highlights from recent epri climate-related work ca council on science & technology october 2006...

Highlights from Recent EPRI Climate-Related Work

CA Council on Science & TechnologyOctober 2006

Bryan HanneganDirector, Environment

2© 2006 Electric Power Research Institute, Inc. All rights reserved. September 2006

About EPRI

• EPRI is an independent non-profit collaborative research and development organization

– Funded by 1000 energy companies in 40 countries

– Includes IOUs, munis, co-ops

– Also includes gov’t organizations that fund public benefit R&D (e.g. CEC)

• Climate research is a priority for EPRI

– Inform climate policy discussions

– Reduce costs through technology R&D

– Support utility investment decisions


Topics for Today

• Generation Options in a Carbon Constrained World

• Impacts of CO2 Prices on Existing & New Generation

• Advancing Energy Efficiency

• Plug-In Hybrid Vehicle Potential

• Analysis of CA Climate Legislation

Generation Options in a Carbon Constrained World


Generation Options Framework

• Levelized cost of electricity

– Standard EPRI methodology

– Constant 2006 $ costs

– Lines are mean values from a range of studies

• Two key uncertainties

– Future “cost” of CO2

– Future price of natural gas

• Two timeframes

– 2010-2015 time-period

– 2020-2025 time-period


Comparative Costs in 2010-2015

30

40

50

60

70

80

90

100

0 10 20 30 40 50Cost of CO2, $/metric ton

Levelized Cost of Electricity, $/MWh

Wind@29% CF

Nuclear

PC

IGCC

Biomass

NGCC@$6


Take-Aways for 2010-2015 Time Period

• Nuclear is clearly lowest-cost, but unlikely before 2015 due to significant licensing & construction time.

• Next most economic are fossil-fueled technologies (NGCC, PC, and IGCC) w/o CO2 capture and storage– Will comprise dispatchable base-load generation prior to 2015

– Natural gas will re-emerge only if prices ~$4/MMBtu

• New advanced coal plants with CO2 capture and storage will probably not occur until after 2015.

• Carbon prices must be > $30/tCO2 for wind, biomass


• 2 x 750 MW Advanced PC Plant……………….2009

• 600 MW Base Load IGCC Plant…………..……2010

• First of TXU’s 11 New Plants Online (PC).…....2010

• Carson Project Pet Coke Gasification…….……2011

• FutureGen “Living Laboratory” Operating….….2013

• Advanced Coal with Capture Deployment....2018+

201820102009 20132006

Long Technology Development Cycle…With Uncertainty

2011

Advanced Coal Technology Time Line


What’s Possible: 2020-2025 Horizon

Technology Advances in Efficiency

Cost Reductions through Design Improvements

CO2 Capture and Storage - Development and Deployment

Biomass Gasification Technology

Energy Storage Capability


Comparative Costs in 2020-2025

30

40

50

60

70

80

90

100

0 10 20 30 40 50Cost of CO2, $/metric ton

Levelized Cost of Electricity, $/MWh

Nuclear

Wind

Biomass

NGCC@$6

An Extraordinary Opportunityto Develop a Low-Carbon Portfolio

IGCC w/capPC w/cap

Impact of CO2 Prices on Existing and New Generation


CO2 Value Impacts Market Price and Generator Net Revenue for Each Hour of Dispatch

CO2 @ $0

$50

$25

$5$0

$10

$20

$30

$40

$50

$60

Nuclear Coal Natural Gas

Generation

Dis

pa

tch

Pri

ce

Market Price

Ne

t R

ev

en

ue

Net

Rev

enu

e

Sets Price

CO2 @ $20

$50

$25

$5

CO2Cost

CO2Cost

$0

$10

$20

$30

$40

$50

$60

Nuclear Coal Natural Gas

Generation

Dis

pa

tch

Pri

ce

Market Price

Ne

t R

ev

en

ue

Net

R

even

ue

Sets Price


Position in Stack Determines Each Generator’s Net Revenue for the Year – $/kW-year

Net Revenue – CO2 @ $0 ($/ton) & Gas @ $8.24 ($/MMBtu)

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

Generation Stack Position

Ne

t R

ev

e n

ue

($

/kW

)

Nuc-Hydro GenCoalNat Gas

Oil GenOther


Coal Land Represented by ECAR + MAIN


Coal Land – CO2 @ $0/ton


IGCCUSC PC

IGCC w CCSUSC PC w CCS

NGCC

Nuclear

Coal/9.8Coal/9.6

Coal/12.3

$0

$100

$200

$300

$400

$500

$600

$700

$800

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Regional Supply (MW)

