Transcript Generation Mix and Supply Needs

Environmental Challenges in
Electric Supply Planning
May 4, 2006
Overview
Mike Wilder
Energy Supply Fundamentals
Jeff Burleson
Environmental Challenges
Steve Ewald
Planning for the Future
Jeff Burleson
Georgia Power
8,800 Employees Across Georgia
2 Million Customers in 153 of Georgia's 159
Counties
13,000 Miles of Transmission Lines
61,000 Miles of Distribution Lines
14,000 MW of Generating Capacity
#’s of Plants
19 Hydro
10 Oil/Gas
7 Coal
2 Nuclear
Power Generation
Gas & Oil
35.0%
DSM
2.7%
Nuclear
10.8%
Hydro
5.8%
Coal
45.7%
Capacity - 2006
What are the potential
technologies to fill Southern
Company’s needs?
Gas-Fired
Pulverized Coal
Coal Gasification
Nuclear
Renewables / Other Alternatives
Comparison of Coal, Oil and Gas Pricing
Updated as of January 1, 2006
$14.00
$13.00
Fuel Price ($/mmBtu)
$12.00
$11.00
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Historical Coal *
West Texas Intermediate Crude Oil
Colombian 11,300 Btu/Lb; <1%; FOB Port Bolivar
Historical Gas ^
PRB 8,800 Btu/lb, 0.8#SO2, FOB Mine
Current Long Range Gas Forecasts
Henry Hub, $/MMBtu
EIA Natural Gas Price Forecast
Electric Power Sector
8.00
Consultant #3
October ‘05
7.00
6.50
6.00
5.50
5.00
4.50
EIA 2005 gas price forecast (2004$/mmbtu)
25
20
24
20
23
20
22
20
21
20
20
20
19
20
18
20
17
20
16
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
4.00
20
2004 $ per million Btu
7.50
EIA 2006 Gas Price forecast (2004$/mmBtu)
Gas-Fired Generation – Summary
Pros
Cons
• Multiple configurations allow
• Uncertainty of gas supply
flexible sizing
• Concerns about gas price
• Low SO2, NOx, and CO2
volatility
emissions; no mercury
• Long-term performance is
emissions
unproven
• Less capital intensive
– Lower base rate impact
• Short construction period
• Easier to site
– Low water usage
– Needs smaller footprint
• Recent operational experience
• Ability to add coal gasification
technology
US Coal Recoverable Reserves
US Appalachian Basin
55 billion tons
Georgia Power
purchased
34.6million
tons in 2004
for itself and
other plant coowners
Interior US/ Illinois Basin
68 billion tons
Rocky Mtns and PRB Basins
150 billion
Southern Appalachian (Ala.Basin)
.3 billion tons
Coal Generation – Summary
Pros
• 250 years of known/reliable
domestic reserves
• Experience in operating coal
plants
• Low variable costs
• Less fuel price volatility than
gas
• Aftermarket ash sales
Cons
• High capital costs
– Large rate base impacts
• Environmental concerns
• Siting
– Proximity to rail, barge, or mine
– Larger footprint
– Water
• Longer development period
– 5-6 years versus 3 for a CC
– More risk from decision to inservice
• Coal and ash storage issues
• Permitting
Coal Gasification Generation – Summary
Pros
• Low variable costs
• Less fuel price volatility than
gas
• Southern’s prior involvement
• Potential for synfuel tax
credits
• DOE support
• 250 years of known/reliable
domestic reserves
• Can be added to existing
combined cycles
• Can burn gas as a secondary
fuel
Cons
• Technology risk
• Must be located in close
proximity to rail or barge
• Coal and ash storage issues
• High capital costs
– Large rate base impacts
– Unknown environmental
classification
Nuclear Generation – Summary
Pros
• No emissions
• Low fuel price volatility
• Expected generic design preapproval (Westinghouse/GE)
• Federal government support
Cons
• Long development periods
– Site permitting license process
takes about four years
• Public opinion / politics
• Unresolved spent fuel storage
issues
– Yucca Mountain
• Maturity of cost and schedule
estimate
• Spent fuel transportation
• High capital costs
– Large rate base impacts
– Design is subject to regulatory
revisions/mandates after
commercial operation
Renewable Generation
•
•
•
•
Wind
Solar
Hydro
Biomass
A Matter of Scale
Georgia Power Peak Demand = 16,177 MW (7/26/05)
Wind
1 Turbine ~ 3 MW
Solar
Coal
1 Installation ~ 45 kW
VS.
