Southern States Energy Board Updates Blake Kinney, Policy & Regulatory Analyst Presented at the 16 th Annual Carbon Management Workshop Midland, Tx

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1 Southern States Energy Board Updates Blake Kinney, Policy & Regulatory Analyst Presented at the 16 th Annual Carbon Management Workshop Midland, Tx December 3, 2018

2 Interstate Compact Organization, created by state law and consented to by Congress Established as Southern Interstate Nuclear Board in 1960 Mission expanded in 1978 to include full spectrum of energy & environmental issues (Southern States Energy Board) 16 U.S. States and Two Territories Each jurisdiction represented by the governor, a legislator from the House and Senate, and a governor s alternate Federal Representative appointed by U.S. President

3 Southern States Energy Board Recent Issues and Activities Strategizing an Electric Energy Policy and Regulatory Framework in Puerto Rico State Energy Profiles document Energy & Environmental Legislative Digest 2018 Regional emergency motor fuel waivers & supply shortages 3 rd Governors Energy Summit during SSEB s 58 th Annual Meeting High profile resolutions Transformational technologies to reinvigorate the coal industry CO 2 management activities Governors Bryant (MS), Bevin (KY), and Edwards (LA) SSEB s 58 th Annual Meeting Biloxi, Mississippi September 17, 2018

4 Key Issues in the Shifting Energy Game Board Impact of hurricanes on major energy resources Regional emergency motor fuel waivers during major natural disasters or supply disruptions Appalachian energy/storage hub SECARB / Petra Nova emergence of CO 2 -EOR in region Industrial CCUS in Appalachia Project ECO 2 S and Regional CO 2 Storage Complex SECARB Offshore Gulf of Mexico saline storage and CO 2 -EOR/EGR assessments Nuclear faces cold reality in the South DOE Grid Reliability and Resiliency Markets Subsidies to meet state GHG goals and retain baseload power plants

5 Strategizing an Electric Energy Policy and Regulatory Framework in Puerto Rico Governor Ricardo Rosselló Navares SSEB Blue Ribbon Task Force Meeting San Juan, Puerto Rico October 16, 2018 Goals Work with the Governor and Legislature of Puerto Rico (PR) to establish a reliable, affordable, and sustainable electric energy grid system for the Island Develop a policy and legal framework to provide a regulatory regime for a privatized electric energy grid system in Puerto Rico Objectives Build a stakeholder participation network; Create potential legislative options for an electric energy grid system; Define the long-term goals and objectives of policies and a regulatory framework; and Review risks associated with privatization of the Puerto Rico Electric Power Authority (PREPA).

6 A Presidential Initiative to Reinvigorate the Coal Industry To ensure fuel diversity and future of U.S. coal industry, we must enable the next generation coal energy renaissance Incentivize pilot projects for new and transformational technologies at low technical readiness levels (TRLs) Facilitate full utilization of our Nation s coal resources Lead a power resurgence that accelerates the President s push for U.S. Energy Dominance in world markets

7 Statement of Need for Presidential Initiative Coal could disappear over the next several decades Decreased grid resilience, reliability, and energy security Negative impact on mining power generation industry Advanced, transformational coal technologies available soon Need Presidential and Congressional support to create investor and developer confidence to spur capitalization (public-private partnerships) Provide a pathway for new coal power units to replace retirements Consideration of modular, flexible designs and smaller unit deployment Federal government can stimulate business opportunities and catalyze private investment for project acceleration Captured CO 2 and other byproducts to offset and reduce costs Ensures presence of the U.S. in the global market as other nations build new coal plants

8 Key Principles and Components Principles Develop 3-5 small ( MW) coal power plants in 10 years Manufactured in United States Plant siting geographically diverse Collaborative approach Public-private partnerships share costs Components Supercomputer design and simulated plant operation Standardized plant design Modular design strategy Pilot strategy

9 Approach Demonstrate competitive, transformational clean coal technologies Create a market for modular coal power generation plants Require Congressional action to accelerate this effort Estimated cost for one 100 MW pilot is $500 million DOE will competitively select plants that can commence construction by 2020 Presidential directive and legislation shows the critical need and national interest in this project Integrated partnerships with significant DOE involvement Productive utilization of future Federal coal technology development funds Supercomputer design, plant simulation, and advanced material information Standardized, modular design strategy will be used to reduce plant replication costs Emphasis given to designs that minimize on-site construction