Ne

t R

ev

en

ue

($

/kW

)

IGCC/8.6USC PC/8.7IGCC w CCS/11.3USC PC w CCS/11.4NGCC/7Nuclear/11.1Coal/9.8Coal/9.6Coal/12.3Net Rev ($/kW-derated)


Coal Land – CO2 @ $50/ton


IGCCUSC PC

IGCC w CCSUSC PC w CCS

NGCC

Nuclear

Coal/9.8Coal/9.6

Coal/12.3

$0

$100

$200

$300

$400

$500

$600

$700

$800

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Regional Supply (MW)

Ne

t R

ev

en

ue

($

/kW

)

IGCC/8.6USC PC/8.7IGCC w CCS/11.3USC PC w CCS/11.4NGCC/7Nuclear/11.1Coal/9.8Coal/9.6Coal/12.3Net Rev ($/kW-derated)


Net Revenues for Existing Units

ECAR-MAIN Generator Net Revenue as a Function of CO2 Value – Gas @ $8.24 ($/MMBtu)

$0

$100

$200

$300

$400

$500

$600

$700

$800

$0 $10 $20 $30 $40 $50 $60

CO2 Value ($/ton)

Ne

t R

ev

en

ue

s (

$/k

W-y

ea

r)

Nuc/11.1Coal/9.8Coal/9.6Coal/12.3


Net Revenues for Advanced Generation Units

ECAR-MAIN Generator Net Revenue as a Function of CO2 Value – Gas @ $8.24 ($/MMBtu)

$0

$100

$200

$300

$400

$500

$600

$700

$800

$0 $10 $20 $30 $40 $50 $60

CO2 Value ($/ton)

Net

Rev

enu

es (

$/kW

-yea

r)

IGCC/8.6

USC PC/8.7

IGCC w CCS/11.3

USC PC w CCS/11.4

NGCC/7


Key Insights

1. Higher production costs from CO2 value does not imply lower net revenues for some units due to feedback loop from plant costs to market prices

2. Risk exposure to coal generation highly dependent on

• Regional generation mix

• Gas price level

3. Older coal plants more exposed to CO2 risk than newer plants, a factor for environmental retrofit decisions

Advancing Energy Efficiency

21© 2006 Electric Power Research Institute, Inc. All rights reserved.

Strategies for Efficient Use of Electricity

Three Interrelated Strategies

• Energy Efficiency (EE)

• Demand Response (DR)

• Dynamic Systems (DS)

Implemented through anElectricity Efficiency Infrastructure

that allows “prices to devices”

EE

DSDR


Dynamic Systems: A Critical Need

EfficientBuildingSystems

UtilityCommunications

DynamicSystemsControl

DataManagement

DistributionOperations

DistributedGeneration& Storage

Plug-In Hybrids

SmartEnd-UseDevices

ControlInterface

AdvancedMetering

Consumer Portal& Building EMS

Internet Renewables

PV


Creating an Energy Efficiency Initiative

• Established Electricity Efficiency Technology Ad-Hoc Committee of EPRI Board

• Conducting Regional Workshops to obtain additional input from utilities and other stakeholders

– Oct 31 – Southern California (Hosted by Lynda Ziegler of SCE; contact Ellen Petrill [email protected] for details)

• Identify and finalize new elements of EPRI Electricity Efficiency Technology Initiative by end of year

• Coordinate with the Edison Electric Institute and other industry organizations

Plug-In Hybrid Electric Vehicle Potential


Plug-In Hybrid Greenhouse Gas Emissions

Fullsize SUV

Midsize SUV

Midsize Sedan

Compact Sedan

0

100

200

300

400

500

600

700

800

Fue

l Cyc

le C

O2

Em

issi

ons

(g

mi-1

)

Conventional Vehicle Conventional Power Assist Hybrid

Plug-in Hybrid, 20 mile EV range Plug-in Hybrid, 60 mile EV range


Source: EPRI

0

50

100

150

200

250

300

350

400

450

1000 900 800 700 600 500 400 300 200 100 0

VehicleTailpipe

UpstreamGasoline

UpstreamElectricity

Conventional Midsize Sedan Hybrid (HEV 0) Midsize Sedan

New Coal

National Average Mid-Year’05

Southern Illinois & Nearby States Today CCNG California Off-Peak Today & US in 2050

California 24-hour average today

California in 2050

100% Wind, Solar, HydroNuclear, Geothermal

0

50

100

150

200

250

300

350

400

450

1000 900 800 700 600 500 400 300 200 100 0

VehicleTailpipe

UpstreamGasoline

UpstreamElectricity

Conventional Midsize Sedan Hybrid (HEV 0) Midsize Sedan

New Coal

National Average Mid-Year’05

Southern Illinois & Nearby States Today CCNG California Off-Peak Today & US in 2050