Biomass
1 Unit ~ 125 MW
Hydro
1 Dam ~ 45 MW
1 Plant ~ 1800 MW
1 MW = Energy Needed To Power 250 Homes
Energy Efficiency and Demand
Side Management
• Programs offered include:
–
–
–
–
–
–
Energy Audits
Energy Star New Home Program
Energy Star Appliances
Low Income Weatherization
Powercredit
Approximately 1,000 MW’s of demand reduction
through Pricing programs
– Distribution Efficiency Program
• Additional programs will be proposed next
year
Renewables – Summary
Wind
Lack of sustained velocity
Solar
Lack of sufficient intensity
Hydro
Most Commercial sites developed
Biomass
Combustion Process
Landfill Gas
Combustion Process
Green Energy Program awaiting
completion of Green Energy
Generator construction
Environmental Challenges in
Electric Supply Planning
May 4, 2006
Overview
Mike Wilder
Energy Supply Fundamentals
Jeff Burleson
Environmental Challenges
Steve Ewald
Planning for the Future
Jeff Burleson
Federal Environmental Laws
Affecting Electric Utilities
AMFA
ARPAA-88
AIA
ASBCAA-88
ESAA-88
FIRAA-88
TOSCAA-88
NWPAA-88
CPDRAA-88
NMSPAA-888
FCRPA
MMPAA-88
ODBA
SFA
FWLA-88
ICPBD
EDP
OPA
RECA
CAA-90
CCRA
CLFWRA
HMTUSA
NEEA
PPA
PPVA
IEREA
ANTPA
GLCPA
ASA
CZMAA-90
WRDA
FFCA
CERFA
CRAA-92
150
SDWAA-86
SARA-86
100
NEPA
EQIA
CAA
EPA
OSHA
FAWRAA-70
BLRA
ERDDAA
EAWA
NOPPA
PTSA
UMTRCA
ESAA-78
QCA
NCPA
AOA
RCRAA-84
WLDI
MPRSAA-82
NWPA
ESAA-82
CAAA-77
CWA
SMCRA
SWRCA
SDWAA-77
ARPA
ESA
TAPA
NHPA
PFW
FOIA
MBTA
YOS
VA
RTC
RHA
0
NBRA
AA
IA
LA
1862
1872
1882
1892
WA
1902
NPS
MBCA
OPA
1922
1932
FCMHSA
ESCA
FHSA
NFMUA
FWCAA-58
AEA FWA
FIFRA
FAWRA
NLR A
WPA
SCS
FEATH
1912
TA
FWCA AEPA
BPA
WQA
LLA-81
HMTA
WSRA
EA
RCHSA
50
NAWCA
BLBA
FWPCA
MPRSA
CZMA
NCA
FEPCA
FWSA
MMPA
TOSCA
FLPMA
RCRA
NFMA
CZMAA-76
AQA
WRPA
WLDA AFCA
CAA-55
PAA
WPCA
1942
1952
1962
1972
1982
1992
2001
APA
SWDA
CERCLA
CZMIA
COWLDA
FWLCA
MPRSAA-80
ANISCA
2003 Status Report Shows U.S. Air Cleanest Ever Since 1970
EPA Press Release - Washington, D.C.- September 22, 2004
• America's air is the cleanest ever in three decades
• Emissions have decrease even as our economy has
increased nearly 200%
• Since 1970, the aggregate emissions for the six major
pollutants have been cut 53%
CO
NOx
SO2
VOC
Pb
- 55%
- 30%
- 52%
- 53%
- 99%
Press Release
Governor Sonny Perdue
Thursday, June 16, 2005
Metro Atlanta Air Quality Shows Dramatic Improvement
Area in Attainment with the 1-Hour Ozone Standard for the First Time Since 1978
“Metro Atlanta has made significant progress in improving its air quality …” said
Governor Sonny Perdue.
Increased partnership with industry, including significant investment from Georgia
Power to lower the emissions on their coal-fired power plants.
