1. Howard Herzog / MIT Laboratory for Energy and the Environment The Role of Coal Generation in a World of Greenhouse Gas Regulation NARUC Summer Meeting Howard Herzog MIT July 17, 2007

2. Howard Herzog / MIT Laboratory for Energy and the Environment Coal Today Coal is relatively cheap and abundantCoal is relatively cheap and abundant Criteria pollutant targets (SO x, NO x, particulates, Hg) can be met at reasonable costs through at least 2020 and probably well beyondCriteria pollutant targets (SO x, NO x, particulates, Hg) can be met at reasonable costs through at least 2020 and probably well beyond Over 50% of US electricity demand met by coalOver 50% of US electricity demand met by coal

3. Howard Herzog / MIT Laboratory for Energy and the Environment Coal from the Climate Change Perspective

4. Howard Herzog / MIT Laboratory for Energy and the Environment MIT Coal Study Overview Follow-on to The Future of Nuclear PowerFollow-on to The Future of Nuclear Power  On web at mit.edu/nuclearpower Full report released March 14Full report released March 14  On web at mit.edu/coal AuthorsAuthors  John Deutch, Ernie Moniz (PIs)  Jim Katzer (Executive Director)  Stephen Ansolabehere, Janos Beer, Denny Ellerman, Julio Friedmann, Howard Herzog, Jake Jacoby, Paul Joskow, Lester Richard, Greg McRae, Edward Steinfeld Key question: What actions regarding technology do we take now to impact GHG emissions on a Gigaton scale in 2050?

5. Howard Herzog / MIT Laboratory for Energy and the Environment Carbon Capture and Storage Carbon Capture and Storage (CCS) is the critical enabling technology that would reduce CO 2 emissions significantly while also allowing coal to meet the world’s pressing energy needs.Carbon Capture and Storage (CCS) is the critical enabling technology that would reduce CO 2 emissions significantly while also allowing coal to meet the world’s pressing energy needs.

6. Howard Herzog / MIT Laboratory for Energy and the Environment Global Primary Energy Consumption under High CO 2 Prices Limited Nuclear Generation Case MIT Coal Study Figure 2.4 Initial CO 2 Price of $25/tCO 2 in 2015 with 4%/yr increase

7. Howard Herzog / MIT Laboratory for Energy and the Environment MIT Coal Study Key Takeaways Technology readiness is critical – there are myriad of options to pursueTechnology readiness is critical – there are myriad of options to pursue Don’t preclude options by anointing technology winners prematurelyDon’t preclude options by anointing technology winners prematurely We need to drastically increase R&D to bring CO 2 capture technologies to fruition. There is urgency to move ahead now if we are to reach gigaton (Gt) scale by 2050. Large scale demonstration projects are keyWe need to drastically increase R&D to bring CO 2 capture technologies to fruition. There is urgency to move ahead now if we are to reach gigaton (Gt) scale by 2050. Large scale demonstration projects are key No showstoppers, but moving from the megaton (Mt) scale to the Gt scale is a major challengeNo showstoppers, but moving from the megaton (Mt) scale to the Gt scale is a major challenge

8. Howard Herzog / MIT Laboratory for Energy and the Environment SCPC vs. IGCC Comparison Without captureWithout capture  Efficiencies similar  Both handle criteria pollutant requirements  IGCC costs more  Limited IGCC operating experience (availability) With captureWith capture  Incremental cost less for IGCC  Energy penalty less for IGCC  IGCC more complex  PC more fuel flexible SCPC = Supercritical Pulverized Coal IGCC = Integrated Coal Gasification Combined Cycle

9. Howard Herzog / MIT Laboratory for Energy and the Environment Relative Cost of Electricity PC IGCC Variability in costs can be from plant location (elevation, cooling water temperature, local costs, etc.), coal type, criteria emission levels, capacity factor, etc.

10. Howard Herzog / MIT Laboratory for Energy and the Environment Relative Cost of Electricity PC IGCC Variability in costs can be from plant location (elevation, cooling water temperature, local costs, etc.), coal type, criteria emission levels, capacity factor, etc.

11. Howard Herzog / MIT Laboratory for Energy and the Environment MIT Coal Study Finding #6 It is premature to select one coal conversion technology as the preferred route for cost- effective electricity generation combined with CCS.It is premature to select one coal conversion technology as the preferred route for cost- effective electricity generation combined with CCS.  Variability in location, coal type, etc.  Uncertainty in technological progress

12. Howard Herzog / MIT Laboratory for Energy and the Environment Retrofits MIT Coal Study – “Coal plants will not be cheap to retrofit for CO 2 capture.”MIT Coal Study – “Coal plants will not be cheap to retrofit for CO 2 capture.” Limitations at existing plantsLimitations at existing plants  Space  Storage site access  Efficiency Design of optimal “capture” plant differs from that of a “no capture” plantDesign of optimal “capture” plant differs from that of a “no capture” plant

13. Howard Herzog / MIT Laboratory for Energy and the Environment MIT Coal Study Capture-Ready Other than a few low-cost measures such as providing for extra space on the plant site and considering the potential for geologic CO 2 storage in site selection, the opportunity to reduce the uncertain eventual cost of CCS retrofit by making preparatory investment in plants without CO 2 capture does not look promising.Other than a few low-cost measures such as providing for extra space on the plant site and considering the potential for geologic CO 2 storage in site selection, the opportunity to reduce the uncertain eventual cost of CCS retrofit by making preparatory investment in plants without CO 2 capture does not look promising.

14. Howard Herzog / MIT Laboratory for Energy and the Environment MIT Coal Study Finding #5 Current evidence indicates that it is scientifically feasible to store large quantities of CO 2 in saline aquifersCurrent evidence indicates that it is scientifically feasible to store large quantities of CO 2 in saline aquifers In order to:In order to:  Address outstanding technical issues that need to be resolved to confirm CCS as a major mitigation option  Establish public confidence that large scale sequestration is practical and safe it is urgent to undertake a number of large scale (on the order of 1 Mt/yr injection) experimental projects in reservoirs that are instrumented, monitored, and analyzed to verify the practical reliability and implementation of sequestration. None of the current sequestration projects worldwide meets all of these criteria

15. Howard Herzog / MIT Laboratory for Energy and the Environment Contact Information Howard Herzog Massachusetts Institute of Technology (MIT) Laboratory for Energy and the Environment (LFEE) Room E40-447 Cambridge, MA 02139 Phone: 617-253-0688 E-mail: hjherzog@mit.edu Web Site: sequestration.mit.edu