A Utility s Perspective on Environmental Compliance

Transcription

1 A Utility s Perspective on Environmental Compliance Fuel Services Rob Hardman Director, Coal Services Southern Company April 14, 2011

2 Discussion Topics Decisions we have made Generation investments for the future Decisions we are making Economically run the fleet Decisions we have left to make Retrofit / repower / retire / replace 2

3 Burn, Million Tons Total fossil fuel budget Coal: $3.2 B Transportation: $1.5 B Southern Company Overview $6.6 B SO: The second largest US consumer of coal 65 million tons burned in 2010 PRB, CAPP, SAPP, IB, Import, Western Operates 21 coal plants (65 units) with ~23,000 MW of generating capacity Scrubbers - 55% SCRs - 50% Baghouses - 14% Environmental construction continues By 2015, ~75% of coal capacity will be equipped with scrubbers and SCR s Annual Coal Burn 3 3

4 Decisions Made: Investments in New Generation Nacogdoches Biomass Facility Nacogdoches, TX 100 MW June 2012 Cimarron Solar Project Cimarron, NM 30 MW PPA with Turner Renewable Energy Operational Dec 2010 McDonough CC Units (3) Atlanta, GA 840 MW each Jan 2012, May 2012, Jan Vogtle Unit 3 and 4 Waynesboro, GA 2,200 MW April 2016, April 2017

5 Decision Made: Investments in New Generation Plant Ratcliffe - Integrated Gasification Combined Cycle Kemper County, MS 590 MW May 2014 $2.4 billion Water Treatment Lignite Delivery System Combined Cycle Plant Gasifier CO 2 & H 2 S Capture Lignite Drying & Milling Sulfuric Acid Production Ammonia Production Area 5

6 Energy Cost ($ / MWh) Decision Being Made: Burn More Gas Natural Gas Coal Coal Gas Comparison Southeastern United States Coal unit CAPP coal SCR + scrubber Rail delivered Combined cycle gas unit Forward price curves Natural Gas Central App Coal 6

7 Decision Being Made: Burn More Gas Record gas burns - 10 of the last 12 months Annual Gas Burns 2009 = 301 bcf 2010 = 362 bcf 1 st 1 st 1 st 1 st 1 st 1 st 1 st 1 st 1 st 1 st 100 bcf = 6-7 million tons of coal Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

8 Coal Inventories Record levels in 2009 Improved in 2010 Back to normal end of 2011 Pre-2008 Coal Inventory December Coal Inventory 8

9 Decisions to Make: Environmental Compliance Past decisions Fuel $ Capital Investment $ Operational Flexibility $ Coal Fuel $ Capital Investment $ Operational Flexibility $ Gas 9

10 Decisions to Make: Environmental Timetable Action EGU MACT Final Rule MACT Rule Compliance for existing sources Criteria Pollutants (NO 2, SO 2, Ozone, PM) New or Revised Standards Current Clean Air Interstate Rule (CAIR) Clean Air Transport Rule 1 Phase I Compliance Clean Air Transport Rule 1 Phase II Compliance NAAQS SIP Compliance Clean Air Transport Rule 2 Compliance Coal Combustion By-products Final Rule CCB Rule Compliance Water 316 (b) New Guidelines Final Rule 316 (b) Final Rule (b) (b) Rule Rule Compliance Effluent Guidelines Compliance 10 Greenhouse Gases (GHG Reporting Rule; Permitting Requirements; Performance Standards) Final Rule EPA GHG Reporting Rule Compliance Compliance with New GHG Rules

11 Decisions to Make: EGU MACT Proposal Proposal released March 16 th no big surprises Final due by November 16 th New Coal Existing Coal Hg, PM and HCl are key Significant control additions Challenging timeline Likely retirement driver EPA analyzes rule in isolation The rest of the story Ash, Water, SO 2, NO x, GHG, etc. 11

12 25000 Decisions to Make: An Eastern US Challenge Southern AEP Duke Ameren TVA Dominion Allegheny 12 From CRA, EIA and SEC data and analyses.

13 Decisions to Make: Environmental Compliance Current decision Fuel $ Capital Investment $ Operational Flexibility $ Compliance Certainty $ Coal Fuel $ Capital Investment $ Operational Flexibility $ Compliance Certainty $ Gas Coal 13

14 Decision, Decisions, Decisions 2011 year of decisions Decisions made Continue to build a diverse portfolio of generation assets Decisions being made Run the fleet for the customer Decisions to make Choice: control/run or retire/replace/repower Cost assumptions on operations and control decisions Transportation is a significant component of cost Competition for coal: gas and environmental compliance 14

15 Fuel Services Questions?