Power Speech by Bob McIlvaine

1. PowerSpeech by Bob McIlvaine Valve World Expo June 25 2013 McIlvaine Company Northfield, IL

2. Power Valve Revenues $ millions-type

3. Power Valve Revenues $millions-region

4. East Asia Power Valve Revenues $ millions-type

5. East Asia Power Valve Revenues $ millions-country

6. Many Routes to Clean Coal • A combination of coal and biomass can be burned in an oxy combustion system. All the gases (CO2) are sequestered and used for enhanced oil recovery. • There are no emissions and there is a net reduction in the world’s CO2 in the atmosphere for every unit of energy generated. • If combustion takes place at the pressures experienced by separating the oxygen from the air, there are multiple benefits including total parasitic energy reduction.

7. The co-location of sewage treatment plants and coal-fired generators should be the wave of the future.  • Many of the old coal-fired power plants are located in areas where there is a need to dispose of large quantities of municipal solid waste.  This waste can be gasified and used as a reburn fuel in coal-fired boilers • Rare earths can be extracted from flyash. Sulfuric acid, hydrochloric acid, magnesium hydroxide and gypsum can all be economically produced along with power

8. Huge coal fired retrofit and upgrade market in the U.S. and Europe • Improving efficiency , reducing operating costs and meeting environmental regulations will result in a huge retrofit and upgrade investment at coal fired power plants in the U.S. and Europe. • Despite the low cost of natural gas at present, DOE predicts the U.S. will burn more coal in 2035 than at present. Coal consumption at European  utilities is up by substantially this year. • Coal is proving much more economical than alternatives in Europe.  Therefore there is a great incentive to burn coal cleanly and economically.

9. Power (coal-fired supercritical) • Coal-fired power provides the largest market opportunity for valves, in terms of total dollar spend per industry. • Power plants offer wide opportunities for valves because of the involvement of water, steam, slurries, and chemicals. • The Total Investment Value (TIV) for an advanced (supercritical) coal-fired power plant is in the range of $2.4-billion per plant.

10. 2000 Industrial Boilers Will Spend Between $4 and $12 Billion to Meet the New Industrial Boiler MACT Rule • In the next few months, operators of industrial boilers will have to decide whether to gamble on low gas prices for the next two decades or add air pollution control equipment to their existing systems. • There are more than 10,000 industrial boilers in the U.S. • Less than 2000 will fall under the criteria for action set up by the new Industrial Boiler MACT rule • Of these 2000 units, only 500 units will have to make major capital expenditures. • A survey conducted by URS and funded by the Council of Industrial Boiler owners found that to meet the new limits coal-fired boilers would have to spend $5.6 billon. Liquid-fired units would have to spend $5.2 billion and biomass and other units would spend $1.2 billion.

11. Nuclear Valve Types • Valve types used in nuclear plants Nuclear power plants of either PWR or BWR design include more than 5,000 valves per installation. • The valve applications include safety, control, and isolation functions, among others. • More than 500 valves are classified as “safety” valves, with the balance classified as “non-safety”. • These valves reflect virtually all valve types and sizes including ball, gate, globe, butterfly, check, plug, poppet, squib, and others. • Valve sizes range from fractions of a gallon per minute for chemical feed regulation to many thousands of gallons per minute for controlling reactor cooling and condenser cooling.

12. Nuclear valve applications • Valve applications are found in the “nuclear island” which includes the reactor building, and in other locations in the “balance-of-plant” outside the reactor building. • In the US and other markets, valves within the nuclear island must conform to stringent design, performance, and safety criteria established by various bodies including the American Society of Mechanical Engineers (ASME) and others. • Other national and international regulatory bodies exist, and may be operative for reactors built and installed outside the United States.

13. Valves in the Nuclear Island • Major valve systems within the nuclear island, and specifically related to the reactor coolant system include: • Pressurizer safety valves • Automatic depressurization valves • Pressurizer spray valves • Backup cooling water valves • These valve systems are often supplied in pre-fabricated skidded systems to support standardization, reduce installation time and simplify piping. Their main function is to ensure adequate cooling for the reactor under all conditions. • Each valve is critical to plant operation and safety.

14. Balance-of-Plant Valves • Balance of plant valves are located outside the nuclear reactor containment building and provide basic functions of safety, pressure relief, control, and isolation for equipment in the water/steam systems. Major valve systems include: • Main steam safety valves(MSSV) • Main steam isolation valves (MSIV) • Main steam relief valves • Turbine bypass valves • Feedwater pump control and recirculation valves • Heater drain valves • Condensate recirculation valves • De-aerator level control valves (DALC), and • General pump and tank isolation valves, among others

15. Power (nuclear) • New nuclear construction is on hold or prohibited in major markets following the Fukushima accident in Japan. Japan and major countries within Europe have a moratorium on new nuclear builds, and in some cases are planning for early retirement of existing nuclear plants. The Fukushima accident is a driver for alternative electric utility fuel sources including natural gas, wind, and solar. The number of new nuclear plants coming on line in the next several years will likely be in the range of 7 to 10 at most, mainly in China, India, Russia, and Poland. There were just (2) new nuclear startups in 2012. • The Total Investment Value (TIV) for a new nuclear power plant is in the range of $6-billion per plant.

16. Power (combined cycle gas turbine, CCGT) • Natural gas combined cycle power generation is growing. Major drivers include efficiencies beyond 60% for the latest generation plants, record low prices and record high availability for natural gas fuel, and short construction cycles. The rapid ramp up/ramp down capabilities for gas turbines also make this power source an ideal backup for intermittent renewable energy systems based on wind or solar power. Sizes are available to meet peak and base-load requirements. • The Total Investment Value (TIV) for CCGT systems is in the range of $750-million for a 600 MW plant, but will vary substantially based on plant MW rating which can cover a wide range depending on the number of gas turbines and heat recovery steam generators (HRSGs).

17. Power (simple cycle gas turbine) • The simple cycle gas turbine (without heat recovery steam generation) is widely applied for peaking power applications. • The Total Investment Value (TIV) for a simple cycle gas turbine system is in the range of $150-million per plant.