Enhancing Lignite’s Future Through Research & Development

1. Enhancing Lignite’s Future Through Research & Development Michael Jones Ph.D. Vice President, R&D Lignite Energy Council

2. Agenda • State-industry R&D partnership • Lignite resource • Current energy conversion technologies • Future energy conversion technologies • Emission Control Technologies • Summary • Lignite Jeopardy Game

3. Lignite Research Council’s R&D Program An Industry/Government Partnership State of North Dakota Lignite Energy Council Public / Private Partnership http://www.lignite.com/ResDev/index.htm http://www.nd.gov/ndic/lrc-infopage.htm

4. Cleaner Coal Technology Paths • Coal Cleaning • More efficient power plants • More effective technologies to reduce SO2, NOx, Hg & CO2 emissions

5. Leveraging State Dollars For every state dollar, six dollars is invested from industry & other sources in lignite-related R&D projects =

6. Active Lignite Research Projects Quick Review of Active Projects (24) • 1 LEC Lignite Vision 21 Program project • 3 Separate LV21P projects • 3 Mercury-related projects • 1 NOx-related project • 4 Lignite gasification-related projects • 8 CO2 Carbon Capture & Storage-related projects • 1 Regional marketing project (PAE) • 1 Lignite-fueled Ag production – Red Trail Project • 1 Coal combustion products projects • 1 Air toxic metals project – CATM

7. Agenda • State-industry R&D partnership • Lignite resource • Current energy conversion technologies • Future energy conversion technologies • Controlling emissions • Summary • Lignite Jeopardy Game

8. Future of Lignite • The resource: 800 year supply of lignite R&D holds the key to expanding lignite’s economic benefits

9. A Look at Lignite 55% Organic Matter C, H, O, S, N Lignite 35% 10% Inorganic Matter SiO2, Al2O3 -Clays, FeS2 Water

10. ND Lignite Consumption Specialty Products 7.5% Synthetic Natural Gas - 13.5% Electric Power Generation - 79%

11. Agenda • State-industry R&D partnership • Lignite resource • Current energy conversion technologies • Future energy conversion technologies • Controlling emissions • Summary • Lignite Jeopardy Game

12. Current Energy Conversion Technologies Pulverized Coal-Fired Boilers • 2400 PSI Steam; 1000ºF • Up to 600 MW/unit in ND • 30-32% Efficient

13. Current Energy Conversion Technologies Pulverized Coal-Fired Boilers Antelope Valley Station M.R. Young Station Coal Creek Station

14. Current Energy Conversion Technologies Pulverized Coal-Fired Boilers Coyote Station Leland Olds Station Stanton Station

15. Agenda • State-industry R&D partnership • Lignite resource • Current energy conversion technologies • Future energy conversion technologies • Controlling emissions • Summary • Lignite Jeopardy Game

16. Future Generating Technologies • Advanced Pulverized Coal • Oxy-fuel Combustion • Integrated Gasification Combined Cycle (IGCC)

17. Future Generating Technologies Supercritical Pulverized Coal Power Plant • 3500 PSI Steam; 1050ºF • Up to 1300 MW / unit • 35-40% Efficient

18. Future Generating Technologies Oxy-combustion • Technology consideration to capture CO2 • Energy penalty ~ 1/3 (450 MW Gross yields 300 MW Net) • First demonstrations underway in US and Europe

19. Future Generating Technologies IGCC • Up to 300 MW / Unit • 40-45% Efficient • Cost, availability & lack of lignite experience are issues

20. Future Generating Technologies Gasification End Products • Electric Power • Synthetic Natural Gas • Liquid Transportation Fuels • Hydrogen • Chemicals

21. Coal-to-Liquids • Headwaters Inc., North American Coal Corp. & Falkirk Mining Co. are exploring a coal-to-liquid fuels project near Underwood, ND • Will gasify coal and convert it into ultra-clean gasoline, LPG, propane & electricity • 12 million tons of coal to produce 30,000 barrels per day of gasoline • Conducting feasibility studies; next step is decision to conduct a front-end engineering & design study ($50+ million) • Construction start – 2012???; commercial start – 2015???

