The Future of Coal Lou Hrkman “Carbon Free Fossil Energy”

Office of Clean Coal and Carbon Management energy.gov/fe

Office of Fossil Energy

The Future of Coal“Carbon Free Fossil Energy”

Lou Hrkman

Deputy Assistant SecretaryClean Coal and Carbon ManagementVCEA, SSEB, and VCCER 40th Annual Conference and Expo

May 20th, 2019 Kingsport TN

2Office of Clean Coal and Carbon Management

2 | Office of Fossil Energy

• Boosting Domestic Energy Production

• Grid Reliability and Resiliency

• Job Creation

• Energy Security

Administration Energy Priorities

“All of The Above Strategy”



FOSSIL ENERGY is critical in all sectors of the US EconomyCCUS is A platform technology for many industrial sectors

RESIDENTIAL & COMMERCIAL

11%

TRANSPORTATION29%

POWER38%

INDUSTRIAL22%

RENEWABLE 11%

NUCLEAR 9%

COAL14%

OIL37%

NATURAL GAS29%

92% Fossil Energy (DAC)

88% Fossil Energy (CCUS)

95% Fossil Energy (CCUS/DAC)

60% Fossil Energy (CCUS)

80% Fossil Energy

EIA, Annual Energy Outlook 2017, Reference Case, https://www.eia.gov/totalenergy/data/monthly/pdf/flow/css_2017_energy.pdf



The World is Hungry for Energy

Asia (which includes China and India) accounts for more than 60% of the world's total increasein energy consumption from 2015 through 2040.

“Fossil fuels will still account for more than 3/4ths of the world’s energy consumption through 2040”

The World Will Require CCUS technologies



Domestic Energy Consumption to 2040



2040 Outlook

Point of Comparison Today-US ~260 GW



GHG Emissions by Country 2005-2017

2005

2016

2007

Source—Global Carbon Atlas

USA

USA

CHINA

CHINA



History of Successful DOE R&D to Advance Emission Controls

DOE has a history of advancing commercially successful R&D, with national economic and environmental benefits. For example:

• Low NOx burners developed by DOE are installed commercially on about 75% of U.S. coal-fired power plants;

• Selective Catalytic Reduction (SCR) technologies developed through DOE programs are now commercially installed on about half our nation’s coal fleet;

• Multi-pollutant control technologies including mercury have experienced significant sales in the commercial market; and

• Technologies to help recycle coal combustion products (Coal Ash) were developed through DOE programs and a large commercial recycling industry exists today in the U.S.



Coal Power: Emissions fell as Coal generation grew

-100%

-50%

0%

50%

100%

150%

200%

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Cha

nges

from

197

0

CoalkWh

SOxtons/kWh

NOxtons/kWh

PM10tons/kWh



Particulate Matter- USA The World Leader



•Department of Energy Investments in CCUS

Department of Energy Investments Clean Coal and Carbon Management



Cross Cutting Research and Systems IntegrationMaterials, sensors, and advanced computer systems for future power plants and energy systems, as well as testing and validating technologies into integrated systems

Carbon Capture, Utilization and StorageR&D and scale-up technologies for capturing and using or storing CO2 from new and existing industrial and power-producing plants

Advanced Energy SystemsTechnologies that improve plant efficiency and performance, increase plant availability, and maintain the highest environmental standards

Office of Clean Coal and Carbon Management – What we do



Federal Investment in Carbon Capture, Utilization and Storage R&D

$101.0 $101.0 $100.7 $100.7

$96.0 $85.3 $86.0 $86.0

$10.0$10.0 $12.0 $12.0

$207.0$196.3 $198.7 $198.7

FY 2 0 1 6 ENACTED

FY 2 0 1 7 ENACTED

FY 2 0 1 8 ENACTED

FY 2 0 1 9 ENACTED

Carbon Capture Carbon Storage Carbon Utilization

$ M

illio

ns

Carbon StorageSafe, cost- effective, and permanent geologic storage of CO2

Carbon Capture R&D and scale-up technologies for capturing CO2 from new and existing industrial and power-producing plants

CO2 UtilizationR&D and technologies to convert CO2 to value-added products



14

Coal First will have zero

or near zero CO2 emissions

“Carbon Free Fossil Energy”

Coal FIRST Technologies to Meet OpportunityFlexible, Innovative, Resilient, Small, Transformative



Coal FIRST Technologies to Meet OpportunityFlexible, Innovative, Resilient, Small, Transformative



The Challenge for Renewable Energy….Reliability and Cost

16

+ + + = 0%GHGSolar Long term

Back-up + CCSGrid ancillary services

4 Hourbackup

In remoteareas

+ + + = 0%GHG

Wind In remoteareas

Long termBack-up + CCSGrid ancillary services

4 Hourbackup

++ =+Coal First

Unlikely, generally located near urban areasand existing lines

On-site secure fuel

0%GHG

NONeed

Coal First Less Expensive Option



Global electricity prices in 2018, by select country (in U.S. dollars per kilowatt hour)

29% renewable

37% renewable53% renewable

17% renewable

14% renewable(50% hydro)

> 50% lower

Low Energy Prices Are a Strategic Economic Advantage



Lower consumer and manufacturing costs in SSEB States

Residential Electricity Costs vs Renewable Portfolio Standards (Oct 2018)

1,1

5,3

2,2

3,46,64,5

7,7

10

9,8

= Top 10 High Residential Cost States

= Top 10 High Industrial Cost StatesSource EIA, February 2019

8

10,9



Need to Reduce the Cost of CCUS

$45/Tonne

$30/Tonne



• Project at NRG’s W.A. Parish power plant near Houston TX

• Retrofit of Existing Coal Plant to process flue gas from W.A. Parish Unit 8 - Post-Combustion CO2 capture

• World’s largest post-combustion CO2 capture system

• Project was completed On-Budget and On-Schedule

• Delivering and permanently storing around 1.4 million metric tons of CO2 per year for EOR.

