Clean Power: Now and in the Future

Clean Power: Now and in the Future

Defining Clean Power Only zero-emissions resources? Can fossil fuels be considered clean? Can a resource be defined as clean if it requires mining? Is clean used only in reference to CO2? Can an all-of-the-above energy strategy also be a clean energy strategy?

Defining the Future Tomorrow? Next year? 20 years?

U.S. Electricity Generation in 2015 Coal (33%) Natural gas (33%) Nuclear (20%) Hydropower (6%) Wind (4.7%) Solar (0.6%) Other (2.7%) Source: Energy Information Administration

Observations More than 2/3 of U.S. electricity currently comes from fossil fuels Nuclear is by far our largest non-carbon resource Wind and solar produce less than 6 percent of our energy Fossil Fuels Nuclear Hydropower Wind Solar Other Source: Energy Information Administration

Let s Start With the Basics Electricity is the only product in the world that is made, delivered and consumed in the same moment in time Mass battery storage currently infeasible Limited access to other storage options Constant balance of supply and demand

Society Wants Our Product To Be Better Electricity should be Reliable 100% of the time Affordable for 100% of the population 100% clean power Need to find the best balance of the 3

Other Considerations From a Utility s Perspective What about physics? Grid operations What about National Security? Fuel supply/disruptions Component materials 90% of rare earth metals for new tech produced in other countries

Types of Generation Baseload power is available for 24-7 demand Intermediate power plants cycle with demand Peaking power is available when demand is highest Intermittent power is available when supply allows

What Influences Generation Choices? Capital costs Operations, maintenance costs Environmental compliance and permitting Regulatory requirements How quickly it can be built Capacity factors Load shape Existing generation mix Consumer wants/options

Advantages Abundant fuel source Relatively inexpensive fuel source Reliable can operate 24-7 Mostly solved non-co2 emissions Coal Disadvantages New federal CO2 regulations cause uncertainty Environmentalist opposition Potentially difficult to finance

Future of Coal Regulation Clean Power Plan First-ever federal limits on CO2 Impacts states with significant coal resources 32% reduction in U.S. CO2 emissions by 2030 If overturned, new regulation will take its place

Future of Coal Technology Need to view CO2 as a product with value, not just a waste product Allam Cycle CO2 runs the turbine CO2 for enhanced oil recovery Product development Ethanol, biofuel, concrete additive, plastics, chemicals, etc.

Natural Gas Advantages Moderate capital costs Less emissions than coal Reliable, flexible operation Currently, natural gas is low-priced Disadvantages Costs have been historically volatile Currently at about $2.84 per MBtu Abundance of natural gas tied to fracking High methane emissions greenhouse gas

Future of Natural Gas Most utilities consider natural gas their top choice for future generation Beneficiary of current regulations Clean Power Plan forcing many utilities to switch from coal to natural gas Future fracking or methane regulations could impact supply and current low prices Need improvements to nation s pipeline infrastructure

Advantages No CO2 emissions Relatively low-cost fuel Reliable operation 24/7 Nuclear Disadvantages Very high capital cost Radioactive waste societal opposition Extremely difficult permitting and licensing process First new U.S. nuclear reactor in two decades began operating in 2016 (Watts Bar in Tennessee)

Needs society s support Needs federal backstop Technology needs time Future of Nuclear Private sector pushing small reactors (under 300 MW) *Source: Energy Information Administration, FY 2013

Advantages No fuel cost Low-cost energy to consumer No air emissions Reliable operation Hydro Disadvantages Affects fish and wildlife habitat Alters the natural flow of rivers Virtually no resources left to develop (some dams being removed)

Wind Advantages Renewable No air emissions Becoming cost-competitive Disadvantages Has intermittent production 40-50% capacity factor Need a lot of space for development Landowner opposition Migratory bird issues Requires backup generation

Solar Advantages Renewable No air emissions Disadvantages Still cost-prohibitive w/o subsidy Panels take a lot of space relative to energy produced Intermittent production (needs backup) Capacity factor: 15-18% in MN One week of production in Roseau, MN

What Would You Do as a CEO? No comprehensive national energy policy Regulatory uncertainty Each generation source has advantages and disadvantages Large investment decisions in short time frames Generation sources expected to last decades

Remember Society s Expectations Electricity should be Reliable 100% of the time Affordable for 100% of the population 100% clean power Need to find the best balance of the 3

Other Technologies on the Horizon Fuel cells Electric vehicles Batteries Hydrogen options Challenges size, scope, scale

Before we can have a Clean Power Future We should have a real dialogue to define Clean Power and Future Clean Coal Solar Future is Now! Tech Hydro Natural Gas Wind Nuclear 20-Year Plan

We Need an All-of-the-Above Energy Strategy All-of-the-above energy strategy is only way to meet society s expectations Intermittent resources alone cannot meet our 24-7 needs Technology will drive the future of clean power Fossil fuel plants will become even cleaner Intermittency issues are being addressed Let s keep all our options on the table

Thank you