Advanced Coal Technologies Driving A Low Emissions Future

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1 Advanced Coal Technologies Driving A Low Emissions Future George J. Schuller Jr. President Australia August 2018

2 Themes for Discussion Coal remains essential part of world s energy mix Baseload coal power is reliable and can reduce energy costs Technologies available today are driving emission reductions If countries like Japan are using advanced technologies and Australian coal, why isn t Australia? 2 2

3 Global Industry Overview Coal remains major part of global energy mix and essential ingredient in steelmaking 8 billion tonnes of coal fuels 37% of global electricity and enables continued growth in steel production Australia is strategically positioned to serve the growing markets in SE Asia It s essential we recognise and support the use of technologies that lower emissions and satisfy the demand for low-cost, reliable power 37% Share of global electricity 8B tonne per year global coal demand 1B tonne per year global met coal demand Source: Industry reports and Peabody Global Analytics. Electricity generation from IEA World Energy Outlook

4 Coal To Overtake Iron Ore As Australia s Largest Export Earner June 2018 Resources and Energy Quarterly shows coal is expected to earn $60.2 billion in (highest annual rate in history) 180Mt or $37.5 billion met coal 200Mt or $22.7 billion thermal coal Chief Economist forecasts coal to be Australia s largest export earner at $58.1 billion in Coal exports are largest contributor in NSW and QLD and mostly sold into Asian markets 75% share of National Electricity Market 51,000 Direct jobs $6B State royalties Source: June 2018 Department of Industry s Office of the Chief Economist Resources and Energy Quarterly 4

5 IHS Markit: Total Global Coal Generation Capacity to Increase 15% by 2030 Nearly 300 GW of coal-fueled capacity being built in Asia over next five years Dalrymple Bay Coal Terminal Total world coal-fueled capacity grows 15% by 2,030 to 2,389 GW While ROW coal-fueled capacity declines 125 GW from , Asia capacity rises 439 GW Source: 2018 IHS Markit. All rights reserved. The use of this content was authorized in advance. Any further use or redistribution of this content is strictly prohibited without prior written permission by IHS Markit. 5

6 High-Efficiency, Low-Emissions Coal Fuels Emissions Reductions HELE Coal-Fueled Plants Source: World Coal Association 6

7 Asia Leading the Advanced Coal Revolution Japan and China USC Plants Japan and China have been the most active in building USC plants J-Power upgraded their 1967 sub-critical Isogo 38% efficient coal-fired power plant to an USC 43% efficiency plant with SOx, NOx, PM reduced levels to less than one third China s Waigaoqiao plant has a capacity of 5000MW and China is relying on these larger, advanced units for dispatch to displace higher emissions from older, less efficient power stations The units have integrated advanced air quality control systems, yielding noncarbon air emissions well below China s latest more stringent standards, and also below comparable standards in North America and Europe Japan: Isogo Power Station Ultra Supercritical Technology (Courtesy of J-Power) China: Waigaoqiao No3 Power Station, Pudong New Area of Shanghai 500MW 7

8 HELE Offers Significant Reductions Carbon Capture and Storage Aims For Near Zero Emissions 8

9 Case Study: Petra Nova A Carbon Capture Model for Existing Coal Plants Captures carbon for enhanced oil recovery using post-combustion technology Expected to increase production from 500 to 15,000 bpd Received $190 million U.S. Department of Energy grant Completed on schedule and on budget More than 1 million tons CO 2 captured to date Petra Nova near Houston, Texas / Joint Partnership NRG and JX Nippon Oil & Gas Exploration Source: Texas Tribune, April 13, 2017, During Texas Visit Rick Perry Touts Houston Area Carbon Capture System 9

10 Advanced Technologies Are Real But Need More Action CCUS $20b Total RENEWABLES $2500b US $ billion Source: Clean energy data from Bloomberg New Energy Finance, 2016; Clean Energy Investment By the Numbers end of 2015; CCUS data sources from IEA, 2015, Energy Technology Perspectives

11 Low Emissions Coal Technologies Partnership with Government and Investors Capturing CO 2 at Callide coal-fired power plant Sequestering tonnes of CO 2 in Otway Basin in Victoria Intensified search for storage sites in Australia Completed the Feasibility Study Stage of CTSCO a proposed, major CCUS project in the Surat Basin in South East Queensland Advanced the understanding of how to deploy Ventilation Air Methane (VAM) abatement technology safely, and Contributing to the international R&D effort Oxyfuel demonstration (pictured at left) Callide Power Station, Queensland, CSEnergy Otway project injection, CO2CRC, Victoria Source: Coal21 Fund

12 This Investment Means We Are Better Informed A targeted storage search program is fundamental to enabling CCUS Low emissions coal technology costs are starting to come down R&D continues to play a strong role supporting technology advances Source: Coal21 Fund

13 Spotlight On Carbon Transport and Storage Company (CTSCo) CTSCo to trial CO 2 injection by retrofitting Post Combustion Capture (PCC) to a supercritical power station using technology from China The trial will occur at the Huaneng owned Millmerran Power Station The project is securing a greenhouse gas Tenement (EPQ7) Glencore s CTSCo well in the Surat Basin Source: Coal21 Fund

14 Spotlight On Carbon Capture and Storage Hub Concept Brings together Queensland industries to transport CO 2 via a common use pipeline and inject it into a deep underground storage site Designed to start small at lowest cost and build up to a full scale industrial hub South Queensland region offers one of the most cost effective storage basins in Australia at $5 15 per tonne CO 2 Source: Coal21 Fund

15 Advanced countries are using Australian Coal A Technology Problem Or a Communication One? Coal is important to Australia s economic strength and prosperity Coal provides 51,000 Australian jobs, mostly in regional and rural areas The Australian coal industry needs to move into the future by reducing emissions Without coal as part of the energy mix, power will cost more and reliability will suffer Australian coal improves energy efficiency 15

16 A Technology Problem Or A Communication Issue? Perceptions of the Coal Industry and Advanced Technologies Coal industry is seen to be a necessary form of baseload power despite many people seeing it as having a limited future Low understanding that the coal industry contributes 75% to the energy mix (many underestimating) People are generally unable to separate the different aspects of the coal industry domestic power, exports and power station ownership Awareness of CCUS is low, with very few people having heard of the technology or other advanced technologies many feel it s too good to be true With more information sentiment is very positive, however concerns over safety of storing carbon underground If we can reduce emissions by 90%, then why aren t we looking at that more? Mackay, general population Source: JWS Research May 2018, Coal21 Fund 16

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