###
Georgia Power
Historical Emission Trends
60%
Retail Sales
Up 40%
40%
Population
Up 28%
20%
0%
-20%
SO2 tons
Down 39%
-40%
NOx tons
Down 56%
-60%
-80%
1990
Georgia Growth
1995
2000
Emissions
2003
Plant Bowen
SCRs
Controls installed to address 1-Hour Ozone Standard: Selective Catalytic Reduction
(SCR) at Plants Bowen Units 1-4, Wansley Units 1-2, and Hammond Unit 4;
combustion controls at Plants Hammond, McDonough, Yates, Branch, and Scherer.
Cooling Tower
Retrofits
Plant Branch
Plant Yates
Environmental Issues Timeline
2000 2001
2002 2003 2004 2005 2006 2007
2008 2009 2010 2011 2012 2013 2014 2015
NOx 1-hour Ozone 
NOx 8-hour Ozone Nonattainment
PM2.5 Nonattainment
Clean Air Interstate Rule
Clean Air Mercury Rule
Regional Haze
New Source Review
NOx
SO2
Hg
8-hour Ozone Nonattainment Designations
TOWNS
CATOOSA
FANNIN
DADE
RABUN
MURRAY
UNION
WHITFIELD
WALKER
WHITE
GILMER
LUMPKIN
CHATTOOGA
GORDON
HABERSHAM
STEPHENS
PICKENS
BANKS
FRANKLIN
DAWSON
HART
BARTOW
HALL
CHEROKEE
FLOYD
FORSYTH
Atlanta:
• Attain by 2007 or
• “Bump-up” SIP due 2007
• Attain by 2010
Macon:
• SIP due 2007
• Attain by 2009
ELBERT
MADISON
JACKSON
POLK
BARROW
BARROW
COBB
CLARKE
GWINNETT
PAULDING
OGLETHORPE
OCONEE
WILKES
WALTON
HARALSON
DEKALB
DOUGLAS
LINCOLN
ROCKDALE
GREENE
FULTON
CARROLL
MORGAN
CLAYTON
T ALIAFERRO
McDU
COLUMBIA
NEWTON
HENR Y
FAYETTE
W ARREN
PUTNAM
RICHMOND
JASPER
COWETA
BUTTS
SPALDING
HEARD
GLASCOCK
HANCOCK
PIKE
LAMAR
MERIWETHER
MONROE
BURKE
JEFFERSON
TROUP
BALDWIN
JONES
W ASHINGTON
UPSON
BIBB
BIBB
HARRIS
SCREVEN
CRA WFORD
JOHNSON
WILKINSON
JENKINS
TWIGGS
T ALBOT
EMANUEL
PEACH
MUSCOGEE
T A YLOR
HOUSTON
MARION
BLECKLEY
MACON
LAURENS
TREUTLEN
BULLOCH
CANDLER
CHA TTAHOOCHEE
EFFINGHAM
MONT GOMERY
SCHLEY
PULASKI
DOOLY
WHEELER
STEW ART
WEBSTER
SUMTER
WILCOX
TOOMBS
DODGE
CRISP
EV ANS
BR YAN
CHA THAM
TATTNAL
TELFAIR
QUITMAN
LIBERTY
TERRELL
LEE
RANDOLPH
JEFF
DA VIS
BEN HILL
LONG
APPLING
TURNER
IRWIN
CLAY
CALHOUN
McINTOSH
COFFEE
WORTH
BACON
DOUGHERTY
W AYNE
TIFT
BAKER
EARLY
PIERCE
BERRIEN
A TKINSON
BRANTLEY
GLYNN
COLQUITT
MITCHELL
MILLER
W ARE
COOK
LANIER
SEMINOLE
THOMAS
DECA TUR
LOWNDES
CAMDEN
CLINCH
CHARLTON
BROOKS
GRADY
ECHOLS
Fine Particulate Nonattainment Areas
TOWNS
DADE
FANNIN
CA TOOSA
RABUN
MURRAY
UNION
WHITFIELD
WALKER
WHITE
GILMER
LUMPKIN
CHATTOOGA
GORDON
HABERSHAM
STEPHENS
PICKENS
BANKS
FRANKLIN
DAWSON
HART
BARTOW
HALL
CHEROKEE
FLOYD
FORSYTH
ELBERT
MADISON
JACKSON
POLK
BARROW
COBB
OGLETHORPE
OCONEE
WILKES
WALTON
HARALSON
DEKALB
DOUGLAS
Atlanta
Chattanooga
Floyd County
Macon
CLARKE
CLARKE
GWINNETT
PAULDING
LINCOLN
ROCKDALE
GREENE
FULTON
CARROLL
MORGAN
CLAYTON
T ALIAFERRO
McDU
COLUMBIA
NEWTON
HENR Y
FAYETTE
W ARREN
PUTNAM
RICHMOND
JASPER
COWETA
BUTTS
SPALDING
HEARD
GLASCOCK
HANCOCK
PIKE
LAMAR
MERIWETHER
MONROE
BURKE
JEFFERSON
TROUP
BALDWIN
JONES
W ASHINGTON
UPSON
BIBB
BIBB
HARRIS
SCREVEN
CRA WFORD
JOHNSON
WILKINSON
JENKINS
TWIGGS
T ALBOT
EMANUEL
PEACH
MUSCOGEE
T A YLOR
HOUSTON
MARION
BLECKLEY