10 2018 State Energy Profiles SSEB Region & U.S. Generation Mix By Fuel Type

11 Electric Generating Resources Nationwide Selected States (2017) and Electricity Prices Predominantly Coal KY, WV, MO 80-93% AR 42% Predominantly Natural Gas MS, FL, LA 62-78% TX, VA 45-50% OK, GA, AL 38-41% Predominantly Nuclear SC, MD 45-58% TN, NC 33-40%

12 Electricity Generation Mix Texas and Louisiana 2017

13 Electricity Generation Mix Missouri and South Carolina 2017

14 Electricity Generation Mix Oklahoma and Arkansas 2017

15 Renewable Generation Mix 2017 Missouri and North Carolina

16 Renewable Generation Texas and Georgia

17 Historical Electricity Generation Mississippi and Louisiana

18 Historical Electricity Generation Texas and Oklahoma

19 Total Electricity Consumption SSEB Versus U.S. Average

20 Energy Consumption by Sector in SSEB Region

21 Transmission Infrastructure in SSEB Region

22 Global Expansion of LNG LNG trade poised for growth Large natural gas discoveries leading to LNG exports Major markets: Asia-Pacific Region (e.g., Japan is largest importer) European Region Latin America Numerous U.S. LNG Export Terminals on the horizon Sabine Pass (LA) Dominion Cove Point (MD) Cameron (LA) Freeport (TX) Elba Island (GA)

23 Regional Emergency Motor Fuel Waivers & Supply Shortages Hurricanes impact Gulf Coast refineries and motor fuel supplies and distribution systems EPA requires reformulated gasoline & low volatility gasoline through September 15 EPA has waiver authority under the Clean Air Act to allow continued sales of less controlled gasoline Waivers ensure adequate supply of fuel throughout the South & Mid-Atlantic Need: Accelerate regional waiver process

24 2018 Energy & Environment Legislative Digest Some key pieces of legislation: The Primacy and Reclamation Act of Tennessee The Puerto Rico Electric System Transformation Act Resolutions in Support of the Appalachian Storage Hub Protecting critical energy-generating infrastructure, improving disaster response, and wastewater management continue to trend as legislative priorities in the Southeast.

25 SECARB CCUS Demo SSEB s SECARB Demo at Plant Barry (Bucks, AL) 25 MW post-combustion slip-stream carbon capture 12-mile pipeline to Citronelle, AL, for storage Power Plant Capture Transport Storage

26 Petra Nova - Emergence of CCUS in South SSEB Demo Goes Commercial! NRG Energy (Houston, TX) Interest in Plant Barry Demonstration Plant scale-up to 240 MW Post-combustion slip-stream Captures 5,200 tons CO 2 /day or 90% of CO 2 Pipeline to Petra Nova West Ranch Oil Field (81 miles) EOR 300 bbls/day to 15,000 bbls/day! 60 million bbls Recoverable Reserves

27 Industrial and Commercial CO 2 Utilization Applications

28 CO 2 USA (Industrial CCUS) Market-driven to accelerate CCUS commercialization within industrial sector SSEB and DOE-FE developing roadmap and toolkit Central Gulf Coast Region is prime area for Industrial-CCUS Louisiana and industrial corridor along Mississippi uniquely situated to benefit from integrated CCUS System Industrial sources produce large amount of CO 2 Green pipeline runs across southern Louisiana Many existing oilfields could benefit from Enhanced Oil Recovery (EOR) Now collaborating with USEA on opportunities in Appalachian Region *Orange = Industries Red = Oil Fields CO 2 Emission Clusters, Pipeline Infrastructure, and Oil Fields Source: Louisiana State University, Center for Energy Studies, 2016