California 24-hour average today

California in 2050

100% Wind, Solar, HydroNuclear, Geothermal

CO2 Offsets Increase with Cleaner Electricity

Electricity CO2 emissions in g CO2 kWh-`

Tota

l vehic

le C

O2 e

mis

sions

in g

CO

2 m

i-1


Plug-in Hybrid Electric Vehicle Progress

•EPRI/SCE Advanced Battery Test Program•EPRI/DOE Product Development•Johnson Control/Saft Alignment•Technology Innovation - Nanotechnololgy

•Automotive Analysis in Process•Argonne National Lab

•Environmental Value Analysis•Environmental Base Program

•PHEV Sprinter Data Collection•Eaton/EPRI Trouble Truck

Batteries

Auto

Environment

Data


HEV Technology Timeline

2000 2005 2010 2015 2020

HEV Market Introduction

HEV Sales Accelerate

EPRI PHEV Sprinter with

DaimlerChrysler

Li Ion Batteries Enter HEV Market

PHEV Sales Accelerate

Widespread PHEV Adoption

EPRI PHEV Utility Trouble Truck with

Eaton/FordInitial EPRI PHEV Study

DOE Begins PHEV

Program

EPRI/Utility PHEV Fleet

Demonstrations

Costs Decrease Most

OEMs Have PHEV in Lineup

30-mile EV range

Customer Market Pull:Increased EV Range

Greater EV Performance

40-mile EV Range

Plug-in Night Time Charge 24 Hr. Grid Access Auto-Docking

Time of Use Charge & Automatic Billing Infrastructure

First PHEVs: 7 to 20-mile EV

Range Li Ion Battery

Initial PHEV Market Intro

Overview of California Climate Policy Activity


California Climate Policy Activity

Government policy actions

• Governor's Executive Order sets GHG mitigation targets

• State Senate and Governor announce deal for comprehensive cap on GHG emissions (AB 32)

• New long term (> 5 years) base-load requires performance standard equal to a CCGT (SB 1368)

• 33% Renewable Portfolio Standard by 2020 (PUC)

EPRI California climate policy research

• Analysis of CA GHG mitigation targets

• Analysis of 3 existing economic studies


California GHG Legislation—Key Points

Role of the Air Resources Board

• Rules, procedures, regulations, etc. unclear at present

• “achieve maximum technologically feasible and cost-effective GHG reductions.”

• Authorizes “market-based compliance mechanism(s)”

• Mandatory reporting of GHG emission sources

Timing

• 6/30/2007 ARB to publish list of “early actions…”

• By 1/1/2011 ARB shall adopt regulations

• Become effective 1/1/2012


California GHG Legislation—Key Points

Economic impact unclear at present• State has yet to work out details of implementation • Supporters say it won’t harm business

Provision for “safety valve” • Governor has authority to delay emission-cap by up to

one year in an emergency

New Energy Investments Face Uncertainty• Any project will face undefined restrictions/costs as

reductions, measures and limits not known until 2011• Financing these projects may be very difficult


EPRI Examining California GHG Policies

Independent analysis of economic costs and benefits

• Funded by Southern California Edison

• Project duration-- January 2006--June 2007

• EPRI has provided status reports to SCE and other interested organizations

• Project results will be provided to the public

• Advisory Committee provides peer-review

• Report will be released November 2006


EPRI Evaluation of Previous Economic Studies

Previous research indicated “benefits” for economy

• Economic analysis by the Climate Action Team

• Independent economic analysis by Center for Clean Air Policy (CCAP)

• Third report by UC Berkeley Climate Change Center

All three studies based on “bottom-up” analysis of many separate policy measures

• “Bottom-up” analyses displays systematic optimistic bias about the economic costs

• Undergoing peer-review and should be widely available in near future


California climate activities important for rest of country• May lead to other state/regional/national proposals• “Getting rules right” in California will be helpful for

subsequent proposals in other states or nationally

Remember deregulation …• Issues are complex; unintended consequences costly• Any proposed government actions (ARB) should be

carefully examined prior to implementation:- What are the impacts on electric system? economy?- How do you constrain electricity imports?- Can technology meet the pace of regulations?

Closing Thoughts


Carbon Prices DO Affect Electricity Rates!

highlights from recent epri climate-related work ca council on science & technology october 2006...

Documents

biomass slide

ton slide

year slide

new generation slide

environment slide

main slide

timeperiod slide

coal generation