IGCC

1
IGCC

• Integrated Gasification Combined Cycle

2
IGCC - Industry

• Coal based IGCC plants went through an important
  development stage during the 1990s
• Grew 50 from 1990-1999
• Currently growing at a rate of 10 per year
• Almost all coal power plants that are currently
  being installed are IGCC gasification plants

3
IGCC US Demonstration Plants

• Subsidized by DOE
• Tampa Electric, FL Texaco/GE
• Wabash River, West Terre Haute, IN
• Pinon Pine, Nevada

4
IGCC Variations

• Design integration plant efficiency, start-up
  time
• Gasifier Formats - Fixed Bed, Fluidized Bed,
  Entrained Flow
• Process operation temperature
• Mix of coal, oxygen and air
• Catalyst (i.e. Syngas can be used to make plastic)

5
IGCC Driving Forces

• Push towards ZERO emissions
• Global Warming
• High Natural Gas Prices

6
IGCC Benefits to Utilization

• Lower SO2, NOX, and CO2 emissions
• Half the volume of solid waste as a conventional
  coal plant
• Higher Thermal efficiency lower fuel costs
• Gasification uses less coal than burning to
  produce the same amount of power

7
IGCC Barriers to Market

• High capital costs relative to competing
  technologies
• Technological feasibility still in development
  demonstration phase
• Need more stringent environmental regulations
• Geographically, there is little room to build
  more coal burning plants - saturated

8
IGCC Cost Comparison

• IGCC 1,200-1,400 per kW
• Conventional coal-fired plant 1000 per kW
• Natural gas combined-cycle plant 500 per kW
• However, coal is much cheaper and more plentiful
  than gas

9
IGCC Technological Uncertainty

• No company is producing an IGCC as a single
  component
• Components are sold by different companies
• Higher financing costs
• Longer construction times

10
IGCC - Illinois

• Stephen Shaw
• Power Holdings of Illinois LLC
• Developing a Coal Gasification Facility in
  Jefferson County, southwest of Mount Vernon IL
• 2004 Started Planning
• 2007 Start Construction
• 2009 Completed Plant

11
IGCC Illinois Technology

• GE Gasification Technology
• Leader in Gasification Technology
• 100 Gasifiers in Operation
• 50 Market Share
• Entrained-flow Gasifier operate at higher
  temperatures, pulverized feed
• Oxygen blown highly integrated, less gas to
  clean

12
IGCC - Illinois Coal Mining

• Mine Mouth Gasification Facility
• Requires Opening a New Mine
• Uses 12,000 Tons of Illinois Coal Every Day 4
  Million Tons/Year
• IL Coal Btus Saudia Arabia Oil
• Clean Air Act Amendments of 1990 Too Much
  Sulfer in IL Coal
• 23 Coal Plants in IL Only 3 Use IL Coal

13
IGCC Illinois Facility Costs and Funding

• Current Estimated Cost is 1 Billion
• Clean Coal Review Board - 2.5 Million
• IL Dept. of Commerce and Economic Opportunity -
  500,000
• Possible 130 Million in Tax Credits and Loan
  Guarantees from Federal Govt.
• Financing Solid Business Model and Revenue
  Stream to Gain Capital Investors

14
IGCC Illinois Facility Production

• 50 Bcf of Synthetic Natural Gas Annually
• 5 of What Illinois Uses

15
IGCC Illinois Facility Specifics

• The plant makes O2
• Coal slurry is mixed with O2 in a metal cylinder
  lined with brick
• Placed under high pressure to create partial
  combustion
• Gas comes out the top
• Gunk comes out of the bottom and is used as a
  building materials
• Sulfur is scrubbed out of gas and used to make
  Sulfuric Acid

16
IGCC Illinois Facility Specifics (2)

• Remainder is Syngas CO and H2
• Syngas used to power turbine to create
  electricity
• Syngas is run through a nickel-based catalyst
  producing CH4 and H20
• CH4 (natural gas) goes right into pipeline to
  customers
• CO2, greenhouse gases, sequestered and stored
  underground

17
IGCC Illinois Legislation

• Senate Bill 90
• Consumer and Utility Benefits
• Price Cap - SNG Price 18-30 than Conventional
  Natural Gas
• Permits gas utilities to enter into 20-year
  supply contracts with any SNG producer - Per Se
  Prudent
• Producers can secure sales contracts to obtain
  project financing
• No State Subsidies or Added Cost to Ratepayers

18
IGCC Illinois Supply Contracts

• Working with the Illinois Commerce Commission
• 3 Utilities Ameren, Peoples and Nicor
• Each Utility gets 1/3 of SNG Produced
• Sales Contracts are Identical

19
IGCC Illinois Economic Benefits

• Natural Gas Expenditures Stay in the State
• Aggregate Economic Benefit - 7-10 Billion over
  the Life of the Project
• 1400 New Jobs 300 Mining, 150 Plant Facility,
  1000 Construction (3 Years)

20
IGCC American Electric Power (AEP) in Ohio

• Nations largest utility and biggest coal burner
• Depends on coal to generate about 70 of its
  electricity
• PUCO granted request to recover full cost of
  first phase of IGCC facility from ratepayers -
  23.7 million
• Phase one - finding other financing options, then
  AEP will apply to PUCO for full facility cost
  recovery from ratepayers

21
IGCC We Energies in Wisconsin

• Regulatory commission rejected proposal to
  include plant costs in rate base
• Reasons included uncertainty of technology
• IGCC is not a BACT in WI
• Based on cost analysis, commission preferred to
  build a conventional coal plant

22
IGCC Question of Motivation

• Push or Pull to Market
• Push Increased environmental regulation, require
  decrease in emissions
• Demand-side (i.e. California utilities may not
  purchase power from plants that produce more CO2
  than the latest natural gas plants

23
IGCC Question of Motivation (2)

• Pull Tax incentives, subsidies
• Incentives (i.e. Wyoming utilities get tax
  breaks for building coal gasification plants,
  construction credits)
• Utilities expect regulations they are just
  uncertain of when and what, so put them in place
  sooner than later, utilities need to be locked in
  to the future otherwise they will just keep
  building gas turbines

24
IGCC Illinois Motivation

• Entrepreneurship
• Revenue
• Public Interest