Combined Igcc Sustainability - Gasification

Power Generation Industry Risk Management Forum October 24 – 26, 2007 Doral Resort and Spa Miami, Florida, USA

2007 Power Gen Industr y Risk Manag ement

Integrated Gasification Combined Cycle Power Generation Technology Sustainability

Forum Opportunities for Success Organizational & Policy Issues

2007 Power Gen Industr y Risk Manag ement Forum

IGCC = Sustainable Carlo Wolters Plant Manager IGCC Buggenum Power Plant Nuon

Working Draft

Last Modified 10/18/2006 4:47:40 PM W. Europe Standard Time Printed 16-10-2006 13:34:41 W. Europe Standard Time

CONFIDENTIAL

IGCC = Sustainable

Carlo Wolters, Document Plant Manager, Buggenum IGCC Plant Date October 26th FM Global Miami FL

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Unit of measure

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What is IGCC? Unit of measure Coal preparation

The Process Gasification (syngas production)

Syngas cleaning solids, sulphur

Syngas treatment

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Air Separation Fuel feeding

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Rest Products

Power production

Unit of measure

Gasification: Status electricity production

Project/ Location

GE 7 F

Nuon Netherlands

Siemens V 94.2

ELCOGAS Puertollano Spain

Siemens V 94.3

Footnote Bron

E gas

Start-Up Date

262

Oct 1995

250

Sept 1996

253

Jan 1994

310

Dec 1997

(Now Conoco Phillips)

Tampa Electric, FL

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GE 7 FA

Net Output MW

Texaco (Now GE Energy)

Shell (Now offered jointly with Krupp Uhde as Shell)

Prenflo (Now joint with Shell)

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Wabash River, IN

Combustion Gasification Turbine Technology

What is sustainability? Unit of measure • environment friendly

• Relatively low (slide)

• Green house gas

• CO2 capture ready

• Rest products

• Useable products

• Fuel flexibility

• Multi-fuel concept

• Scenario robust

• Solid business case

• Plant utilization

• Continuous improvement

• Costs

• Competitive

• socially accepted • External Safety • Environment • Reputation

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• economical

Footnote Bron

• socially accepted • Safety management

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• Emissions

• economical

*

• environment friendly

What is sustainability?

Emissions

Unit of measure

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Potential reduction to approx 30% when CO2 capture

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Rest products What is sustainability? Unit of measure

What is sustainability?

Fuel flexibility

Unit of measure Specs Moisture S Cl Ash

< 15% 0.4-1.5% 0-0.15% 7-15%

coal secondary fuels biomass

usable by products

energy

emissions

green energy

waste Salt 350 ton/year Sludge 50 ton/year

fluxes * Bron:

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Al2O3 / SiO2 0.3-0.55 Fe2O3 3-15%Ash Volatiles 15-35%

Wood Agro residues Sewage sludge

What is sustainability? Unit of measure • Scenario robust: Regulatory Market Technology

• Prices forecast 2008

2009

2010

Coal €/MWh

22

22

21

NGas €/MWh

75

77

77

Power €/MWh

59

59

57

• Availability improvement Buggenum

• Investment, NPV • Investment (cost $/kW, eff HHV)

IGCC USC * Bron:

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w/o ccs

eff

w ccs

Eff

1977 1549

41,1 39,1

2668 2895

32,0 27,2

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• Plant utilization Operating hoursMaximum output Reducing overhaul

Economical

What is sustainability?

Scenario Robust

Unit of measure Profitability of a Concept based on IGCC in a Number of Scenario’s (“worlds”) Solid business case IGCC vs. alternatives

CCGT USC

* Bron:

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World 9

World 8

World 7

World 6

World 5

World 4

World 3

World 2

World 1

NPV (mln €)

USC+CCGT

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Profitability of IGCC in different worlds (worlds can be e.g. CO2 free, monopolistic, limited gas availability, micro-generation, etc) is guaranteed by the versatility of IGCC:

IGCC

What is sustainability?

Socially accepted

Unit of measure Worse case events can harm (external) safety, environment, reputation • Explosion • Operating outside permits • Wrong fuel

How to minimize risk • Awareness • Safety management • Preventative actions

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Footnote Bron

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• Poisoning

UnitConclusion: of measure

IGCC = sustainable!

Socially accepted Profitable

And this leads to ….. * Bron:

Footnote Bron

  

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Environment

Today's Plan of the future: Nuon Magnum Unit of measure

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2007 Power Gen Industr y Risk Manag ement

Integrated Gasification Combined Cycle Power Generation Technology Sustainability

Forum Opportunities for Success Organizational & Policy Issues

IGCC Opportunities for Success •Integrated Technology •Risk Management

2007 Risk Management

IGCC Opportunities for Success •Integrated Technology •Risk Management

2007 Risk Management

IGCC Integrated Technology •Benefits •Environmental •Economic •Technological •National Security

2007 Risk Management

IGCC Integrated Technology “many electricity producers in the industrial world recognize that environmental concerns will at some point force them to implement CCS if they are to continue to employ coal..”

