1 Viability of Carbon Capture and Sequestration Retrofits

1 Viability of Carbon Capture and Sequestration Retrofits for Existing Coalfired Power Plants under an Emission Trading Scheme CEDM Annual Meeting May 24, 2016 Shuchi Talati Ph. D. | Engineering and Public Policy

2 Introduction The Clean Power Plan: Finalized CO 2 Emission Performance Standards for Existing Fossil Fuel-Fired EGUs Commences in 2022; 32 percent reduction in power plant CO 2 emissions from 2005 levels by 2030 Target rates based on BSER - 3 building blocks Heat Rate Improvement at coal EGUs Increased NGCC generation Increased use of renewables No carbon capture & sequestration (CCS) IPCC finds that the cost to keep atmospheric CO 2 concentration below 450 ppm would be 138% higher without CCS Retrofits will promote learning for the technology

3 Introduction Choices for state plan (1) Form of Standard Rate vs Mass (2) Approach Uniform national EPS State goal rate Use of trading Emission Rate Credits (ERCs) EPA CPP State Plan Decision Tree (2015)

4 Methods IECM modeling of 18 feasible Coal-Fired EGUs Based on Zhai et al (2015) Major cost metric: Levelized Cost of Electricity (LCOE) Cost of CO 2 avoided 3 mitigation options for CCS retrofits Existing EGUs (ERC Purchase) EGUs retrofitted with Partial CCS (no ERCs) EGUs retrofitted with Full CCS (ERC Generation) Calculation of changing LCOE to meet different rate standards and within an ERC market Base Case Analysis Feasible Coal-Fired EGUs High Retrofit Cost Scenarios Interaction with Renewables

5 Feasible EGUs Retrofit of Partial CCS Characteristic Existing EGUs National State Standard Retrofit of Full CCS Average Gross Power Output (MW) 529 529 Net Power Output (MW) 505 448 440 418 Efficiency (HHV, %) 32. 6 25. 8 24. 7 21. 6 Annual Operation Hours 8186 CO 2 Emission Rate (lb/MWh) 2220 1305 1042 336 4. 13 3. 67 3. 60 3. 41 15. 3 43. 4 49. 4 65. 5 Annual Net Electricity Generation (Billion k. Wh) Unit Levelized Cost of Electricity (2009 constant $/MWh)

6 Results: Cost of CCS Retrofits LCOE vs Emission Rate

7 Results: Base Case

8 Results: Base Case

9 Results: High Retrofit Cost Scenarios High Retrofit Cost Scenario Parameters Project/Process Contingency: 30% 50% Retrofit Factor: 1. 0 1. 25 FCF: . 113 . 15 EOR: 0 $10/ton, $30/ton

10 Discussion Interaction with Renewables Wind Solar PV Average breakeven ERC prices for wind and solar = $21 and $42 per MWh At ERC prices < $141 per MWh on average, coal-fired EGUs retrofitted with full CCS are cheaper than PV

11 Discussion ERC trading programs are able to improve the economic viability of CCS retrofits, especially for the implementation of CCS for 90% CO 2 capture. If ERC market prices were less than the breakeven values, additional economic incentives, such as financial support, subsides or revenue from CO 2 utilization, would be needed in order to promote CCS deployment. Though the increased LCOE from CCS is much greater under the high retrofit cost scenarios, higher EOR sale prices could bring the highest risk scenario prices low enough to still being profitable. CCS retrofits should be made with close evaluation of environmental impacts. Water use increases dramatically with CCS, and could serve as major limiting factor for retrofitting units, especially for those in drier climates.

12 Acknowledgements This research was supported by the Center for Climate and Energy Decision Making (SES- 0949710), through a cooperative agreement between the National Science Foundation and Carnegie Mellon University. This research was also possible through the generous support of the Bertucci Fellowship and Pugh Fellowship

13 Thank you! Questions?

14 LCOE Calculation

15 CPP Equations

16 Coal Prices/EOR

17 Renewables LCOE Input parameters for LCOE calculations for PV and wind Plant Type (Time) PV(2016) PV(2030) Wind(2016) Wind(2030) Capital Cost (2011$/k. W) 2145 1294 1695 1668 Fixed O&M (2011$/k. W) 7. 37 46. 5 Heat Rate (Btu/k. Wh) 9756 Capacity Factor (in Texas)a 22% 36% Net Power Output (MW) 150 100 Capital Charge Rate (%) 10. 85

18 Auxiliary Power