GE Energy Addressing Tomorrow s Challenges Today Jack Duncan 2006 NJ Clean Energy Conference September 18, 2006
Here Today to Share What we are seeing and hearing What is being done And Most Importantly Illustrate how the choices we make today will help to shape the world we live in tomorrow Identify industry actions to effectively operate in a carbon constrained world 2
U.S. Historical Trends 1906-2005 1906 85.4 M +1.5 m/yr 1946 1986 2006 140 M +2.7 m/yr 240 M +2.5 m/yr 298 M +3.0 m/yr < 8% dwellings have power ~ 50% of farms powered <63 GW 665 GW 2487 bn kwh/yr >1000 GW First gas pump 25.8 million 26 mpg cars -1945 Mandated fuel 100,000 cars economy World s first practical airplane -05 Sound barrier is broken -47 10 year anniv Of Concorde 940 cars per thousand residents -05 642 million US flights boarded -05 Energy Information Administration; US Census Bureau; Natl Academy Engineering 3
The Need for Change and Choice Population growth 20% by 2020 Energy consumption 50% by 2020 Environmental impact? 4
What We re Seeing National 2005 Energy Bill Increased discussions on carbon value Continued reductions in NOx and SOx Proactive companies preparing today Regional Regional GHG Initiative moving forward CT, DE, ME, MD, NH, NJ, NY & VT New Jersey 22.5% Renewable Portfolio Standard by 2021 2.12% from solar with $300 MWh non-compliance penalty California AB 32 first-ever statewide caps on emissions RPS 20% by 2010; 33% by 2020 5
What We re Hearing We ll be living in a carbon constrained world Renewables will be part of the solution but only part Nuclear needed and becoming more likely in US; certain in China Grid congestion still a major issue Permitting remains a major challenge Technology needs to address requirements cost-effectively 6
What We re Doing 7
Ecomagination Commitments 1. 2. 3. 4. Increase R&D investment from $700MM to $1.5B by 2010 Grow revenues to $20B by 2010 by delivering customer value Improve our energy efficiency and lower our GHG emissions Keep the public informed on progress 8
Ecomagination at Energy Solar H System TM Jenbacher CMM Wind Cleaner Coal IGCC LMS100 9
Ecomagination at Energy Energy will spend $2.1B on ecomagination Solar technology developments H System TM between Jenbacher 2005 and 2010 CMM Energy ecomagination revenue to grow from $3.7B to ~ $10B by 2010 Wind Cleaner Coal IGCC LMS100 10
Ecomagination Customer Value Significantly and measurably improving Operating performance + Environmental performance 11
Informed by Customers 12
Informed by Governments and NGOs 13
Multiple Conversion Platforms Are Essential Total capacity additions GW (2006 2015) W. Europe E. Europe & FSU N. America China Middle East & Africa India Latin America Rest of Asia 10 Year Avg Annual Cap Adds (GW) Nuclear Renewable s Hydro Coal Gas/Oil TOTAL 8 21 24 35 59 146 Source: GE Energy Forecast 14
New Jersey Power Generation by Fuel Source Fuel consumption for power generated in New Jersey Hydro 0.1% Oil 3% Coal 19% NJ power consumption: 77,600 GWh NJ net generation: 55,900 GWh Nuclear 49% Natural Gas 29% 72% of power needed produced in state Average retail price for power 10.3 cents/kwh 2004 data, source: EIA 15
Addressing Energy Challenges Through Technology Rising fuel prices drive efficiency Fuel sourcing complexities & energy security drive diversity More stringent environmental standards drive renewables & emission reduction technology 16
Evolving Existing Platforms Continuing Investment is Critical Gas Nuclear Coal Combined Cycle Aero-derivative 520 MW 60% Efficient 100 MW 46% Efficient 1,600 MW GHG Emission Free 1,000 MW 47% Efficient 17
Cleaner Coal Technology Focused on energy security, CAPEX and emissions Converts coal to synthesis gas cleaned prior to burning Produces useful byproducts Driving down cost and emissions CAPEX approaching pulverized coal (pc) Emissions approaching natural gas Electricity Transmission & Distribution Gasifier Steam Turbine Sulfur Removal Future CO 2 Capture HRSG Gas Turbine Radiant Syngas Cooler Particulate Removal Mercury Removal 18
US Energy Dynamics LNG Key To Meeting Gas Demand 5 new North American regasification terminals constructed 38 in pipeline 5 Existing 19 Approved 19 Proposed Source: FERC as of 4 Jan 2006 19
