Transcript CEO Report Executive Session

FutureGen
Project
Update
Presentation to Washington Coal Club
Mike Mudd, CEO
April 11, 2007
Outline
• Energy Trends
• Energy Technology
– Role in a Climate Change Strategy
– Coal-fueled Power and Sequestration
• FutureGen
–
–
–
–
–
Concept
Partners
Federal Role
Technology
Progress
• Summary
Energy and economic growth are
inextricably intertwined
More People Living Longer and Better Lives
275
GDP +149%
Indexed to 1974 (100)
250
225
200
Electricity Use +111%
175
150
Per Capita Income +80%
125
Coal Use +77%
100
75
50
1974
72
1980
73.9
1985
1990
1995
2000
2004
74.7
Life Expectancy
75.1
75.7
76.7
77.6
Source: Energy Information Administration Annual Energy Review 2005; U.S. Department of Commerce, Bureau of Economic
Analysis.
Billion kWhs
Coal has been – and will continue
to be a critical part of USA’s energy
supply
Energy Information Administration, Annual Energy Outlook 2007
Global energy system projected
to grow at an extraordinary pace
• A growing global energy
system
• Fossil fuels account for
85% of the increase
• Developing world accounts
for two thirds of the
increase in global coal use
– Ever-increasing CO2
concentrations in the
atmosphere
History and Reference Case
1600
History
.
Global Primary Energy 1850-2100 (Exajoules)
– Sustained economic growth
– By 2025, world primary
energy consumption
increases 60%
World primary energy consumption
Business As Usual Case
Future
1400
Renew
Nuc
Biomass
1200
1000
Coal
800
600
Gas
400
200
0
1850
Oil
1900
1950
2000
2050
2100
Serious climate strategies
require major advances in technology
• Overwhelming evidence that:
– The scale of the global energy system is immense and growing
– Energy conversation is an incredibly important tool, which society must use,
but it is well-proven that it is physically impossible to “conserve” our way to
a complete solution
– Fossil fuels are affordable, abundant, and, on a global basis, will be used
– Advanced technology can substantially reduce the cost of managing CO2
emissions
– None of the commonly discussed technologies--renewables, biomass,
nuclear, fossil with sequestration, or others can address the challenge
alone. All options are required at a megascale
– RD&D are required to reduce the cost and improve the performance of new
technologies
– The next ten years is a critical window in which to prove advanced
technologies
Coal-fueled power coupled with
sequestration offers great promise
• Carbon capture and sequestration recognized as a key
part of the solution
– 2005 IPCC technical report concluded it is highly probably that, on a
global basis, there are adequate geologic formations to store centuries
worth of CO2
– Leading environmental groups have been strongly supportive of the
technology
– National Energy Policy Commission recommended large-scale
demonstrations
• However, it must be proven:
– at a commercial-scale
– in multiple places around the globe
– immediately
FutureGen
Right Technology at the Right Time
•
World’s first, near-zero emission coalfueled power plant
•
More than one million tons of CO2
captured and sequestered annually in
a deep saline geologic formation
•
“Living laboratory” to test and validate
cutting-edge power, sequestration,
and monitoring technologies
•
Global public-private partnership
•
Stakeholder involvement
FutureGen
Right Partners
• Industry
– Twelve leading companies with operations on six continents
– Investing $250M* in project with no expectation of financial return
• Governments
– United States, China, India, South Korea, and Japan
• Uniquely positioned to build global acceptance of near-zero
emission coal technology
*1Q 2004$
FutureGen
Importance of the Government Role
• Public benefit project
– Could help fundamentally transform the global energy system and
address the public’s climate change concerns
– Will lay the technical foundation for monitoring CO2 sequestration, its
long term effects, and permanency
– Industry’s participation is on a non-profit basis
• Research on a first-of-a-kind technology
– No IGCC plants currently with carbon capture and sequestration in the
world.
– Widely recognized that governments have an important cost-sharing
role in pre-competitive research
• Global applicability of the technology is critical
– Governments are uniquely positioned to build international partnerships
that will strengthen acceptance of near-zero emission coal technology
FutureGen Technology
Advances IGCC Technology
•
Designed to gasify eastern and western
U.S. coals, and test other coals, which
expands the global applicability of
environmentally-friendly IGCC technology
•
Advances gasification, hydrogen turbine,
and other clean-coal technologies
•
Integrates CO2 capture at a commerciallyrelevant scale into a IGCC power plant
•
Addresses power plant operation with CO2
capture, transport, and sequestration
integration
FutureGen Technology
Advances Sequestration Technology
•
Focused on deep geologic formations
which are globally available
•
Extensive modeling and monitoring
program planned to verify the safety
and permanence of CO2 storage
11,000 Gigatons of potentially
available CO2 storage
capacity
FutureGen Progress
Fast Tracked Schedule
• DOE and the Alliance have met every major milestone over
the past 14 months.
