1. U.S. EPA’s Clean Air Gasification Activities Robert J. Wayland, Ph.D. U.S. Environmental Protection Agency Office of Air and Radiation Office of Air Quality Planning and Standards Research Triangle Park, N.C. Presentation at the Gasification Technologies Council Winter Meeting January 26, 2006 Tucson, Arizona

2. Environmental Technology Initiative Key leaders at the Agency understand that innovative technology has been and will continue to be a key element in meeting our environmental needs in a economical, cost-effective manner Key leaders at the Agency understand that innovative technology has been and will continue to be a key element in meeting our environmental needs in a economical, cost-effective manner EPA Senior management challenged Agency staff to figure out ways to facilitate and incentivize the development and deployment of such technologies EPA Senior management challenged Agency staff to figure out ways to facilitate and incentivize the development and deployment of such technologies –Created the Environmental Technology Council (ETC) Solicited topics for consideration Agency-wide Solicited topics for consideration Agency-wide –47 possible technologies and environmental problems in need of technology solutions were identified –14 projects were selected as “priorities” for the Agency, based on Agency-wide voting across all EPA offices and Regions.

3. Two Gasification Projects Selected Integrated Gasification Combined Cycle (IGCC) Integrated Gasification Combined Cycle (IGCC) –Generating electricity from the gasification of coal and other fossil fuel byproducts –Office of Air and Radiation is lead office on development and deployment of IGCC technology Waste-to-Energy Waste-to-Energy –Utilization of biomass, petroleum residuals, petroleum coke, secondary materials –Office of Research and Development in conjunction with the Office of Solid Waste are the leads on the waste-to- energy effort –OAR, ORD and OSWER are working together as a cross- Agency team to promote these technologies for deployment

4. Coal – The Future of Electricity Generation The world needs to make electricity from coal in an environmentally and economically sustainable way The world needs to make electricity from coal in an environmentally and economically sustainable way –IGCC has fundamental advantages from both environmental and efficiency perspectives relative to conventional coal-fired power generation technologies Inherently lower emissions of NO X, SO 2 and Hg Inherently lower emissions of NO X, SO 2 and Hg Requires less fresh water – special issue in the drier, water-limited Western regions of the U.S. Requires less fresh water – special issue in the drier, water-limited Western regions of the U.S. Considerably more commercially useful byproducts (and thus, less waste materials) Considerably more commercially useful byproducts (and thus, less waste materials) –High potential for reducing Greenhouse Gas (GHG) emissions by allowing for carbon capture and sequestration at costs significantly below conventional PC generation costs CINERGY’s Wabash River Facility

5. Gasification Offers Clean Alternative 0.5 1 1.5 2 SCPCIGCCNGCC NOxSO 2 PMHg ~80%95%+ NOxSO 2 PMHgNOxSO 2 PMHg ~0 lb/MWh Estimated New Plant Emissions Performance Proposed Da SO 2 limit Proposed Da NOx limit Proposed Da PM limit* * - Taking comment on the adoption of PM-CEMS; other alternative is 0.015 lb/MMBtu limit

6. EPA’s Role in Deployment The Environmental Technology Initiative’s purpose is to The Environmental Technology Initiative’s purpose is to –Achieve improved, real-world environmental results through the design, development and deployment of innovative technologies Identify short- and long-term priority environmental problems with attainable technological solutions Identify short- and long-term priority environmental problems with attainable technological solutions Coordinate efforts within EPA and other Federal agencies to identify and implement such technological advancements and solution Coordinate efforts within EPA and other Federal agencies to identify and implement such technological advancements and solution Create partnerships with other Federal agencies, State governments, Tribal governments, non-profit groups and industry to incentivize technology enhancements and deployment Create partnerships with other Federal agencies, State governments, Tribal governments, non-profit groups and industry to incentivize technology enhancements and deployment –Creation of joint EPA/DOE team to promote deployment of IGCC

