~ 3-4 MMT CO 2 /yr. Depends on coal type, plant technology, heat rate –Natural gas emits at ~ ½ intensity of coal LNG combustion can be ~50%-66% of CO 2 intensity of coal, depending on source and supply chain.

7. 7 © 2008 Electric Power Research Institute, Inc. All rights reserved. Presentation Objective…Answer Three Questions What is the technical potential for reducing U.S. electric sector CO 2 emissions? What are the economic impacts of different technology strategies for reducing U.S. electric sector CO 2 emissions? What are the key technology challenges for reducing electric sector CO 2 emissions?

8. 8 © 2008 Electric Power Research Institute, Inc. All rights reserved. PRISM electric sector CO 2 profile most closely modeled by economy-wide constraint which: −Caps emissions at 2010 levels until 2020 −Requires 3% decline beginning in 2020 −37% of 2005 emissions levels by 2050 Representative U.S. Economy-Wide CO 2 Constraint 0 1 2 3 4 5 6 7 8 9 200020102020203020402050 Billion Tons CO 2 per year Starting Point is Current Intensity Target 2010 Cap to 2020 3% decline

9. 9 © 2008 Electric Power Research Institute, Inc. All rights reserved. Electricity Technology Scenarios Full PortfolioLimited Portfolio Supply-Side Carbon Capture and Storage (CCS) AvailableUnavailable New Nuclear Production Can Expand Existing Production Levels ~100 GW RenewablesCosts DeclineCosts Decline Slower New Coal and GasImprovements Demand-Side Plug-in Hybrid Electric Vehicles (PHEV) AvailableUnavailable End-Use Efficiency Accelerated Improvements Improvements

10. 10 © 2008 Electric Power Research Institute, Inc. All rights reserved. Full Technology Portfolio Reduces Costs of a CO 2 Emissions Reduction Policy by 60% 0.0 -0.5 -1.5 Change in GDP Discounted Through 2050 ($Trillions) Cost of Policy Reduction in Policy Cost with Advanced Technology Value of R&D Investment Limited Portfolio + PHEV Only + Renewables Only + Efficiency Only + Nuclear Only + CCS Only Full Portfolio $1 Trillion

11. 11 © 2008 Electric Power Research Institute, Inc. All rights reserved. Wholesale Electricity Price Full Limited $/MWh* Index Relative to Year 2000 *Real (inflation-adjusted) 2000$ Year 0 20 40 60 80 100 120 140 160 180 200020102020203020402050 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 In the Full Portfolio the price of electricity has a low CO 2 cost component and increases less

12. 12 © 2008 Electric Power Research Institute, Inc. All rights reserved. U.S. Electric Generation – Limited Portfolio Gas (with half the CO 2 of coal) pays a significant CO 2 cost With a less de-carbonized supply, electricity load must decline to meet the CO 2 emissions target Biomass Coal Gas Nuclear Hydro Wind

13. 13 © 2008 Electric Power Research Institute, Inc. All rights reserved. U.S. Electric Generation – Full Portfolio Gas and non-captured coal are the only supply options paying a CO 2 cost The vast majority of electricity supply is CO 2 -free The vast majority of electricity supply is CO 2 -free Public Policy (e.g. RPS) can modify this economic allocation Coal Coal with CCS Gas Nuclear Hydro Wind

14. 14 © 2008 Electric Power Research Institute, Inc. All rights reserved. +45% Both Scenarios meet the same economy-wide CO 2 Cap* *Economy-wide CO 2 emissions capped at 2010 levels until 2020 and then reduced at 3%/yr Increase in Real Electricity Prices… 2000 to 2050 +260%

15. 15 © 2008 Electric Power Research Institute, Inc. All rights reserved. Presentation Objective…Answer Three Questions What is the technical potential for reducing U.S. electric sector CO 2 emissions? What are the economic impacts of different technology strategies for reducing U.S. electric sector CO 2 emissions? What are the key technology challenges for reducing electric sector CO 2 emissions?

16. 16 © 2008 Electric Power Research Institute, Inc. All rights reserved. Transition to Low-Emissions Technologies Expanded Advanced Light Water Reactor Deployment Enabling Efficiency, PHEVs, DER via the Smart Distribution Grid Enabling Intermittent Renewables via Advanced Transmission Grids Advanced Coal Plants with CO 2 Capture and Storage

17. 17 © 2008 Electric Power Research Institute, Inc. All rights reserved. $1,000B $30B RD&D Investment (2005-2030, present value in 2000 $) Avoided Cost to U.S. Economy (2000-2050, present value in 2000 $) RD&D is a Good Investment

18. 18 © 2008 Electric Power Research Institute, Inc. All rights reserved. Demonstration Projects Hyper-efficient electric end-use technologies Smart grids Compressed air energy storage PC with partial CCS Two alternate capture technologies IGCC with partial CCS Lower-cost O 2 production 2008 EPRI Priority…Analysis to Action Technology Challenges 1.Enabling energy efficiency with efficient end-use technologies and smart grids 2.Enabling intermittent renewables with advanced transmission and energy storage 3.Deploying advanced light water reactors 4.Deploying CCS by 2020

19. 19 © 2008 Electric Power Research Institute, Inc. All rights reserved. The Full Portfolio: Lower CO 2, Lower Prices +45% *Economy-wide CO 2 emissions capped at 2010 levels until 2020 and then reduced at 3%/yr +260% Conclusions The potential to reduce emissions is there.The potential to reduce emissions is there. Development of a Full Portfolio of technologies substantially lowers the cost of reducing CO 2 emissions and helps keep electricity affordable.Development of a Full Portfolio of technologies substantially lowers the cost of reducing CO 2 emissions and helps keep electricity affordable. Key technology challenges must be overcome to launch the Full Portfolio of technologies.Key technology challenges must be overcome to launch the Full Portfolio of technologies. Demonstration projects are essential to launching technology.Demonstration projects are essential to launching technology.

20. Image courtesy of NASA Visible Earth