White Paper FT Energy Conference 3 rd February 2009 London Frank Farnel

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1 Magued Eldaief White Paper FT Energy Conference 3 rd February 2009 London Proprietary information

2 Cleaner Economical Coal-To-Power Solution - IGCC & CCS Affordable, reliable & environmentally responsible Terry Raddings (GE Energy) Fulfilling the world s energy needs now and in the future presents some interesting challenges and will require a balanced portfolio of fossil, nuclear and renewable technologies. Faced with tough emissions standards there has been a propensity for many countries to move away from perceived dirty fuels like coal and move to cleaner fuels like natural gas for energy conversion. However the market has seen volatility in gas price and issues around security of supply. As coal seems to be available in large quantities and from more politically stable regions, a renaissance is taking place in this area but there needs to be cleaner methods for coal to power solutions. The generation of electricity from coal has evolved since the industrial revolution from small-scale, low-efficiency and uncontrolled boilers, operating at near saturation conditions to large combustion furnaces, operating at ultrasupercritical steam conditions and capturing a large portion of pollutants prior to releasing the flue gases into the atmosphere. Today, coal-based electricity generation represents nearly 40% of global power generation. This share is likely to grow because coal represents the largest source of fossil energy reserves. Even with strong encouragement of renewable and other low carbon energy technologies, fossil fuels may still provide half of the world s energy supply in The international community has responded by implementing or considering emission limits to prevent even larger concentrations of carbon dioxide (CO2) in the atmosphere. Considerable discussion about climate change mitigation measures has identified Carbon Capture and Storage (CCS) as a potential solution, as it involves capturing CO2 that would otherwise be emitted from fossil fuelled power stations. As a consequence of this debate, it has been widely accepted that power production from coal must realize improvements, beyond incremental efficiency gains within conventional coal-fired generation technology, in order to achieve significant CO2 emissions reduction in the near term. In this context, Coal gasification and associated fuel process treatment provide commercially proven mechanisms needed, to separate carbon components on a pre-combustion basis and leaving essentially carbon-free hydrogen fuel, available for either electricity generation or for distribution within a hydrogen infrastructure. 1 The Stern Review The Economics of Climate Change 2006 GE Energy

3 Carbon Capture technologies are currently realized in industrial operations by means of processing partially oxidised fuels into hydrogen or ammonia, where CO2 is merely a by-product. Also called gasification, this partial oxidation process has an advantage in that low-grade fuels can be turned into high-grade hydrocarbons and unwanted pollutants are separated from the process gas streams and captured. Pre-combustion carbon capture and gas clean-up of this type offers substantial advantages over Pulverized Coal (PC) technology with respect to capturing pollutants, such as particulates, sulfur, mercury and CO2 and is a technology which can be readily deployed today. The environmental benefits of coal gasification-based CCS are comparable to the benefits of renewable energy technologies. The higher cost associated with pre-combustion CCS should be, and in some cases already is, incentivized. Pre-Combustion Technology (IGCC) for Carbon Capture and Storage Demonstration Plants Integrated Gasification Combined Cycle (IGCC) can be considered a critical technology in the fight against global climate change, as it represents the current state-of-the-art available technology to integrate energy production from coal together with CCS. IGCC can operate on a multi-fuel basis (coal/biomass/waste) and facilitate the use of coal to produce valuable products beyond electricity generation. Hydrogen is one major product of such polygeneration. As a result, IGCC can be seen as a vehicle to introduce the hydrogen economy. IGCC is fundamentally different from Pulverized Coal (PC), as it converts coal into a high-pressure synthetic gas fuel that is further cleaned prior to being burned in a gas turbine or purified and used for other purposes. In this respect it can be considered to be a coal refining process. IGCC power plants have been in commercial operation globally since the late 1970s, and the most recent installations have reached industry standards, which are comparable to other electricity generation equipment. The highly pressurized IGCC gasification process provides the mechanism to effectively capture all key pollutants such as particulates, sulfur, mercury and carbon dioxide, prior to combustion. Pre-combustion capture is more economical than capturing these pollutants in a post-combustion high volume and low concentration flue gas. It is expected that post-combustion clean-up technology will require a long-term development cycle before it is mature enough to be applied to existing coal plants. Even at that point, only a small portion of today s operating coal-fired plants will be able to adapt major retrofit conversions. In addition to other environmental benefits, IGCC plants require far less water than conventional coal plants do. GE Energy

4 Multiple international studies2,3 comparing today s available and prospective CCS technologies have concluded that pre-combustion capture is more economical than post-combustion capture with associated treatment of flue gases. In addition, energy producers have frequently pointed out the requirement for funding mechanisms to provide predictable long-term financial support for CCS projects. This effort is even more important in the context of variable commodity prices, security of supply and environmental issues, which impact all new energy construction programs, to prevent the withdrawal of investment plans for additional capacity, essential for the long-term stability and growth of EU economies. With all of this set against the backdrop of the global economic downturn, we must ensure that the momentum on this important issue is not diminished. IGCC and all of its potential benefits are commercially proven, ready and available now to meet the challenges outlined above. 2 DOE/NETL Cost and Performance Baseline for Fossil Energy Plants MIT The Future of Coal Options for a Carbon Constrained World 2007 GE Energy

5 CONTACTS GE Energy UK Magued Eldaief Executive Director Infrastructure Accounts & UK Managing Director Phone: (Jane Blanchard) Mobile: (Jane Blanchard) The Arena Downshire Way RG121PU Bracknell UK GE Energy Europe Communications Manager Communications & Public Affairs Europe Phone: Cell Phone: or , Avenue du Maréchal Juin 9000 Belfort France PR Agencies Hopscotch Europe In One Nicole Jung Account Manager njung@hopscotch.eu Phone: 0044 (0) Mobile: , Kildare Street Dublin 2 Ireland GE Energy