Energy & Technology: Global Interconnections

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1 Energy & Technology: Global Interconnections NCSL Task Force on Energy Supply May 18, 212 Denver, CO Chris Hansen

2 North American Full-Cycle Unit Cost of New Supply 212, Includes NGLs Credit Dollars per Mcf 5 Weighted Average $3.54 per Mcf Bcf per day Natural gas liquids and oil revenue is reducing the effective cost of natural gas. Further work needs to be done on capital cost. Interaction with oil drilling may raise capital costs. Source: IHS CERA. NAG_RT_5912_Houston 2

3 Large Inventory of Proposed Projects, All Planned for a Pre-225 Start-Up, but High Uncertainty LNG Capacity by Status and Country Australia Qatar Indonesia Algeria Malaysia Nigeria Trinidad Egypt Oman Russia Brunei Yemen Papua New Guinea Abu Dhabi Angola Peru Norway Equatorial Guinea Libya USA Canada Iran Mozambique Iraq Cameroon Brazil Venezuela Israel Tanzania??? Source: IHS CERA, March Million Tons per Year Existing Proposed Committed N.B. An inventory of projects not a projection Proposed projects have varying degrees of likelihood 3

4 Power Sector Outlook

5 North American Power Capacity Additions, 2 2 United States (191 GW) Canada (35 GW) Other 4% Other 1% Solar 12% Gas CC 25% Solar 9% Gas CC 8% Gas CT 13% Coal 3% Wind 36% Gas CT % Wind 39% Nuclear 16% Coal 6% Nuclear 6% Hydro % Hydro % Sources: IHS CERA and Ventyx Velocity Suite. Note: CC = combined cycle; CT = combustion turbine. 5

6 Share of US Power Generation Is Changing 1% 9% 8% Renewable/Other Hydro Nuclear 7% 6% Oil Natural Gas 5% 4% 3% 2% Coal 1% % Source: IHS CERA and US Energy Information Administration. Source: IHS CERA and US Energy Information Administration. 6

7 Global Power Equipment Markets China is emerging as a more dominant player in the power equipment markets from solar to nuclear. This position is evolving on both the demand side as well as the supply chain side and covering most fuels with gas being the only current exception. The demand for new gas plants, which is the default choice for new investment in advanced countries, has been pushed out due to low economic growth and plant retirement delays. Current activity for gas plants is primarily for smaller peaker plants or overseas installations. 7

8 Capacity Rating (MW) Renewable Energy in a Gas-Rich Power Market Wind Turbine Technology Trends Vestas, Gamesa, Dewind GE, Acciona, Goldwind Siemens Acciona GE Market Trajectory GE Vestas Siemens Gamesa Mitsubishi Clipper Suzlon Acciona DeWind REpower Nordex Northern Power Goldwind Alstom Rotor Size (meters) Note: OEMs added to exhibits where similar rotor sizes overlap and may not be visible within exhibit Source: IHS Emerging Energy Research OEMs are rapidly introducing new products aimed at increased efficiency and overall cost reduction 212, IHS Inc. No portion of this presentation may be reproduced, reused, or otherwise Page distributed 8 in any form without prior written consent.

9 Wind Manufacturers Orders Megawatt 4,5 4, 3,5 3, Wind Power Sector Orders Wind Manufacturers Orders Vestas Gamesa GE Wind Total 2,5 2, 1,5 1, Source: IHS CERA, Vestas (based on orders in megawatts [MW]), Gamesa, (based on megawatts sold), GE Wind (based on number of wind turbines ordered time 1.6MW). 9

10 Vestas Global Orders Flat to falling orders Vestas Orders by Region VESTAS - Orders Megawatt 3,5 3, 2,5 2, Not specified APAC AMERICAS EMEA 1,5 1, Source: IHS CERA, Vestas. Note: APAC = Asia, Pacific; EMEA = Europe, Middle East, Africa. 1

