Southern Company Carbon Management. Randall Rush, General Manager - Gasification Technology Roxann Laird, Director - National Carbon Capture Center

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1 Southern Company Carbon Management Randall Rush, General Manager - Gasification Technology Roxann Laird, Director - National Carbon Capture Center

2 Southern Company at a Glance US Category Value Rank Market Capitalization ($B) $40.3 2nd Enterprise Value ($B) $62.7 2nd Total Assets ($B) $59.3 2nd Electric Customers (M) 4.4 8th Summer Capacity (MW) 43,955 2nd Coal 20,426 Gas / Oil 16,912 Nuclear 3,644 Solar 46 Biomass 103 Hydro 2,824 Coal Usage (tons) 44,765 3rd Gas Usage (bcf) 600 3rd Transmission (miles) 26,874 3rd Distribution (miles) 167,853 5th 2011 Net Income Southern Power 7% Source: SNL & Energy Velocity Assets, customers, transmission, distribution and fuel usage data as of 12/31/2011 Ranking includes combined Duke/Progress Regulated 93%

3 Southern Company Strategic Priorities Complete Vogtle & Kemper Preserve and Enhance the Circle of Life Support Building of National Energy Policy Promote Smart Energy Value and Develop People

4 First New US Nuclear Plant in a Generation - Vogtle 3&4 Combined Construction & Operating License (COL) issued by NRC on Feb 10, 2012 Unit 3 COD 2016; Unit 4 COD 2017

5 Plant Ratcliffe IGCC in Kemper County, Mississippi Southern Company Proprietary TRIG Technology 15 years of development/demonstration 580MW Capacity with 65+% CO 2 capture CO 2 emissions ~equal to natural gas 3 MM TPY CO 2 for EOR COD: May 2014

6 Southern Company Engineering, Procurement & Construction (EPC) Capability Only US electric power company with in-house EPC capability (1,600 employees) Perform all EPC activities for Southern s fossil and hydro fleet Act as Owner s engineer for nuclear EPC Integrated strategy development, technology selection, EPC execution and operating fleet O&M lessons learned Deployed/managed over 72M construction man-hours, 2007 to Mid-2012 Highlights of construction project results since 2000: 11,200 MWs of new gas-fired generation at costs 35% below national average* 3,100 MWs of selective catalytic reduction (SCR) at costs 10% below national average* 3,800 MWs of flue gas desulfurization (FGD) at costs 18% below national average* * SCR Cost Construction Survey Results 2010 Electric Utility Cost Group (EUCG) survey Scrubber Cost Construction Survey Results 2009 Electric Utility Cost Group (EUCG) survey Industry database: All-in cost in nominal $, F Class 2x1 CCs > 500 MWs. Total database of 7000 MWs in AL, FL, LA, MS, SC for 2003COD.

7 Southern Company R&D Only US electric power company with internal R&D organization Approximately 150 centrally located engineers and scientists Laboratories dispersed across operating assets Active collaboration with other utilities Leveraged by external funding partners Research portfolio managed to provide hardened technology options Generation End Use Power Delivery Renewables R&D Areas

8 Recent Southern Company Projects with R&D Foundations Second Largest U.S. Solar Cimarron Solar Facility Smart Grid: Integrated Distribution Management System Water Research Center Georgia Power Plant Bowen U.S. first New Nuclear Georgia Power Plant Vogtle National Carbon Capture Center Wilsonville, Alabama Integrated Gasification Combined Cycle Mississippi Power Plant Ratcliffe Largest U.S. Biomass Nacogdoches Generating Facility Air Quality Science Center SEARCH network; ARIES; mercury Power Delivery and End-Use Technology Lab Mercury Research Center Gulf Power Plant Crist Start-to-finish 25-MW CCS Alabama Power Plant Barry

9 Southern Company s Technology Culture Recognizes that new technologies will address the difficult challenges ahead. Focused through a centralized R&D organization Belief that a broad technology portfolio brings multiple options to business decisions. Extensive external collaboration to ensure broad technical input and leverage resources. Adopt intellectual property positions that do not impede technology deployment. Stay focused on the most strategic issues.