SCIENTIFIC AMERICAN September 2006, p. 73

Studies suggest that for comparable levels of installed capacity the largest cost reductions regarding CCS will be seen for IGCC plants.

2007 Risk Management

IGCC Integrated Technology •Challenges •Higher capital costs than other power plants •Doubts about plant viability without subsidies •Increased up-front development costs/ risks •Low plant availability in the early stages

2007 Risk Management

IGCC Integrated Technology •Challenges (continued) •The uncertainty of environmental regulations •Past technological failures of IGCC •Availability of project finance •Lack of overall performance guarantees •Uncertainty of tax credits.

2007 Risk Management

IGCC Integrated Technology •Challenges Classification •Legal/Regulatory •Environmental •Financial •Economic •Cultural •Technological.

2007 Risk Management

IGCC Opportunities for Success •Integrated Technology •Risk Management

2007 Risk Management

IGCC Risk Management •Integrated Technology Design and Construction •Special Hazards •Organizational Structure Culture •Carbon Sequestration Policy Issues

2007 Risk Management

IGCC Risk Management •Integrated Technology Design and Construction •Special Hazards •Organizational Structure Culture •Carbon Sequestration Policy Issues

2007 Risk Management

2007 Risk Management

2007 Risk Management

2007 Risk Management

2007 Risk Management

IGCC Organizational and Policy Issues •Integrated Technology Design and Construction •Special Hazards •Organizational Structure Culture •Carbon Sequestration Policy Issues

2007 Risk Management

IGCC Organizational Structure Issues •Organizational Culture •Operator Skills •Process Safety Management •Labor Shortage

2007 Risk Management

IGCC Organizational and Policy Issues •Integrated Technology Design and Construction •Special Hazards •Organizational Structure Issues •Carbon Sequestration Policy Issues

2007 Risk Management

Carbon Sequestration Policy Issues

2007 Risk Management

Key Issues • CO2 Pipeline Requirements for CCS • Economic Regulation • Commodity vs. Pollutant Classification • Pipeline Costs • CO2 Pipeline Safety • Other Issues.

2007 Risk Management

USA CO2 Pipeline Network

2007 Risk Management

Source: U.S. Dept. of Transportation, National Pipeline Mapping System (June 2005). https://www.npms.phmsa.dot.gov]

CO2 Pipeline Requirements for CCS Prospective CCS areas in sedimentary basins: saline formations, oil or gas fields, coal beds

2007 Risk Management

Power Generation Industry Risk Management Forum October 24 – 26, 2007 Doral Resort and Spa Miami, Florida, USA

Back up Slides

2007 Risk Management

2007 Power Gen Industr y Risk Manag ement

Economic Regulation

•Rate Regulation –CO2 a valuable commercial commodity (e.g., for EOR) or an industrial pollutant for disposal? –Who has regulatory authority over CO2 pipelines –How and when are rates established?

Forum

2007 Power Gen Industr y Risk Manag ement Forum

Economic Regulation •CO2 Pipeline Siting Authority –Federal or State Jurisdiction –Easement rights, rights of way –Public opposition

“In sum, it seems probable that the siting of critical infrastructure will continue to present a major challenge for policymakers.” Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues April 19, 2007. Paul W. Parfomak, et al

2007 Power Is CO2 a Commodity or a Pollutant? Gen Industr y Risk Manag ement •EPA classification Forum

•EOR Commodity

2007 Power Gen Industr y Risk Manag ement

Pipeline Costs

Forum

U.S. Prices for Large-Diameter Steel Pipe

2007 Power Gen Industr y Risk Manag ement Forum

Costs for onshore pipelines and offshore pipelines as a function of the CO2 mass flow rate

2007 Power Gen Industr y Risk Manag ement Forum

Costs for onshore pipelines, offshore pipelines and ship transport

2007 Power Gen Industr y Risk Manag ement Forum

CO2 Pipeline Safety

•CO2 Properties •Loss Scenarios •Exposures •Criminal & Civil Liabilities

Cap-&-Trade and Carbon Tax Legislation

2007 Power Gen Industr y Risk •Carbon Trade Manag ement •Carbon Tax Forum

•Clean Coal Technologies •Carbon Sequestration

2007 Power Gen Industr y Risk Manag ement Forum

Cap-&-Trade and Carbon Tax Legislation •Clean Air/Climate Change Act of 2007 (S.1168) •Clean Air Planning Act of 2007 (S. 1177) •Climate Stewardship Innovation Act 2007 (S. 280, H.R.620) •Electric Utility Cap and Trade Act of 2007 (S.317) •Global Warming Pollution Reduction Act (S.309) •Global Warming Reduction Act (S. 485) •Low Carbon Economy Act (S.1766) •Safe Climate Act of 2007 (H.R.1590) •Save Our Climate Act of 2007 (H.R. 2069)