“Pay Your Money and Take Your Choice”

1. IPED COAL POWER CONFERENCE Coal Generation Technology Options “Pay Your Money and Take Your Choice” presented by January 18-19, 2007 St. Petersburg, FL Richard Gendreau, P.E. R. W. Beck, Inc.

2. The Coal Paradox • On the One Hand: • Abundant • >250 years of reserves in the U.S. • 95% of U.S. fossil fuel reserves • Relatively cheap • On the Other Hand: • Capital-intensive • Higher emissions than other fossil fuels

3. Coal: Villain or Savior? It’s reality! Deal with it! (1) EU15: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom

4. 800-Pound Gorilla – CarbonEmissions

5. CO2 Abatement from Coal Carbon Dioxide Reduction Carbon Capture and Storage (CCS) Track 2 TRACK 2 - 95% Increased Efficiency, Biomass Cofiring, etc. Track 1 - 60% TRACK 1 - 23% Baseline Possible Now Time Medium Term Long Term 2020 2010

6. Coal Generation Technology Options • PC and CFB Technologies • Subcritical • Supercritical • Ultra-Supercritical • Oxyfuel Combustion • IGCC

7. Comparing Technology Efficiencies • HHV or Higher Heating Value (U.S., Australia) • LHV or Lower Heating Value (Europe, Asia) • LHV Efficiencies are 5% to 10% Higher than HHV • Other Factors • 3% to 5% point difference between U.S. and Europe

8. Pulverized Coal and CFB Technologies

9. Modern Pulverized Coal-Fired Power Plant

10. Drum and Once-Through Type Boilers

11. Mostly Drum Type Boilers in U.S. and Once-Through Type Boilers in Europe Lowest Capital and O&M Costs Flexible Operation High Availability Net Plant Efficiency (HHV) 35% to 37% (9,800 to 9,200 Btu/kWh) Subcritical Coal-Fired Power Plants

12. 5000/1400/1400/1400 5000/1300/1300/1300 5000/1200/1200/1200 4000/1110/1150 3500/1050/1050 2400/1050/1050 Increasing Cycle Efficiency 47 45 USC Efficiency, %, HHV Today 40 SC 37 1000 1200 1400 SH Steam Temperature, °F

13. Impact of Efficiency on CO2 Emissions Percent Reduction CO2 Reduction

14. Modern Supercritical Boilers • High Efficiency (38% to 41%) • Lower Fuel Costs • Low Specific Emissions (lb/kWh) • Variable (sliding) Pressure Operation to Low Loads • Good Steam Temperature Control Over the Load Range • Rapid Load Change and Startup • FOF Similar to Subcritical (~4%)

15. Ultra-Supercritical Technology • No Clear Definition, 4350 psia, 1112 ºF/1112 ºF (300 bar, 600 ºC/600 ºC) • Possible Efficiencies up to 46 Percent and Higher • Ongoing Materials Research and Development • High Nickel Alloys Will Be Required and Will Significantly Increase Cost

16. CFB Technology

17. CFB Technology is Mature • Fully Commercial Technology • Over 500 Units Worldwide • Units in Service for Over 28 Years • 300 MWe Units in Service • 460 MWe Supercritical Unit in Construction • Single 600 MWe Unit With Full Commercial Guarantees Being Offered • Subcritical and Supercritical Cycles • Demonstrated High Availability

18. Oxyfuel Combustion Technology

19. Oxyfuel Combustion

20. Integrated Gasification Combined-Cycle Technologies

21. 2C+ O2 → 2CO 2H2O → 2H2+ O2 H2+ S → H2S Integrated Gasification Combined-Cycle 2H2S+O2→ 2H2O + 2S

22. Advantages of IGCC Compared to SC PC • Efficiencies Comparable to Current Supercritical PC Technologies • Somewhat Lower Air Emissions • Lower Water Consumption • Lower Solid Waste • Potential to Capture CO2 at Lower Cost • Potential for Polygeneration – Including Production of Fertilizer and Transportation Fuels

23. IGCC Power Market Challenges • Unfamiliar Technology to Power Industry: “Chemical Plant,” not Combustion Boiler • Higher Capital and Operating Costs • Standard Designs and Guarantee Packages not yet Fully Developed • Reluctance to Assume Technology Risks • Lingering Availability/Reliability Concerns • Questions About Feasibility and Cost Using Low-rank Coals, Particularly PRB and Lignite • The 800-lb. Gorilla May Help to Change these Perceptions

24. Efficiency of Current Coal Technologies CFB (1) Subcritical PC (1) IGCC (1) Supercritical PC (1) Future IGCC USC 1. Bituminous Coal

25. “Clean Coal” Is Not an Oxymoron! Dramatically Reduced Emissions! Removal Efficiency

26. Escalating Power Plant Costs • Recent 700 MWe Supercritical Coal Project - $1,800 to $2,000/ kWh • AEP Announced – They are Searching for Ways to Reduce the Costs of Two 600-MW IGCC Plants It Wants to Build in Ohio & West Virginia. AEP had Placed Tentative Price Tags of $1.2 Billion to $1.3 Billion Each on the Two Plants, but a Long-awaited Study Found Project Costs Greatly Exceeded Previous Estimates.

27. Summary • The 800-Pound Gorilla is Driving Greater Interest and Development in Supercritical and Ultra-supercritical PC, IGCC, Oxyfuel, Carbon Capture and Other Technologies • Supercritical Technology is a Well Proven, Low-risk Technology with Efficiencies Approaching 41 Percent (8,300 Btu/kWh) Today with Bituminous Coals • Developments in New Materials are Expected to Increase USC Cycle Efficiencies above 45 Percent (<7,500 Btu/kWh) in the Coming Years

28. Summary • Gasification and Related Processes Have Been Used Successfully for Decades in the Process and Petrochemical Industries • The COE from Currently Offered IGCC Technology is Generally Estimated to be 10% to 20% Higher than the COE from PC. This Difference is Greater with Low Ranked Coals, Such as, PRB and Lignite. • Broad Acceptance of IGCC Technology in the Power Industry Awaits the Completion and Operation of Currently Planned IGCC Projects.

29. Summary • Carbon Capture from Coal Gasification Derived Syngas is Commercially Mature • Oxyfuel and Other Technologies are Under Development to Reduce the Cost of Carbon Capture from PC and CFB Technologies • But at What Cost?!!!!!

30. The 800-Pound Gorilla?

31. IPED COAL POWER CONFERENCE Questions Richard Gendreau, P.E. R. W. Beck, Inc. rgendreau@rwbeck.com (508) 935-1810

32. Gasification Basics

33. Gasification Basics