7. EPA/DOE Team Activities Objective is to facilitate a critical number of commercial plants to address both environmental and operational concerns Objective is to facilitate a critical number of commercial plants to address both environmental and operational concerns EPA Air Permitting Initiatives EPA Air Permitting Initiatives -Identification and quick resolution of novel air permitting issues -Help in expediting the air permit process DOE/EPA developing a model to assess the economic viability of IGCC plants under different conditions DOE/EPA developing a model to assess the economic viability of IGCC plants under different conditions EPA/DOE conducting a technical study to establish the environmental footprint of the IGCC technology relative to conventional PC plants EPA/DOE conducting a technical study to establish the environmental footprint of the IGCC technology relative to conventional PC plants

8. EPA Actions to Date – Progress Report Regulatory Issues Regulatory Issues –Current issue for IGCC facilities is New Source Review (NSR) and Prevention of Significant Deterioration (PSD) permitting December 13, 2005 – Steve Page memo (IGCC and BACT) December 13, 2005 – Steve Page memo (IGCC and BACT) –EPA’s interpretation of when IGCC should be considered in NSR and PSD permitting –In the case of pulverized coal boilers and similar conventional coal-fired technologies, IGCC should not be considered as control technology candidate under BACT –Selective Catalytic Reduction (SCR) as BACT for IGCC units Headquarters and Regional offices want to work with companies interested in developing IGCC technology in the near future Headquarters and Regional offices want to work with companies interested in developing IGCC technology in the near future EPA is committed to working with State permitting authorities EPA is committed to working with State permitting authorities –States are the primary permitting authority under NSR/PSD – often can be more stringent than Federal regulations –Agency is attempting to be “upfront” and let States know “where we stand” on IGCC permitting issues Anticipate this may help expedite and streamline the NSR & PSD permitting process considerably Anticipate this may help expedite and streamline the NSR & PSD permitting process considerably

9. Potential Regulatory Hurdles Should Selective Catalytic Reduction (SCR) be required as best achievable control technology (BACT) for IGCC? Should Selective Catalytic Reduction (SCR) be required as best achievable control technology (BACT) for IGCC? –TECO’s Polk Power Station, Tampa, Florida Florida DEP ultimately decided in conjunction with Region IV that SCR was not required as BACT – a position supported by Headquarters Florida DEP ultimately decided in conjunction with Region IV that SCR was not required as BACT – a position supported by Headquarters –BACT is a case-by-case determination “One Size Doesn’t Fit All” “One Size Doesn’t Fit All” –Circumstances at a new plant may not be the same as what drove our decision at Polk Power Station Regardless, SCR as BACT is a decision that merits our attention and resolution sooner as opposed to later Regardless, SCR as BACT is a decision that merits our attention and resolution sooner as opposed to later

10. SCR Technical Issues Currently reviewing request from U.S. power company for guidance on SCR as BACT Currently reviewing request from U.S. power company for guidance on SCR as BACT Issues under review: Issues under review: –SCR not demonstrated on plants utilizing coal- derived syngas Lack of U.S. experience Lack of U.S. experience One plant operational in Japan One plant operational in Japan –SCR feasibility, high cost and risk issues vary between IGCC plants, PC plants and NGCC facilities –Ability to obtain meaningful performance guarantees for SCR and/or HRSG systems –SO 2 BACT analysis and its impact on SCR costs and feasibility MDEA, Rectisol or Selexol MDEA, Rectisol or Selexol

11. Potential Regulatory Incentives Final New Source Performance Standards (NSPS) for Subpart Da Final New Source Performance Standards (NSPS) for Subpart Da –IGCC Units constructed on/after February 9, 2005 would be subject to the same emission limits as a coal-fired boiler Given current IGCC technology, this should not pose any regulatory burden on new, planned IGCC facilities Given current IGCC technology, this should not pose any regulatory burden on new, planned IGCC facilities –Duct burners moved into KKKK Final Clean Air Mercury Rule (CAMR) Final Clean Air Mercury Rule (CAMR) –Created separate source category for IGCC units Hg emission limit of 20 x 10 -6 lb/MWh Hg emission limit of 20 x 10 -6 lb/MWh Comparable to a bituminous PC- fired power generation system Comparable to a bituminous PC- fired power generation system