29 Project ECO 2 S CarbonSAFE Project ECO 2 S: Pursue key advances in CO 2 storage knowledge & technology, including optimizing CO 2 storage efficiency, modeling the fate of injected CO 2, and establishing residual CO 2 saturations. Project ECO 2 S will involve real-life experiences, issues, and challenges of scaling-up from its regional, pre-feasibility assessment of CO 2 storage to establish a site-specific, commercial-scale CO 2 storage facility, including capturing lessons learned CarbonSAFE Program Goals: Develop a commercialscale integrated CCS storage complex CarbonSAFE Program Phases: Phase 1. Integrated CCS Pre-Feasibility Study Phase 2. Storage Complex Feasibility Study Phase 3. Site Characterization Phase 4. Permitting & Construction Advanced Resources International, Inc. Auburn University Battelle Memorial Institute Geological Survey of Alabama Gerald R Hill PHD, Inc. GHG Underground Lawrence Berkeley National Laboratory Los Alamos National Laboratory Loudon Technical Services, LLC Mississippi Power Company Mississippi State University Oklahoma State University Pashin Geoscience, LLC Southern Company Trimeric Corporation University of Alabama at Birmingham University of Wyoming Virginia Polytechnic Institute and State University, Virginia Center for Coal and Energy Research

30 SOSRA (Offshore Resource Assessment) Characterize offshore CO 2 storage opportunities and conduct a volumetric analysis Model offshore CO 2 storage to identify well and reservoir configurations that are capable of meeting the goal of 30 megatonnes or greater storage in key focus areas Develop best practices to advance the state of knowledge while reducing the cost of storage operations 3 Planning Areas: Mid-Atlantic, South Atlantic, and Eastern Gulf of Mexico

31 SECARB Offshore GOM Study Areas (Oil & Gas and Saline) Oil & Gas Study Area Saline Study Area

32 SECARB-Ed (Workforce Development) Workforce development to support CO 2 storage advanced research and future commercial deployment Develop/provide short courses on CCUS technologies and Issue professional development hours and continuing education units

33 Key SSEB Resolutions Ensuring Electric Grid Resilience and Diverse Resource Generation (2.2018) Coal is abundant resource providing reliable, secure, resilient power supply Fuel Diversity is a great asset; base-load generation, coal and nuclear power are key to grid stability Resilience of electric grid depends on integration of all forms of generation Premature retirements of fuel-secure power plants create grid vulnerabilities SSEB supports preservation of fuel-secure generation Urging Removal of Clean Air Act Section 111(b) and Related Federal Implementation Plans (3.2018) Coal is vital resource to electric generating mix and coal plants are being shut down prematurely Federal Implementation Plans create undue regulations that eliminate coal as generating option SSEB supports states implementation and removal of 111(b) rules

34 Key SSEB Resolutions Amending the Resource Conservation and Recovery Act to Encourage Reclamation of Coal Combustion Residual Resources from Surface Impoundments and Landfills (4.2018) Supporting Transformational Science and Technology Innovation to Advance U.S. National Security and Economic Growth (5.2018) Supporting Energy Security for Consumers (6.2018) Recommending Policies that Mitigate Market Distortions and Create Transparency (7.2018) Accelerating the Issuance of Regional Energy Fuel Waivers During Supply Shortages (9.2018)

35 Conclusions: Electric Utility Resource Mix in the South Demand continues to be flat or declining Natural gas and oil prices are low Aging fleet of coal-fired generating capacity Environmental requirements for generation, including uncertainty on carbon limits Transformational technologies for fossil fuels CCUS focus including natural gas and and other industrial sources Operational flexibility of renewables increasing Consumers are demanding renewable resources BlackRock Investments urges ExxonMobil to consider carbon emissions in future investment decisions Federal budgets for utility resource R&D uncertain

36 Conclusions: Coming Electricity Sector Trends! Changing generation fuel mix has been dramatic natural gas and renewable generation will continue to dominate new capacity and generation needs Distributed energy resource (DER) penetration continues to increase The age of electric vehicle (EV) is here Generation is evolving toward more diverse, decentralized network of smaller capacity Future grid will be a communications-enabled, self-healing network Utilities will enhance their relationship and knowledge of their customers Utilities will be digitally enabled, shared services organization providing fully automated corporate services ~2018 Outlook on Power & Utilities, Deloitte Center for Energy Solutions

37 Southern States Energy Board 6325 Amherst Court Peachtree Corners, Georgia (770)