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BTU-Hungry World

Nemacolin Energy Institute 2nd Annual National Coal Conference April 23, 2013 Hal Quinn President & CEO National Mining Association. BTU-Hungry World. Developing Economies Will account for 80% Global GDP by 2050. Energy Intensities

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BTU-Hungry World

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  1. Nemacolin Energy Institute2nd Annual National Coal ConferenceApril 23, 2013Hal Quinn President & CEO National Mining Association

  2. BTU-Hungry World Developing Economies Will account for 80% Global GDP by 2050 Energy Intensities Remain just a fraction of developed economies China Only part of the story unfolding

  3. Scale and Pace of Developing World Urbanization • By 2020, developing countries will account for almost 80% of the world’s total urban population • The global growth is equal to adding the population of Mumbai every second month or Shanghai every third +950 +750 2030 Source: McKinsey & Company

  4. Coal Becomes World’s Primary EnergySource

  5. Growing Opportunities: US Coal Exports • State-by-State coal exports economic analysis • Includes total jobs, gross value added, tonnage, capacity, employee compensation, and forecasting. • Educate policy makers on the coal leasing program and the benchmark process for royalty payments. • Advocate for new and expanded port capacity across the United States Policies that enhance competitiveness of U.S. coal exports • New and expanded export capacity nationwide • Regulatory streamlining for mine-to-market infrastructure Economic and trade benefits of increased U.S. coal exports • High-wage job creation throughout national and regional supply chain • Positive contribution to U.S. balance of trade • Fueling growth of emerging economies and creating demand for U.S. products

  6. Domestic Coal: Directional Assessment • Energy Economics • Politics and Policy • Coal Repositions • Coal Rebounds

  7. Projected Coal Plant Retirements as a Percentage of Total Capacity by Region - 2020 4.4% 30.3% 21% 7.4% 36.8% Nationwide Retirements: 68 GW 20% of capacity/14% of 2012 generation Source: EVA, NMA

  8. Higher Capacity Factors for Remaining Plants Offset Retirements U.S. Coal Plant Utilization (Remaining 277 gigawatts) 68 GW 66% Source: EVA, NMA

  9. Coal Fleet Size • Smaller units (<300MW) comprise 75% of the retirements • Almost 75% of the remaining coal fleet will be larger than 500 MW Source: EVA

  10. Coal Fleet Age • By 2020— • 65% of the existing coal fleet is >40 years old • Youngest segment (<30 years) drops to 13% of entire fleet Source: EVA

  11. Coal Fleet Heat Rate (MMBtu/MWh) • Emission Profile • (#/MWh) • SO2: - 25 % • NOx: -11 % Source: EVA

  12. Situation Assessment • Coal fleet shrinks—but • Larger units predominate (~75% > 500MW) • Higher utilization rates = increased coal generation • New controls improve fleet emissions profile • Fleet continues to age • Aging fleet vulnerable to next round of EPA rules: • GHG NSPS standards for New Plants • GHG NSPS guidance for Existing Plants

  13. Greenhouse Gas Regulations

  14. Coal Retirements & Incremental Natural Gas Supply (AEO’12er Reference Case - Indexed to 2011) Lower 48 Unconventional (Shale-gas)(Shale-gas only growth (6.7 Tcf); Gas to replace generation from known (~32GW) coal retirements(1.35 Tcf by 2020) Gas to replace generation from additional (~36GW) coal retirements (3.1 Tcf by 2030) Indexed to show growth from 2011 Tcf Net Domestic Supply Increment +1.6Tcf(2035 vs. 2011) +0.6 Tcf(2020 vs. 2011) Net LNG Imports Alaska Lower 48 Conventional Net Pipeline Imports Source: EIA, AEO’12 early release, Reference Case . Notes: Gas replacement based on 2007 (pre-recession) electricity generation from units already announced for retirement to 2020 (appx 32 GW) and an additional 36 GW of units past 2020 at high risk for retirement based on anticipated non-CO2 regulatory environment identified by NETL

  15. Technology Solutions vs. Fuel Bridges

  16. .

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