Electricity Technology in a Carbon-Constrained Future March 15, 2007 PacifiCorp Climate Working Group Bryan Hannegan Vice President - Environment
EPRI Role Basic Research and Development Collaborative Technology Development Integration Application Technology Commercialization National Laboratories Universities EPRI Suppliers Vendors 2
Global Climate Area Overview Value Helps inform policy deliberations Helps guide technology decisions Helps companies understand risks and opportunities; create strategies Plays a role that companies cannot play themselves Inform Public Policy Inform Utility Decisions Why EPRI? World class, in-house analytical and technology capabilities Cutting-edge research Strong role for industry collaboration Viewed as independent, credible, neutral Program 102: Identify components of least-cost strategies. Climate Policy Analyze costs and benefits of major proposals. Programs 102/103: Examine role of technologies. Technology Policy Identify ways to spur innovation. Program 103: Support utility Company analysis of emissions, reduction Policy options, strategies and communication. 2006 Electric Power Research Institute, Inc. All rights reserved. 3
Presentation Objective Provide a factual framework for discussing: I. Generation technologies and investment decisions in a carbon-constrained world II. The technical feasibility of reducing U.S. electric sector CO 2 emissions 4
Example: Coal Generation Levelized Cost of Electricity, $/MWh 100 2010-2015 90 IGCC 80 70 60 50 PC Adjust for CO 2 costs: 0.8 Tons CO 2 /MWh X $50/Ton = +$40/MWh 40 30 Determine LCOE (capital cost, O&M, fuel) Rev. 01/16/07 0 10 20 30 40 50 Cost of CO 2, $/metric ton 5
Comparative Costs in 2010-2015 Levelized Cost of Electricity, $/MWh 100 90 80 70 60 Wind@29% CF NGCC@$6 IGCC Biomass PC 50 40 30 NGCC@$4 Nuclear Rev. 01/16/07 0 10 20 30 40 50 Cost of CO 2, $/metric ton 6
Near-Term Implications New advanced light water reactors have cost advantage, but unlikely to enter operation until after 2015 Absent nuclear, most new base-load generation will utilize fossil technologies (NGCC, PC, and IGCC) without CO 2 capture and storage. IGCC at present 10-20% higher than PC Choice of PC vs. NGCC will depend on natural gas prices Renewables unlikely to extend beyond mandated requirement due to poor comparative economics Very limited opportunity for significant economic CO 2 reduction!!! 7
Key Technology Challenges The U.S. electricity sector will need ALL of the following technology advancements to significantly reduce CO 2 emissions over the coming decades: 1. Smart grids and communications infrastructures to enable end-use efficiency and demand response, distributed generation, and PHEVs. 2. A grid infrastructure with the capacity and reliability to operate with 20-30% intermittent renewables in specific regions. 3. Significant expansion of nuclear energy enabled by continued safe and economic operation of existing nuclear fleet; and a viable strategy for managing spent fuel. 4. Commercial-scale coal-based generation units operating with 90+% CO 2 capture and storage in a variety of geologies. 8
Average Annual Funding Needs (2005-30) (including nuclear closed fuel cycle, CO 2 storage) 9
Comparative Costs in 2020-2025 Levelized Cost of Electricity, $/MWh 100 90 80 Aggressive investments in RD&D can yield a low-cost, low-carbon portfolio of electricity technology options 70 60 NGCC@$6 PC w/capture 50 40 30 Biomass Wind @40% IGCC w/capture Nuclear Rev. 01/16/07 0 10 20 30 40 50 Cost of CO 2, $/metric ton 10
Presentation Objective Provide a factual framework for discussing: I. Generation technologies and investment decisions in a carbon-constrained world II. The technical feasibility of reducing U.S. electric sector CO 2 emissions 11
U.S. Electricity Sector CO 2 Emissions 3500 3000 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 Base case from EIA Annual Energy Outlook 2007 includes some efficiency, new renewables, new nuclear assumes no CO 2 capture or storage due to high costs 500 Using EPRI deployment assumptions, calculate change in CO 2 relative to EIA base case 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 12