10 Current Southern Company Projects Related to Carbon Capture, Use and Storage (CCUS) Biomineralization Study Coal Seam Injection Study Underground Carbon Injection 1 MW Solid Sorbent Pilot TRIG IGCC with CO 2 for EOR Groundwater Impacts Study National Carbon Capture Center CO 2 EOR Pilot Injection University Training Program Geologic Suitability Study Pilot Capture Demo 25 MW Post-Combustion CCUS UAB Cap Rock Lab

11 Coal is Expected to Remain a Major Part of Southern Company s Generation Mix Coal 71 % Oil < 1% Nuclear 15 % Gas 30 % Coal 52 % Gas 11 % Coal 41 % Hydro 3 % 2020 Hydro 2 % Nuclear 16 % Nuclear 19 % 100MM TPY CO 2 Gas 37 % Hydro/Other 3 % Projections subject to change.

12 Carbon Capture, Utilization and Storage (CCUS) through EOR is the Business Driver to Catalyze Continued Coal use for Power Generation Incremental Enhanced Oil Recovery Oil Recovery (barrels/day) (barrels/day) Production from CO 2 EOR has increased 40% over the past 6 years In 2010 it was 5% of total domestic production EOR is the highest-value, highest-volume use of CO 2 EOR could potentially use CO 2 from 60 GW of power plants with CCUS EOR will catalyze CCS technologies while providing economic drivers for commercial projects 300,000 JAF2010_031.XLS 250, ,000 GULF COAST/OTHER MID-CONTINENT ROCKY MOUNTAINS PERMIAN BASIN 150, ,000 50, Source: Advanced Resources Int l., based on Oil and Gas Journal, JAF PPT Source: Advanced Resources Int l. and Oil and Gas Journal, Year

13 U. S. EOR Opportunities EOR Potential: Rockies to Mississippi River 27.3 B bbls (Best Practice) to 39.5 B bbls (Next Gen) 61% to 79% of EOR resources 67% of favorable fields EOR Potential: Illinois-Michigan-Appalachia 0.6 B bbls (Best Practice) to 2.1 B bbls (Next Gen) 1% to 4% of EOR resources 13% of favorable fields EOR Potential: West of the Mississippi 32.7 B bbls (Best Practice) to 45.1 B bbls (Next Gen) 73% to 90% of EOR resources 76% of favorable fields 2 EOR Potential: Gulf Coast 2.2 B bbls (Best Practice) to 3.0B bbls (Next Gen) 5% to 6% of EOR resources 11% of favorable fields

14 Southern Power Unregulated Subsidiary Bilateral contract business model (80% contract coverage through 2016) Approximately 8,500 MW of capacity (98.5% natural gas), including 820MW to be completed in 2012 Expansion capability of approximately 9,000 MWs 18 MW SPC s 90% ownership share 27 MW SPC s 90% ownership share 720 MW 749 MW 463 MW CC/456 MW CT 1,143 MW 100 MW 1,256 MW 1,800 MW 597 MW 427 MW SPC s 65% ownership share 780 MW

15 25 MW Post-Combustion CCUS Demo at Alabama Power s Plant Barry World s largest carbon capture unit on a coal-fired power plant 90% CO 2 capture, approximately 150,000 TPY Evaluate performance in a coal environment June 2011 initial operations CO 2 Capture and Compression SCS/MHI collaboration with partners Transportation and Sequestration DOE SECARB Phase III Anthropogenic Test ~15 mile CO 2 pipeline to Citronelle Field Objectives/Goals Advance saline sequestration technology through large field test Characterize CCS operations to support full-scale deployment Continue outreach and education to ensure seamless deployment