22. Coal-to-Hydrogen-Power • Great Northern Project Development is exploring a coal-to-hydrogen project near South Heart, ND • Will use ~2.4 million tons of lignite / year • To gasify lignite and convert it into hydrogen for use in combustion turbine • Conducting feasibility studies; about to move into a front-end engineering & design study ($30+ million) • Construction start – 2012???; commercial start – 2015???

23. Agenda • State-industry R&D partnership • Lignite resource • Current energy conversion technologies • Future energy conversion technologies • Controlling emissions • Summary • Lignite Jeopardy Game

24. Emission Control Technologies • Particulate Matter (PM) reduction >99.99% • Sulfur Dioxide (SO2) reduction >97% • Nitrogen Oxides (NOx) reduction 50% → > 90% goal • Mercury (Hg) reduction 50% -90% → > 90% goal • Carbon Dioxide (CO2) ??? %

25. Emission Control Technologies Baghouse Dry Scrubber Stack Coal Boiler Stack Overfire Air, low NOx, burners, injection of ammonia Electrostatic Precipitator Wet Scrubber

26. Capturing Mercury Is Difficult! Houston Astrodome A hypothetical example: • Dome filled with 30 billion ping pong balls • 30 mercury balls • Remove 27 balls for 90% Hg capture

27. Mercury Control Options Baghouse Dry Scrubber Stack Coal Activated Carbon & Oxidation Chemicals Oxidation Chemicals Boiler Stack Electrostatic Precipitator Wet Scrubber

28. Summary of CO2 Capture Technologies Absorption Adsorption Membranes Cryogenics Others Chemical Looping Chemical Chemical (TSA) Organic Amines Caustics Amino acid salts Others Polysulphone Cellulose derivatives Polymide Liquid Enzyme Others Metal oxides Metal organic frameworks Others CO2 Hydrates Physical Physical (PSA, TSA) Oxycombustion Inorganic Zeolites Activated Carbons Si/Al gels Microbial/ Algae Selexol Rectisol Ionic liquids Others Metallic Ceramics Others Carbon Capture R&D processes being explored by the National Energy Technology Laboratories

29. Carbon Capture Technologies EERC Oxyfuel / Amine Scrubbing Study (2/07) • Conclusions assuming 90% capture of CO2: • Amine scrubbing & oxyfuel models were developed and shared with industry • Amine scrubbing results in cost of electricity (COE) of 10.8 cents/kWh (4.6 cents/kWh without carbon capture) • Oxyfuel combustion results in COE of 10.9 cents/kWh (4.6 cents/kWh without carbon capture)

30. DOE CCS Program Goals By 2020, have available for commercial deployment technologies and best practices for achieving: • 90% CO2 capture • 99%+ storage permanence • < 10% increase in COE (pre-combustion capture) • < 35% increase in COE (post- and oxy-combustion)

31. Laboratory-Bench-Pilot Scale R&D Large-Scale Field Testing Full-Scale Demos Commercial Deployment 2008 2010 2012 2016 2020 2024 CO2 Capture Technology R&D Timeline

32. Carbon Management Initiatives NDIC Investment NDIC Funding Commitment • Carbon capture-related projects: • Carbozyme membrane technology           $260,000 • Partnership for CO2 capture                      300,000 • Canadian Clean Power Coalition                130,000 • AVS Carbon Capture FEED                    2,700,000 • Partnership for CO2 capture II 150,000 • Oxy-firing Alstom 550,000 • Evaluation of Novel CO2 Capture 50,000   $4,140,000  • Carbon storage-related projects: • PCOR Phase II                                       $720,000 • PCOR Phase III                                   2,400,000   $3,120,000 • Total CCS commitment  $7,260,000

33. Carbon Management Initiatives • Partnership for CO2 Capture • EERC project approved by LRC/NDIC – May 2008 • Develop & demonstrate a range of CO2 capture technologies to include pre-combustion, post-combustion & oxy-combustion technologies • $3.4 million project (DOE/EERC $2.4 M; Industry $750 K; NDIC $300 K) • Start date: 6/08; Completion date: 06/10 • Phase II, ~$2M, Start 7/10

