Securing Our Energy Future. Susan N. Story

Transcription

1 Securing Our Energy Future Susan N. Story

2 World Energy Demand Growing Dramatically Population (Billions) World Population World Energy Consumption Population of Industrialized Countries Year Energy Consumption (Qbtu / yr)

3 U.S. Electricity Generation Fuel Diversity Electric Generation by Fuel (billion kilowatt-hours) Coal Outlook 2003 Natural Gas Bottom Line: There must remain a variety of options in order to meet future demand. Source: EIA Annual Energy Outlook 2006

4 Why Do We Keep Coal in the Mix? World Energy Reserves 70% of World Fossil Energy Reserves are in Coal Source: Energy Information Administration/ International Reserves Data

5 Comparison of Coal, Oil, and Gas Pricing Through December 2005 $16.00 $14.00 Daily Market Fuel Price ($/mmbtu) $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $ Bituminous Coal Natural Gas No. 2 Fuel Oil

6 Energy Facts for Florida Nearly 1,000 new residents arrive daily. Florida ranks 3 rd in U.S. in total energy consumption. Florida s need for electricity will grow by 30% over the next 10 years, 58% by Florida is a net importer of electricity and relies more heavily on natural gas and oil power plants. Source: U.S. Census Bureau 2005

7 Energy Facts for Florida Electricity prices have been rising rapidly. The state is relatively independent of national electricity power grid. Florida has limited infrastructure for sourcing natural gas and LNG Hurricane Seasons show drastic impact of power outages and fuel interruptions on our economy.

8 Governor Jeb Bush 2006 Florida Energy Act Press Release February 2006 "A reliable, cost-efficient supply of energy is critical to Florida's continued prosperity," said Governor Bush. "Through diversity and conservation efforts, we can reduce our dependence on imported oil, spur economic growth and ensure that a balanced mix of fuel sources and technologies are readily available for years to come."

9 The Florida Council of 100 Some key questions the state needs to address are: What is required to ensure Florida has reliable and affordable energy in the future? What are the costs and benefits of putting in place reliable energy infrastructures, given the projected risk of hurricanes in the current cycle? Preparing for the Future Report, January 2006 #7: Energy Dependence and Affordability

10 Source: Energy Velocity; Platt s; Bloomberg; EIA; McKinsey Analysis Florida relies more heavily on Natural Gas and Oil for Power Generation Source of Florida s electricity generation (variable costs only) Normalized for MW capacity installed

11 Florida has historically remained disconnected from the National Power Grid Electricity Transmission Lines Source: Energy Velocity Limited connectivity with power grid Increases the risks of supply disruptions by not having backup power sources Protects Florida from failures occurring in other geographical areas (cascaded blackouts) Transmission constraints between southeast Florida and the remainder of the state, may put a premium on local generation capacity

12 Source: Energy Velocity; McKinsey Analysis Florida s energy planning will have to consider the implications of alternatives High Low Mode CAPEX Cost / MWh Benefits Risk Environmental Impact Coal year supply in North America Less price volatility Operational experience Reliable baseload generation Evolving laws and regulations Real and perceived environmental impacts Siting concerns Medium/High -SO2, NOx, Mercury, CO2 challenges Coal gasification plants significantly reduce CO2 emissions Oil Ease of use for fuel switching with natural gas Exposure to increasing international oil prices Medium/High -CO2, SO2, NOx, Mercury - Reduced by the use of filters

13 Florida s energy planning will have to consider the implications of alternatives High Low Mode Natural Gas Nuclear CAPEX Cost / MWh Source: Energy Velocity; McKinsey Analysis Benefits Short time frame to construct Environmentally friendly Significant operational knowledge Low operational costs No emissions Reliable baseload generation Risk Already very dependent on natural gas Exposure to increasing and volatile natural gas prices Hurricane exposure on gas supply in Gulf Radioactive waste disposal issues Credit rating concerns Siting concerns Environmental Impact Low Half CO2 of coal Very low NOx, SO2 Low - no emissions High - nuclear material disposal

14 Florida s energy planning will have to consider the implications of alternatives High Low Mode CAPEX Cost / MWh Import from out of state Renewable sources Source: Energy Velocity; McKinsey Analysis Benefits Reduced power plant construction in state Low to no emissions In state fuel supply New technology Risks Less control over energy infrastructure decisions Increased energy deficit Exposure to Grid fluctuations More transmission capacity needed Have not achieved large scale usage Expensive FL geography not well suited for some types Environmental Impact Low in Florida -Real environment impact depends on technology employed for generation and location Very Low

15 What about Renewables? - SOLAR - Source: National Renewable Energy Laboratory

16 What about Renewables? -WIND - Source: National Renewable Energy Laboratory Wind Generation Potential in the United States Wind Potential Rated from Class 1 to 7

17 The Cost of Renewable Energy Options

18 Our Future Must Support Conservation and efficiency Commitment to technology development and deployment Coal options - Integrated gasification combined cycle - Advanced pulverized coal Natural gas - Integrated with fuel cells Nuclear power Renewable energy options Southern Company, DOE Coal Gasification Plant Test Model

19 The Bottom Line: Keeping the Lights On!

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