MACON
LAURENS
TREUTLEN
BULLOCH
CANDLER
CHA TTAHOOCHEE
EFFINGHAM
MONT GOMERY
SCHLEY
PULASKI
DOOLY
WHEELER
STEW ART
WEBSTER
SUMTER
WILCOX
TOOMBS
DODGE
CRISP
EV ANS
BRYAN
CHA THAM
TATTNAL
TELFAIR
QUITMAN
LIBERTY
TERRELL
LEE
RANDOLPH
JEFF
DA VIS
BEN HILL
LONG
APPLING
TURNER
IRWIN
CLAY
CALHOUN
McINTOSH
COFFEE
WORTH
BACON
DOUGHERTY
W AYNE
TIFT
BAKER
EARLY
PIERCE
BERRIEN
A TKINSON
BRANTLEY
GLYNN
COLQUITT
MITCHELL
MILLER
W ARE
COOK
LANIER
SEMINOLE
THOMAS
DECA TUR
LOWNDES
CAMDEN
CLINCH
CHARLTON
BROOKS
GRADY
ECHOLS
• Designations – Dec 17, 2004
• SIPs due 2007
• Attain ~ 2010 to 2012
Clean Air Interstate Rule (CAIR)
• Rule Finalized in March 2005
• SO2 Emissions Reductions
– 45% reductions from 2003 levels by 2010
– 57% reductions from 2003 levels by 2015
– Anticipated 73% reduction at full
implementation
• NOx Emissions Reductions
– 53% reductions from 2003 levels by 2009
– 61% reduction for 2003 levels by 2017
Clean Air Mercury Rule
• Rule finalized March 2005
• 38 ton national cap on coal-fired
power plants in 2010
• 15 ton national cap on coal-fired
power plants in 2018
• Equivalent to a 70% reduction when
fully implemented
Man-Made Mercury Sources
Worldwide
Oceania
48.3
Africa
246.1
Asia
1,117.2
North Americabalance
64.4
United States
South & Central
140.6
America
176.2
Europe
508.3
U.S. electric utilities emit ~ one percent of total global mercury emissions
Georgia Power’s Environmental Commitment
Past & Projected
0%
Bowen 3&4 Scrubbers
SO2
-10%
Wansley 1 & 2 Scrubbers
-20%
Bowen 1 & 2
Scrubbers
NOx
TBD
Clean Air Interstate Rule
-30%
TBD
Clean Air Mercury Rule
-40%
TBD
Low Sulfur Coal
TBD
-50%
PM2.5 & 8-Hr. Ozone
Low NOx Burners on Larger
Boilers
TBD
-60%
Nonattainment
SCR’s @ Bowen, Wansley &
Hammond 4
TBD
-70%
Fuel Switching @ Scherer
TBD
-80%
Low NOx Burners @ Branch
TBD
TBD
-90%
TBD
TBD
-100%
'90
'95
$1 Billion Spent
'00
'03
$3 Billion Potentially
Emission Control Equipment for Coal-Fired Boilers
Mercury
CAIR,
Regional Haze,
& PM2.5
Ozone
Coal Fired Boiler
NOx & Hg
Air
Control
Heater
SCR
Low NOx
Burners
Bottom
Ash
Dust & Hg
Control
SO2& Hg
(acid
gases)
Electrostatic
Precipitator
Scrubber
New
Stack
Gypsum
Coal
Mill
Fan
Flyash
SO2 Scrubbers
Scrubber Concept
SO2 Scrubbers
675 Feet
60 Feet
Scrubber Concept
120 Feet
Chiyoda Jet Bubbling Reactor
Bowen Scrubber Craft Projection
1200
SHEET METAL
PAINTER
1000
PIPE FITTER
OPERATOR
MILLWRIGHT
800
LABORER
IRONWORKER
INSULATOR
600
ELECTRICIAN
CARPENTER
400
BOILERMAKER
200
Jul-10
2009
Jan-10
Jul-09
2008
Jan-09
Jul-08
2007
Jan-08
Jul-07
2006
Jan-07
Jul-06
2005
Jan-06
Jul-05
Jan-05
0
2010
Flue
FlueGas
GasOutlet
Outlet
Bag Filter
Bag Filter
Baghouse with
Activated
Carbon Injection
ACI
Flue Gas Inlet
Ash
Potential GPC Controls through
2012
***PRELIMINARY***
• 10 Scrubbers under construction
• Additional SCRs
• Baghouses w/ Sorbent Injection
Unknowns in Planning
for the Future
…the Carbon Dioxide (CO2)
Challenge
What options are available?