4 2 Solar Manufacturers Results -2 Large losses -4-6 -8 Solar Manufacturers Revenue 8 8 8 8 9 First Solar Suntech Sunpower Trina Solar Aggregate 9 9 9 1 Revenue $ Million 6 4 2 1, 1 1 8 1 Solar

11 4 2 Solar Manufacturers Results -2 Large losses Solar Manufacturers Revenue First Solar Suntech Sunpower Trina Solar Aggregate Revenue $ Million , Solar Manufacturers - Income , Aggregate Revenue $ Million Solar Manufacturers Net Income Net Income $ Million First Solar (Net Sales) Suntech (Revenue) Sunpower (Revenue) Trina Solar (Revenue) Total Aggregate Net Income $ Million First Solar Suntech Sunpower Trina Solar Aggregate Source: IHS CERA, First Solar (net sales), Suntech, Sunpower, Trina Solar (Operating Income).

12 Technology Snapshot: Advanced CT and CCGT

13 Advanced CT and CCGT: Key Messages State of the technology Combustion turbine (CT) based power generation (SC and CC) is a mature technology. Dramatic efficiency gains are no longer possible without the use of more expensive turbine materials, though further improvement in turbine flexibility appears possible Four major Original Equipment Manufacturers (OEMs) dominate the global CT market for power generation applications: General Electric (GE), Siemens, Mitsubishi Heavy Industries, LTD. (MHI), and Alstom Current innovations include single-crystal alloys, thermal barrier coatings (TBC), higher inlet temperatures (up to 1,6 C), and new firing techniques to minimize NO x emissions. Recently announced combined-cycle configurations promise greater flexibility and thermal efficiencies exceeding 6% Policy/R&D support US R&D funding has slowed. Past R&D focus from the US Department of Energy (DOE) programs and OEMs improved thermal efficiency from 58% to 6% Japan's Ministry of Economy, Trade and Industry is promoting development of the technology for high-efficiency 1,7 C inlet temperature gas turbines Cost and performance A combination of high thermal efficiency and low natural gas prices (shale gale) has made CCGT the benchmark technology for new North American capacity additions from both a cost and emission profile standpoint Source: IHS CERA 13

14 Advanced CT and CCGT: Major OEMs Technology Advances Major Turbine Key Technology Advancement Output Thermal Efficiency* OEMs Advanced CT and CCGT GE FlexEfficiency 5 Combined-Cycle Power Plant Note: *Claimed. H System OpFlex Auto Tune Control System LMS1 Gas Turbine FlexAero LM6- PH Introduced in 2, based on 9FB 5 Hz unit, high thermal efficiency, 5 MW per minute ramp rate. Marketed for quick response to facilitate renewable power integration GE s H-class CC system, larger and more efficient than F-class technology. Installations include 23 Baglan Bay, South Wales, UK (5 Hz) 27 TEPCO's Futtsu-4 plant, Japan (5 Hz) 28 Inland Empire Energy Center, US/CA (6 Hz) Control system enhancement for 7FA turbines. Enables real-time tuning of the combustion turbine to maintain emission levels and improve reliability. LMS1 design combines elements of GE s aeroderivative LM6 and frame units. First unit entered commercial operation in 26. Startup 1 minutes for SC Introduced in 2, latest generation of GE s LM6 aeroderivative unit. Startup 1 minute for SC, with 5 minute fast start capability. 5 MW per minute ramp rate. Marketed for quick response to facilitate renewable power integration 51 MW 61% CC efficiency (6,4 Btu per kwh HHV net ) 52 MW (5 Hz) 4 MW (6 Hz) N/A 6% CC efficiency (6,5 Btu per kwh HHV net) N/A 1 MW 44% SC efficiency (8,75 Btu per kwh HHV net) 5 MW 42% SC efficiency (9,15 Btu per kwh HHV net) 14

Advanced CT and CCGT: Major OEMs Technology Advances (continued) Major OEMs Turbine Key Technology Advancement Output Thermal Efficiency* Advanced CT and CCGT Siemens SGT5-8H Siemens H-class turbine.