Gas Turbine Technology LMS100 Simple cycle flexible power 45% thermal efficiency 10-minute fast starts Incredible hot day performance Load following and cycling capability without maintenance penalties Today Achieved commercial operation with Basin Electric in July 2006 367 hours of operation, 100 starts since entering revenue service 50Hz testing scheduled for Fall 2006 20
Biomass Another Alternative Converting waste into energy Bio power growth Global 16 Installed capacity Asia + ROW (GW) Europe 3.5 '02 '20 US Source: Frost&Sullivan http://ec.europa.eu/comm/energy_transport Non-Natural Gas Using gas that would otherwise be vented or flared Landfill Coal mine gas Wellhead flare gas
Wind Energy Why Wind? Cost competitive nearing mainstream in many regions Can be brought on-line quickly Free and renewable fuel source Can help to stabilize weak grid systems The fastest growing energy source over the past decade Offers global customers a practical solution for achieving renewable energy and/or emissions targets 22
US Wind Resource Map Wind Speed m/s > 8.5 7-8.5 6-7 5-6 < 5 @ 50m, sea level 23
Jersey-Atlantic Wind farm First wind farm in New Jersey first coastal wind farm in the country Developer: Community Energy, Inc. & Jersey-Atlantic Wind, LLC Location: ACUA Wastewater Treatment Plant, Atlantic City, New Jersey Includes five, 380 foot high, GE 1.5MW turbines Capable of producing 1.5 megawatts for a total of 7.5 megawatts, enough energy to power approximately 2,500 homes each year Operational since December 2005 24
Offshore Wind GE Demonstration Project Arklow, Ireland GE s technology demonstration site 7 GE 3.6s offshore wind turbines 25MW project capacity Expected to generate enough energy for ~16,000 homes Largest wind turbines commercially installed at sea 25
New Jersey A Leader in Solar Growth Strong annual growth greater than the industry s 30%-50%/year Statewide renewable energy credit program RPS commitment of 1500 MWs of solar to be installed in NJ by 2020 13MW installed through 3-06, leaving room for significant growth NJ Installation Growth 493 282 42 56 02 03 04 05 26
New Jersey Solar Installations - Residential GE Brilliance Solar Systems providing a package system solution Modules, inverters, mounting systems, industry leading warranty Typical residential installation >6 kw and produces ~7000kWh/year DOE estimates average NJ house uses 8400kWh/year an 83% reduction 27
New Jersey Solar Installations - Commercial Federated Department Stores Installing solar on several Macy's and Bloomingdales stores in New Jersey The first two store installations near completion Each facility will have grid tied systems of ~400 kw installed Emissions & environmental commitments by companies are increasingly becoming a standard business opportunity benefiting both the companies and the environment 28
Water Implications and Solutions Left unresolved water scarcity will: Slow/stop economic expansion (industrial, commercial and residential) Reduce agricultural output and food independence Degrade public health and quality of life GE Water Scarcity Solutions Sustainable fresh water supply via desalination Water conservation via reuse and reclamation Surge capacity or emergency water production 29
Waste Disposal Landfills Incineration Plasma Gasification Advantages Low cost solution Low tech, simple Issues Land usage Small volume reduction Off gas & odor Limited ability to handle hazardous materials Ground Water Pollution Emissions Difficult to control off gas Advantages Volume reduction (80:1) Ability to handle some hazardous materials Issues Higher cost then landfill Exhaust emissions Potentially hazardous & leachable ash Emissions Exhaust clean up possible but at a cost Some emissions are very difficult to remove Advantages High volume reduction (<200:1) Ability to handle most hazardous materials Non-leachable vitrified glass by-product Easier to clean syngas Issues Public perception that technology is incineration Emissions As clean as Natural Gas CO2 Neutral CO2 Capture Possible 30
Technology s Impact on the Rails 60% less smog producing pollutants (Tons of NOx/Loco/Yr) 96.5 36.5 1974 2005 83% fewer asthma causing particulates (Tons of NOx/Loco/Yr) 1.4 0.6 1974 2005 = 315,000 gal of fuel in a locomotive lifetime 31
Progress Through Technology Portfolio Diversity Need Balanced Approach Can't Be "Perfect Can Be "Better" 32
Need for Long Term Vision and Clear Policy Emission targets Clear & stable regulatory framework Incentives R&D support government & industry 33