Technology Deployment Targets Technology EIA 2007 Base Case EPRI Analysis Target* Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation Carbon Capture and Storage (CCS) Plug-in Hybrid Electric Vehicles (PHEV) No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 None None 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 Widely Available and Deployed After 2020 10% of New Vehicle Sales by 2017; +2%/yr Thereafter Distributed Energy Resources (DER) (including distributed solar) < 0.1% of Base Load in 2030 5% of Base Load in 2030 EPRI analysis targets do not reflect potential regulatory and siting constraints. Additional economic modeling in progress 13
Benefit of Achieving Efficiency Target 3500 3000 9% reduction in base load by 2030 EIA Base Case 2007 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 14
Benefit of Achieving Renewables Target 3500 3000 50 GWe new renewables by 2020; +2 GWe/yr thereafter U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 EIA Base Case 2007 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter 0 DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 1990 1995 2000 2005 2010 2015 2020 2025 2030 15
Benefit of Achieving Nuclear Generation Target 3500 3000 24 GWe new nuclear by 2020; +4 GWe/yr thereafter EIA Base Case 2007 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 16
Benefit of Achieving Advanced Coal Generation Target 3500 3000 46% efficiency by 2020, 49% efficiency by 2030 EIA Base Case 2007 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 17
Benefit of Achieving the CCS Target 3500 3000 After 2020, all new coal plants capture and store 90% of their CO 2 emissions U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 EIA Base Case 2007 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 18
Benefit of Achieving PHEV and DER Targets 3500 3000 5% shift to DER from base load in 2030 PHEV sales = 10% by 2017; 30% by 2027 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 EIA Base Case 2007 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 19
CO 2 Reductions Technical Potential* 3500 3000 EIA Base Case 2007 U.S. Electric Sector CO 2 Emissions (million metric tons) 2500 2000 1500 1000 500 Technology EIA 2007 Reference Target Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr Renewables 30 GWe by 2030 70 GWe by 2030 Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030 Advanced Coal Generation No Existing Plant Upgrades 40% New Plant Efficiency by 2020 2030 150 GWe Plant Upgrades 46% New Plant Efficiency by 2020; 49% in 2030 CCS None Widely Deployed After 2020 PHEV None 10% of New Vehicle Sales by 2017; +2%/yr Thereafter DER < 0.1% of Base Load in 2030 5% of Base Load in 2030 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 * Achieving all targets is very aggressive, but potentially feasible. 20
Total U.S. Electricity Generation: 2005 EIA Conventional Hydropower 6.7% 3826 TWh Non-Hydro Renewables 1.6% Nuclear Power 20.1% Coal w/o CCS 51.3% Natural Gas 17.4% Other Fossil 3.0% 21
Total U.S. Electricity Generation: 2030 EIA Base Case 5406 TWh Conventional Hydropower 5.6% Non-Hydro Renewables 3.0% Nuclear Power 16.6% Natural Gas 13.5% Coal w/o CCS 59.6% Other Fossil 1.7% 22
Total U.S. Electricity Generation: 2030 Advanced Technology Targets 5401 TWh Conventional Hydropower 4.9% Non-Hydro Renewables 6.7% Coal w/o CCS 39.0% Nuclear Power 25.5% Natural Gas 8.7% Other Fossil 0.6% 23 Coal with CCS 14.6%
Key Technology Challenges The U.S. electricity sector will need ALL of the following technology advancements to significantly reduce CO 2 emissions over the coming decades: 1. Smart grids and communications infrastructures to enable end-use efficiency and demand response, distributed generation, and PHEVs. 2. A grid infrastructure with the capacity and reliability to operate with 20-30% intermittent renewables in specific regions. 3. Significant expansion of nuclear energy enabled by continued safe and economic operation of existing nuclear fleet; and a viable strategy for managing spent fuel. 4. Commercial-scale coal-based generation units operating with 90+% CO 2 capture and storage in a variety of geologies. 24