12. Future Plans and Needs To incentivize the commercial deployment of IGCC technology EPA needs to better understand the environmental footprint of these facilities relative to conventional power generation technologies To incentivize the commercial deployment of IGCC technology EPA needs to better understand the environmental footprint of these facilities relative to conventional power generation technologies –EPA/DOE Environmental Footprint Study EPA is working on models to assess the economic viability of IGCC plants under different conditions EPA is working on models to assess the economic viability of IGCC plants under different conditions –Working closely with DOE on these economic and environmental efforts One remaining barrier is the cost of IGCC technology One remaining barrier is the cost of IGCC technology –EPA is working in conjunction with DOE to evaluate various proposals to address this economic barrier –Energy Policy Act of 2005 Exploring options and incentives Exploring options and incentives

13. Draft Results of EPA’s IGCC vs. PC Study Nexant, Incorporated contracted to perform study in conjunction with EPA and DOE input Nexant, Incorporated contracted to perform study in conjunction with EPA and DOE input –Solicited comment/input on draft report from numerous stakeholder groups Final results targeted for discussion at the GTC meeting in Tampa, Florida in March 2006 Final results targeted for discussion at the GTC meeting in Tampa, Florida in March 2006 –Public release March 2006 Aspects of the Study Aspects of the Study  Thermal performance of IGCC and PC units  Estimated air emissions  Water use requirements and solid waste output  CO 2 capture and sequestration potential

14. Barriers to IGCC Deployment Concerns of higher costs Concerns of higher costs –Nominally considered to be approximately 20% Concerns of novel environmental permit issues delaying construction and increasing costs Concerns of novel environmental permit issues delaying construction and increasing costs –NSR and PSD issues –BACT analyses Concerns of plant reliability Concerns of plant reliability –Need for dual-train gasifier –HRSG fouling downstream of the SCR –Power block reliability Cultural resistance to a facility with a large chemical plant component Cultural resistance to a facility with a large chemical plant component –Chemical Engineers vs. Mechanical Engineers

15. Technical Study Scope IGCC and PC plant comparisons provided, using bituminous/subbituminous coals and lignite IGCC and PC plant comparisons provided, using bituminous/subbituminous coals and lignite Plant size:500 MW Plant size:500 MW Plant configurations: Plant configurations: -Oxygen-blown IGCC, 1,800 psig / 1,000° F / 1,000° F -Subcritical PC, 2,400 psig / 1,000° F / 1,000° F -Supercritical PC, 3,500 psig / 1,000° F / 1,000° F -Ultra-supercritical PC, 4,500 psig / 1,100 ° F / 1,100 ° F (double reheat)

16. Technical Study Scope, ( Cont’d ) IGCC plant environmental controls: IGCC plant environmental controls: -NOx: Diluents (SCR evaluated) -SO 2 : MDEA (Selexol evaluated) -Particulate: scrubber -Mercury: carbon bed PC plant environmental controls: PC plant environmental controls: -NOx: SCR -SO 2 : wet FGD for bituminous coal (BC) and lignite (LIG) and spray dryer for subbituminous coal (SBC) -Particulate: ESP for BC and LIG, Baghouse for SBC -Mercury: sorbent injection (activated carbon) for SBC

17. Thermal Performance Bituminous Coal * Plant Type IGCC PC Sub- Critical PC Super- Critical PC Ultra Super- Critical Net output, MW 500500500500 Thermal Efficiency, % HHV 41.835.938.342.7 Heat Rate, Btu/kWh 8,1679,5008,9008,000 * Preliminary/draft results.

18. Thermal Performance Subbituminous Coal * Plant Type IGCC PC Sub- Critical PC Super- Critical PC Ultra Super- Critical Net output, MW 500500500500 Thermal Efficiency, % HHV 40.034.837.942.1 Heat Rate, Btu/kWh 8,5209,8009,0008,100 * Preliminary/draft results.

19. Thermal Performance Lignite * Plant Type IGCC PC Sub- Critical PC Super- Critical PC Ultra Super- Critical Net output, MW 500500500500 Thermal Efficiency, % HHV 38.433.135.937.9 Heat Rate, Btu/kWh 8,89710,3009,5009,000 * Preliminary/draft results.