• Shift to Gas (lower CO2 emissions)
• Sequester CO2
- Forestry / Agriculture
• Capture and Store
• Purchase Credits/Allowances
• Install Non-emitting Generation (nuclear,
wind, solar, biomass)
• Coal Gasification
-- Long Term, Global Solutions --
A Matter of Scale
Georgia Power Peak Demand = 16,177 MW (7/26/05)
Wind
1 Turbine ~ 3 MW
Solar
Coal
1 Installation ~ 45 kW
VS.
Biomass
1 Unit ~ 125 MW
Hydro
1 Dam ~ 45 MW
1 Plant ~ 1800 MW
1 MW = Energy Needed To Power 250 Homes
Environmental Challenges in
Electric Supply Planning
May 4, 2006
Overview
Mike Wilder
Energy Supply Fundamentals
Jeff Burleson
Environmental Challenges
Steve Ewald
Planning for the Future
Jeff Burleson
Integrated Resource Plan
Overview
EXISTING
CAPACITY
RESOURCES
FUEL
FORECAST
LOAD
FORECAST
RELIABILITY
IRP
DEMAND SIDE
OPTIONS
SUPPLY SIDE
OPTIONS
NEW
TECHNOLOGIES
RESERVE
MARGIN STUDY
(15%)
Why do we need a mix?
Because of the System Load Shape, a combination of
resource types is the least cost solution
MW
Relative Costs
System
Load
Peaking
(cf < 20%)
Intermediate
Fixed
Variable
Low
High
Medium Medium
(20% < cf < 60%)
Base Generation
(cf > 60%)
time of day
High
Low
New Capacity Additions – 1970s
Coal / Pet Coke
37%
Nuclear
17%
Biomass
0%
Other
0%
Green Power
0%
Hydro
12%
Oil
14%
Gas
20%
New Capacity Additions – 1980s
Coal / Pet Coke
45%
Nuclear
31%
Other
0%
Biomass
3%
Green Power
2%
Oil
2%
Hydro
6%
Gas
11%
New Capacity Additions – 1990s
Biomass
4%
Green Power
2%
Hydro
5%
Other
0%
Coal / Pet Coke
14%
Nuclear
7%
Oil
5%
Gas
63%
New Capacity Additions – 2000s
Biomass
0%
Green Power
Hydro1%
Other
0%
Coal / Pet Coke
1%
Nuclear
Oil
0%
0%
0%
Gas
98%
Analysis of Alternatives
Coal
Natural Gas
Nuclear
Nuclear Summary
– New designs appear economic in 2015
– Gas and to some extent coal continued volatility,
nuclear offers stable fuel source
– Zero air emissions, including CO2
Observations & Conclusions
• Gas Price Volatility
• Renewables & Green
– Very Expensive
– Lack of reliable supply in Georgia
• Demand Side Programs
– Programs yielding rate indifference are currently
offered
– Demand is small
• Nuclear
– With current assumptions, nuclear is the
least cost base load option
– Nuclear technology still carries many
political/regulatory and cost risks