16 National Carbon Capture Center Project Partners

17 NCCC Mission Offering a world-class neutral test facility and a highly specialized staff, to accelerate the commercialization of advanced technologies and enable coal (fossil fuel) - based power plants to achieve near-zero emissions (low cost CO 2 ). Post Combustion Pre Combustion/Gasification Oxy Combustion

18 Site Layout PSDF Post- Combustion

19 Technology Development Process Evaluate and Screen Technologies Analyze Data and Report Define Scope of Work with Technology Developer Operate according to Test Matrix Design and Construct

20 Post Combustion Carbon Capture Center (PC4) Coal Combustor Scrubber Scrubber PSTU 0.5 MWe 10 tpd CO 2 Bench Scale < 0.1 MWe < 2 tpd CO 2 Pilot Test Area 1 MWe 20 tpd CO 2

21 PC4 Design and Construction Initiated site preparation Completed design Awarded bids - major equipment Began fabrication of PSTU Started negotiations with developers Completed site preparation and installation of the PSTU and utility bridge Developed quality control procedures and analytical methods Established PSTU commissioning team

22 PC4 Testing Completed PSTU Pilot Bench MEA baseline test Commissioning, confirm design and validate data B&W Advanced solvent, support modeling Hitachi Advanced amine, preparation for pilot test Cansolv Advanced polyamine in preparation for demonstration Aker Mobile test unit, test emission control system, advanced amine solvent, longterm operations Codexis Enzyme module, encapsulation process MTR Pilot Test Area Membrane, long term testing, generate critical data to use in scale-up

23 PC4 Ongoing Tests/Future Plans PSTU Pilot Bench Chiyoda Advanced amine to establish commercial design Cansolv Advanced polyamine under simulated natural gas fired conditions MEA Test modified demister, conduct reclaimer tests BASF/Linde Novel amine solvent based process MTR Scale-up of membrane, long term operations Akermin Modular unit utilizing carbonic anhydrase enzyme with Pilot Test Area potassium carbonate MTR Membrane, long term testing, generate critical data to use in scale-up SSTU Slipstream Solvent Test Unit, test innovative solvents

24 Temperature (degf) Gasification Technology Feed System Development Particulate Removal Ash Removal Fuel Flexibility Sensor Development Automation 1,800 1,780 1,760 1,740 1,720 1,700 1,680 1, Time, hours

25 Pre-Combustion CO 2 Capture Gasifier Syngas Cooler Particulate Filtration 1,500 LB/HR SYNGAS HEADER PV TO ATMOSPHERIC SYNGAS COMBUSTOR PV FV STEAM SYNGAS FOR OTHER TESTING (FUEL CELLS, MEMBRANES, ETC.) FV FV Reactor A Reactor B Reactor C TO OTHER TESTING OR TO ATMOSPHERIC SYNGAS COMBUSTOR SYNGAS CONDITIONING UNIT FV = Flow Valve PV = Pressure Valve Syngas Cooler Bottle Gases FV FV CO2 Batch Reactor

26 Testing Completed/Ongoing Water Gas Shift Catalyst evaluating the effects of temperature, pressure, steam-to-co molar ratio, and space velocity. good mass balance High-temperature mercury sorbent CO 2 capture solvent advanced physical solvents confirm the CO 2 capture results with syngas evaluate the absorption and regeneration characteristics of H 2 S Gas Separation Membranes CO 2 capture sorbent features 4 sorbent reactors novel sorbent is mesoporous carbon-based materials modified with surface functional groups

27 Pre-Combustion Expansion MTR CO 2 membrane

28 Oxy-Combustion Based on the Transport Reactor Technology Adaptation of core technology from Kemper County IGCC Plant and National Carbon Capture Center for high CO 2 capture. An Environmentally Attractive Coal Based Technology Technology offers near zero emissions while burning coal, with emissions comparable to a natural gas combined cycle (a Power Plant with no Stack). An Economically Competitive Option for CO 2 Capture Technology is an alternative CO 2 capture technology with a projected lower cost of electricity than other coal and natural gas based alternatives for CO 2 capture.

29 National Carbon Capture Center Project Partners