20. Air Emission Comparisons * Pollutant IGCC Project PC Project NOx 0.07 * 0.070.06 SO 2 0.030.090.09 PM/PM 10 0.0110.013/0.0120.018 VOC0.0040.00270.0036 CO0.030.150.15 Hg0.50.661.7 Coal Type Bituminous Bituminous/Sub -bituminous Sub- bituminous * Preliminary/draft results. All emissions in lb/MMBtu, except for Hg, which is in lb/TBtu. NOx for IGCC is based on 15 ppmvd at 15% O 2.

21. Water Use and Solid Waste Comparisons ** Parameter IGCC Plant * PC Plant * Cooling water, gpm 99,500167,300 Makeup water, gpm 141325 Solid waste, tpd 224616 * Each plant is approximately 290 MW in size. ** Preliminary/draft results.

22. CO 2 Capture and Sequestration Potential * Parameter IGCC Plant PC Plant CO 2 capture, % 9190 Plant output derating, % 1429 Heat rate increase, % 16.540 Capital cost increase, % 4773 COE increase, % 3866 * Preliminary/draft results.

23. Main Study Areas Still Under Development Capabilities of air pollution control technologies used in IGCC and PC plants Capabilities of air pollution control technologies used in IGCC and PC plants –Efficiency of sulfur removal processes (IGCC) –Feasibility of SCR (IGCC) –Evolution of Hg removal technologies (PC) –Carbon capture efficiency (IGCC and PC) Comparison of mercury emission control capabilities between IGCC and PC plants Comparison of mercury emission control capabilities between IGCC and PC plants –Sorbent injection (PC) –Activated carbon beds (IGCC) Comparison of water consumption and waste water and solid waste generation rates between IGCC and PC plants Comparison of water consumption and waste water and solid waste generation rates between IGCC and PC plants Potential of CO 2 capture within PC plants Potential of CO 2 capture within PC plants

24. Cost Comparisons Bituminous Coal Applications CostsIGCC Subcritical PC Supercritical PC Ultra Supercritical PC Total Capital Requirement, $/kW 1,6701,3471,4311,529 Operating Cost, $1,000s 27,31027,70029,00030,400 1.All costs are in 2004 dollars. 2.Costs are based on published data. The actual costs may be different due to site specific factors. IGCC costs do not account for possible increases for items such as performance guarantees, warranties and availability. 3.Operating costs include fixed and variable O&M costs.

25. Cost Comparisons Subbituminous Coal Applications CostsIGCC Subcritical PC Supercritical PC Ultra Supercritical PC Total Capital Requirement, $/kW 1,9101,3871,4731,575 Operating Cost, $1,000s 29,70028,30029,60031,100 1.All costs are in 2004 dollars. 2.Costs are based on published data. The actual costs may be different due to site specific factors. IGCC costs do not account for possible increases for items such as performance guarantees, warranties and availability. 3.Operating costs include fixed and variable O&M costs.

26. Cost Comparisons Lignite Applications CostsIGCC Subcritical PC Supercritical PC Ultra Supercritical PC Total Capital Requirement, $/kW 2,3501,4241,5111,617 Operating Cost, $1,000s 34,00029,64030,94032,440 1.All costs are in 2004 dollars. 2.Costs are based on published data. The actual costs may be different due to site specific factors. IGCC costs do not account for possible increases for items such as performance guarantees, warranties and availability. 3.Operating costs include fixed and variable O&M costs.

27. Conclusions EPA has undertaken several initiatives to facilitate and incentivize IGCC technology EPA has undertaken several initiatives to facilitate and incentivize IGCC technology –Environmental Study (release: March 2006) –December 13, 2005 Steve Page Memo – IGCC and BACT –Future guidance on SCR as BACT for IGCC facilities Preliminary IGCC vs. PC Study Results: Preliminary IGCC vs. PC Study Results: –IGCC thermal performance significantly better than current PC technologies –Overall better environmental performance for IGCC –IGCC has potential advantage in capturing and sequestrating CO 2 at lower costs EPA is not trying to pick a technology winner, but trying to ensure that IGCC has a chance to prove itself commercially EPA is not trying to pick a technology winner, but trying to ensure that IGCC has a chance to prove itself commercially

28. For more information contact: Dr. Robert J. Wayland Office of Air Quality Planning & Standards Research Triangle Park, NC (919) 541-1045 Wayland.robertj@epa.gov