• 240 MWe slipstream scaled up to improve project economics

• Technology applicable to retrofit of existing coal plants

• EOR at the Hilcorp West Ranch oil field.

• Total Project Cost: ~$1 billion (DOE Cost Share: $190 MM)

– NRG Equity - $300 million

– JX Nippon Equity – $300 million

– JBIC Project Financing - $250 million

– MHI – Technology Provider

Key Events: Project Awarded: May 2010 Completed Construction (on Schedule and Within

Budget): December 2016 Started Operations: January 10, 2017 Ribbon Cutting Ceremony: April 13, 2017 2017 Plant of the Year (Power Magazine)

2017 Coal Project of the Year (Power Engineering Magazine)

First 1 Million Tons of CO2 Captured: Nov. 2017 2 Million Tons of CO2 Captured: Oct 2018

Petra Nova project “ …demonstrates that clean coal technologies can have a meaningful and positive impact on the Nation’s energy security and economic growth.”

U.S. DOE Secretary Rick Perry, April 13, 2017

Petra Nova-NRG EnergyAdvanced Post Combustion CO2 capture



TRIG Pre-combustion Capture Center

NCCC Pilot Solvent Test Unit (PSTU)

0.5 Mwe(10 tpd CO2)

Goal Develop technologies under realistic conditions that will reduce the cost of advanced coal-fueled power plants with CO2capture

Advantages• National resource for industry and

academia to validate performance and operations of advanced capture

• Consistent testing procedures and data collection allow comparison

• Stellar safety and environmental record

Status• Over 30 technologies tested from

laboratory to small scale pilot• Hundreds of technologies screened• Opportunities to test technologies using NG

National Carbon Capture Center (NCCC)Wilsonville, AL



Grid Reliability & Security:Wholesale Power Market Recognizes There’s a Problem

“the possibility that power plants won’t have or be able to get the fuel they need to run, particularly in winter—is the foremost challenge to a reliable power grid in New England.”

ISO New England

“While there is NO imminent threat, Fuel Security is an important component of ensuring reliability –especially if multiple risks come to fruition. The findings underscore the importance of PJM exploring proactive measures to value fuel security attributes, and PJM believes this is best done through competitive wholesale markets”

CASIO- Summer 2018- The continuing decline in gas generation as gas units retire is beginning to challenge the system supply’s ability to meet the net peak demand after sunset



2017

Location of Generating Sources, GWh of Variable and Long-Distance Transmission and Equipment Failure



“Duck Curve” Time of Day, Excessive Over-heating

“Distributed energy resources also introduce new challenges, with reversed power flows, increased harmonics, and potentially larger fault currents on distribution systems. For example, reverse power flow can result in excessive heating of distribution transformers”DOEQuadrennial Technology Review 2015



• “The age of these components degrades their ability to withstand physical stresses and can result in higher failure rates. Failure of key grid components can lead to widespread outages and long recovery times.”

• “The more dynamic operating environment associated with increased penetration of variable renewable resources and distributed energy resources (DERs) present a unique challenge for current grid components”

• “Understanding and mitigating the impact of these issues on grid components, old and new, are essential to ensure the future grid can continue to deliver electricity in a safe, stable, and reliable manner.”

California Regulators Knew The Implications to Their Grid in 2015



• PG&E had estimated as many as 5.4 million consumer households could be affected

• CPUC proposed guidelines for “last-resort de-energizing” but definition and requirements are vague and potential liabilities are enormous

• Prior weather related criteria for power-cut-off had been below 20% humidity and wind above 25 MPH with gusts at 45 MPH (tough on wind generation)

• De-energization could last for days and could occur sporadically throughout the six to seven month wildfire season

• Significant issues to contend with for emergency services communication and consumers that are medically-dependent on power

• To date, de-energization has occurred primarily on the distribution system; transmission-level de-energization may become necessary in the future.

• De-energization of transmission lines may have different and not yet fully understood impacts as compared to de-energization of distribution lines

The California Experience



• Virginia regulators approved Dominion Energy's plans for what could be the nation's second offshore wind farm Friday but said they would not have done so if the state Legislature hadn't created a mandate for the project.

• In its decision Friday, the SCC said the company had not justified the expense of the project relative to other types of renewables, or even compared to the nation's other offshore wind project in Massachusetts

• "Dominion's customers bear essentially all of the risk, including cost overruns and lack of performance.“

• But the policy preferences expressed in the energy law, wrote the SCC, took precedence over the regulatory analysis.

• If not for that, the pilot "would not be deemed prudent as that term has been applied by this Commission in its long history of public utility regulation or under any common application of the term," it said.

Typical of Actions Around The Country



•Department of Energy Investments in CCUS

Questions?

“Coal…. The 100% Organic Fuel”

The Future of Coal Lou Hrkman “Carbon Free Fossil Energy”

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