34. Carbon Management Initiatives • Plains Carbon Dioxide Reduction Partnership (PCOR) • Phase I – Characterization of sources & sinks (2003-2005) • Phase II – Small-scale field validation tests (2005-2009) • Phase III – Large volume carbon storage test (2008-2017)

35. Carbon Management Initiatives • PCOR Phase III (2008-2017) • Large-scale demo projects over 10 years • Capturing CO2 from AVS & storage in geological formations • CO2 storage to include enhanced oil recovery & deep saline aquifer storage • DOE committed $67 million • NDIC committed $2.4 million – 2/08 • Total Project Cost (capture & storage) >$300 M

36. Carbon Management Initiatives Carbon Capture Project at AVS • Demonstration / commercialization project • AVS – two 450 MW units • 120 MW slipstream • Capture 90% of CO2 (Powerspan technology) • 57 MMSCF or 3,000 tons CO2 / day • CO2 to be used in enhanced oil recovery (EOR) in western North Dakota • FEED study in 2010 • Construction in 2011 ??? • Operational in 2014 ???

37. Carbon Sequestration - EOR

38. Carbon Management Initiatives Carbon Sequestration • SaskPower CO2 capture & storage project • $1.4 billion, 7-year demonstration project announced 2/27/08 • Partnership: Gov. of Canada, Gov. of Sask., SaskPower & industry • Project at Boundary Dam 150 MW Unit III (existing unit) • Designed to capture ~ 1 million tons CO2 / year • CO2 capture technology & vendor to be determined • CO2 to be used for EOR • Expected to be fully operational by 2015

39. Carbon Management Initiatives DOE Carbon Sequestration Program

40. Coal Drying Activity • As mined, lignite is approximately one-third moisture. This makes it uneconomical to transport by rail. However, a coal drying facility is now operational at Coal Creek Station that may make transporting lignite a more economical proposition. • The coal drying project has its roots in a simple experiment that you can simulate in the classroom.

41. Coal Drying Procedure • Weigh about 100 grams of lignite on a paper plate. • Place the coal onto a cookie sheet and place it in an oven set at its lowest temperature – 100 or 120F for four hours. • Reweigh the coal to determine the weight loss due to moisture and calculate the percent of moisture.

42. Coal Drying Procedure Alternative Drying Methods • Dry the lignite using the “waste” heat from a light bulb. This method will model Coal Creek’s use of waste heat from its boiler. • Simply place the lignite in a sunny window and let it dry. Weigh the sample each day until the weight is constant for two days.

43. Coal Drying Activity (Cont.) • Coal Creek pulverizes the coal prior to drying, so students can compare the rate of moisture loss and total amount of moisture lost between crushed and uncrushed coal. • Pulverized coal has greater surface area and should dry faster than coal in larger pieces.

44. Prototype Coal Dryer • Prototype model built adjacent to the plant (1/06) • Used waste heat to dry the coal after it was pulverized • Tests showed how much heat & time needed • Now 8 coal dryers have been installed to dry all of the coal (operational 12/09)

45. Lignite Exhaust Gas Bag House Fines Dryer Dried Coal Non Fluidized Waste Energy Coal Drying – Using Waste Heat • Less fuel • Less emissions • Less maintenance • More generation • Greater efficiency • Greater value of lignite

46. Coal Cleaning at the Mine • Air jigging and magnetic separation • Significantly improved overall quality • Increased heat content & reduced ash, Hg & S • Used in conjunction with Coal Creek and Antelope Valley Stations’ operations

47. Coal Technology R&D PathwaysCritical R&D Challenges to Near Zero Emissions From Coal Near Term Plants Future Plants PulverizedCoal Power Generation Improve Efficiencies Minimize Criteria Pollutants Minimize Water Usage Minimize Greenhouse Gases Advanced Coal Power and Multiple Products Improve Reliability Maximize Efficiencies Near Zero Criteria Pollutants Near Zero Water Usage Near Zero Greenhouse Gases Technology Bridge to Near Zero Emissions 2005 - 2025 2025 - 2050 Courtesy of NETL

48. Summary • U.S. needs more sources of energy & needs to lessen dependence on foreign sources • Lignite is a valuable source of energy & chemical products • R&D is critical in the wise use of this abundant resource

49. Questions? ???

50. Activity LIGNITE JEOPARDY GAME