15 Advanced CT and CCGT: Major OEMs Technology Advances (continued) Major OEMs Turbine Key Technology Advancement Output Thermal Efficiency* Advanced CT and CCGT Siemens SGT5-8H Siemens H-class turbine. Capacity of 4 MW in SC and over 5 MW in CC. Fast starting 5 MW of CC capacity within 3 minutes, ramp capability of 35 MW per minute. First US orders slated for 212 delivery MHI J-Series Gas Turbines (6-Hz M51J) Introduced in 2, MHI s J-series has a turbine inlet temperature of 1,6 C (1 C higher than the G-series turbine). 32 MW SC and 46 MW CC. First shipments targeted for 214 Alstom KA26 CCGT Introduced in 2, Alstom s new 5 Hz unit is currently being tested in Birr, Switzerland. Fast starting less than 3 minutes in CC. Low load operation to 2% of CC capacity 561 MW 6.75% CC efficiency (6,45 Btu per kwh HHV net) 46 MW 6% CC efficiency (6,5 Btu per kwh HHV net) over 5 MW 61% CC efficiency (6,4 Btu per kwh HHV net) Note: *Claimed. 15

16 Technology Snapshot: Small Modular Reactors

17 Small Modular Reactors: Government Support State of the technology The desire for low-carbon generation has renewed interest in small modular reactors (SMRs). SMRs are nuclear reactors with less than 3 megawatts (MW) of capacity. The technology offers the advantage of factory production and less complicated equipment delivery as reactors are railed or trucked preassembled. IHS CERA expects SMRs to come online after 22. United States China US Department of Energy (DOE) announced in January that it is seeking applications for two grants, estimated to total $452 million over five years. The funds will pay up to half the cost of developing and deploying up to two small modular reactor designs. China has developed a high-temperature gas-cooled reactor with pebble-bed technology (HTR- PM), and a 21 MWe unit is to be installed by 22. The Institute of Nuclear and New Energy Technology (INET) began research on the HTR-PM in the early 199s, and in 23 a 1 MW thermal demonstration reactor reached full power. Source: IHS CERA 17

18 SMR Design Certification Applications Expected to Be Submitted to NRC for Licensing Technology Type Reactor Size of Reactor (MWe) Developer Expected NRC Design Certification Application Fueling Cycle (years) mpower 16 Babcock & Wilcox Light Water Reactors NuScale 45 NuScale Power* Westinghouse SMR 2 Westinghouse TBD 2 Liquid Metal- Cooled and Fast Reactors 4S 1 Toshiba Hyperion 25 Hyperion Power Generation TBD 7 1 PRISM 3 GE-Hitachi TBD 1 2 High-Temperature Gas-Cooled Reactors TBD TBD US Department of Energy (NGNP) 213 TBD Source: IHS CERA and the Nuclear Regulatory Commission (NRC). Notes: 4S = Super-Safe, Small, and Simple; NGNP = Next Generation Nuclear Plant; PRISM = Power Reactor Innovative Small Module; TBD = to be determined. *On October 13, 2, Fluor Corporation become majority investor in NuScale Power. Small Modular Reactors 18

com Calgary Toronto London San Francisco Cambridge, MA Denver Washington, DC Houston Mexico City Oslo

19 For more information about this presentation or IHS, please contact: Chris Hansen, PhD Director, Corporate Strategy Calgary Toronto London San Francisco Cambridge, MA Denver Washington, DC Houston Mexico City Oslo Paris Moscow Dubai Mumbai Beijing Tokyo Shanghai Bangkok Singapore Rio de Janeiro Johannesburg Perth Copyright 2 IHS Inc. All Rights Reserved. Company Confidential 19

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