• Project is on-schedule for a 2012 on-line date
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
FutureGen Summary Schedule
Siting, NEPA, & Permitting
Project
Development
& Initial
Conceptual
Design
Design Phase 2
DOE/Alliance
Limited Scope
Cooperative
Agreement
Design
Phase 3
Facilities Construction
DOE/Alliance
Cooperative
Agreement
Plant
Start-up
&
Testing
NEPA ROD, July 2007
Initial Full-Scale Plant Operations
Final Site Selected
September 2007
BP0-14 months
BP1-16 months
BP2-10 months
Continuing Plant Operations
Site Monitoring After Initial
Operations
BP3-44 months
BP4-36 months
BP5-24 months
FutureGen
Site Selection
12 Sites in 7 States Proposed
4 Sites in 2 States on
Candidate List
Candidate Sites
FutureGen Progress
Site Selection
• First-of-a-kind siting methodology developed
• Can be extended to future commercial near-zero emission
power plant projects around the world
• Final site to be selected by September
Mattoon, IL
Tuscola, IL
Brazos, TX
Odessa, TX
FutureGen Progress
Conceptual Design
• Multiple alternative power plant design options evaluated
• Facility concept that is fuel-flexible developed
• Conceptual engineering designs and costs estimates on three power
plant configurations prepared
• Engineering Construction Manager on board
• Open competition to purchase major equipment currently being
developed
FutureGen Progress
Environmental Impact Statement
• Three volume, 2200-page analysis of the
potential environmental impacts
– Summary
– Volume I – Introduction, Alternatives, Summary
of Conclusions
– Volume II – Affected environment and
environmental consequences at each site
FutureGen
Draft Environmental
Impact Statement
• Draft EIS concludes no significant
adverse impacts
• Public hearings and comment during April
May
March 2007
FutureGen Progress
Independent Cost Estimate
•
Selected Power Plant Material Escalation vs.
General Inflation
Fabricated, Structural,
& Misc Steel
60
50
Steel Pipe, Tube and
Fittings
40
Copper and Brass Mill
Shapes
30
20
GDP
10
0
-10
-20
2000
2001
2002
2003
2004
•
•
•
70
% Change Between 2000 and 2005
•
Inflation reflects the normal up-anddown fluctuations in materials, labor,
and services over time.
Controlled by market forces
(supply/demand), not the Alliance or
DOE
Power plant inflation has been
greater than general inflation.
2005
Alloys, Steel, Concrete, He
Wall, Refinery Work, etc.
•
Engineers, Suppliers, Fab
Shop Space, Specialty Tra
•
China, International Suppl
Definition #2: Scope Growth
Definition #1: Inflation
•
•
Would include project mission
expansion, and additional
project complexity, or additional
equipment.
Discretionary decision; could be
justified if something of value is
added to the project and only if
funding is available by both the
Alliance and the DOE.
Alliance/DOE have control over
scope growth.
FutureGen Progress
Independent Cost Estimate
Construction Cost Indices
(Source: Chemical Engineering Magazine, November 2006)
540
1,400
Chemical Engineering Plant Cost Index
520
1,350
Marshall & Swift Equipment Cost Index
500
1,300
480
1,250
460
1,200
440
1,150
420
1,100
400
1,050
380
1,000
360
Jun-98
Jun-99
Jun-00
Jun-01
Jun-02
Jun-03
Jun-04
Jun-05
Jun-06
•
•
•
Plant Construction Costs Escalating
950
Jun-07
Marshall & Swift Equipment Cost Index
•
Inflation reflects the normal up-anddown fluctuations in materials, labor,
and services over time.
Controlled by market forces
(supply/demand), not the Alliance or
DOE
Power plant inflation has been
greater than general inflation.
Chemical Engineering Plant Cost Index
•
Alloys, Steel, Concrete, He
Wall, Refinery Work, etc.
•
Engineers, Suppliers, Fab
Shop Space, Specialty Tra
•
China, International Suppl
Definition #2: Scope Growth
Definition #1: Inflation
•
•
Would include project mission
expansion, and additional
project complexity, or additional
equipment.
Discretionary decision; could be
justified if something of value is
added to the project and only if
funding is available by both the
Alliance and the DOE.
Alliance/DOE have control over
scope growth.
FutureGen Progress
Project Cost
DOE 2004
Estimate
Project Cost
(1Q 2004$)
Scope Growth
(1Q 2004$)
Inflation Multiplier
$950M
$954M
--
Zero
--
1.56
Project Cost
$1,484M
(future-year dollars thru 2017)
DOE/FG Cost Share %
DOE/FG Cost Share $M
Alliance 2006
Estimate
74/26
$900/$250
74/26
$1,100/$384
FutureGen
Summary
• Supports a technology-based climate change strategy
– Mitigates the financial risks of carbon dioxide emissions
• Validates the cost and performance of an integrated
near-zero emission coal-fueled power plant
– Advances IGCC technology
– Advances carbon capture, sequestration, and hydrogen-production technologies
– Sets groundwork for CO2 sequestration siting and licensing
• Creates the technical basis to retain coal in U.S. and
global energy mix with a long-term goal of zero
emissions.
• Enables the public and private sector to share the cost
and risk of advanced technology demonstration.
– Platform for emerging technology demonstration.
Contact Information:
Michael J. Mudd
Chief Executive Officer
FutureGen Alliance
[email protected]
(614) 716-1585
www.FutureGenAlliance.org