1 Nemacolin Energy Institute 2nd Annual National Coal Conference April 23, 2013 Hal Quinn President & CEO National Mining Association
Feb 24, 2016
1
Nemacolin Energy Institute2nd Annual National Coal ConferenceApril 23, 2013
Hal Quinn
President & CEO
National Mining Association
2
BTU-Hungry World
China Only part of the story unfolding
Developing EconomiesWill account for 80% Global GDP by 2050
Energy IntensitiesRemain just a fraction of developed economies
3
Scale and Pace of Developing World Urbanization• By 2020, developing
countries will account for almost 80% of the world’s total urban population
• The global growth is equal to adding the population of Mumbai every second month or Shanghai every third
1990 2010 2030
650
1,400
2,350
Total Urban Population in China, India and Africa (mil-
lion)
+750
EU US
~500~370
Total Population in De-veloped Countries (mil-
lion)
2030
+950
Source: McKinsey & Company
4
Coal Becomes World’s Primary Energy Source
2000 2005 2010 2015 2020 20252
3
4
5
6
Bill
ion
TOE
Coal
Oil
Natural Gas
Sources: Wood Mackenzie, IEA
5
Growing Opportunities: US Coal Exports
• State-by-State coal exports economic analysis• Includes total jobs, gross value
added, tonnage, capacity, employee compensation, and forecasting.
• Educate policy makers on the coal leasing program and the benchmark process for royalty payments.
• Advocate for new and expanded port capacity across the United States
Policies that enhance competitiveness of U.S. coal exports • New and expanded export capacity
nationwide
• Regulatory streamlining for mine-to-market infrastructure
Economic and trade benefits of increased U.S. coal exports• High-wage job creation throughout
national and regional supply chain
• Positive contribution to U.S. balance of trade
• Fueling growth of emerging economies and creating demand for U.S. products
Domestic Coal: Directional Assessment
• Energy Economics
• Politics and Policy
• Coal Repositions
• Coal Rebounds
Projected Coal Plant Retirements as a Percentage of Total Capacity by Region - 2020
Nationwide Retirements: 68 GW20% of capacity/14% of 2012 generation
7.4% 21% 30.3%
36.8%
4.4%
Source: EVA, NMA
Higher Capacity Factors for Remaining Plants Offset Retirements
U.S. Coal Fleet(In gigawatts of capacity)
Capacity at risk of retiring by 2020Expected capacity to remain onlineIncludes 7 GW New Capacity
277 GW
57%
76%
2010 2012 2020
2020: ~100 MST recovery from 2012 levels
68 GW
66%
U.S. Coal Plant Utilization (Remaining 277 gigawatts)
8Source: EVA, NMA
2012 2013 2014 2015 2016 2017 2018 2019 2020 240
250
260
270
280
290
300
310
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0%
9.4%
13.1%
2.1%
7.7%9.3%
11.0%12.5%
15.0%
Coal Generation Capacity and % Change in Generation from 2012
GW GWh
Capa
city
(GW
)
% ch
ange
in g
ener
ation
from
201
2 (G
Wh)
Source: EVA
Coal Fleet Size
2011 20200
50
100
150
200
250
300
350
400
5114
33
19
53
43
201
200
500+300-500200-300<200
Capa
city
(GW
)
• Smaller units (<300MW) comprise 75% of the retirements
• Almost 75% of the remaining coal fleet will be larger than 500 MW
Source: EVA
Coal Fleet Age
2011 20200
50
100
150
200
250
300
350
400
54 62
80
117
12263
82
34
<3030-4040-5050+
Capa
city
(GW
)
• By 2020—
• 65% of the existing coal fleet is >40 years old
• Youngest segment (<30 years) drops to 13% of entire fleet
Source: EVA
Coal Fleet Heat Rate (MMBtu/MWh)
2011 20200
50
100
150
200
250
300
350
400
5 1
4730
188
154
97
92<10,00010,000-11,00011,000-13,00013,000+
Capa
city
(GW
)
Emission Profile (#/MWh)
• SO2: - 25 %
• NOx: -11 %
Source: EVA
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Situation Assessment• Coal fleet shrinks—but • Larger units predominate (~75% > 500MW)• Higher utilization rates = increased coal generation
• New controls improve fleet emissions profile• Fleet continues to age• Aging fleet vulnerable to next round of EPA rules: • GHG NSPS standards for New Plants• GHG NSPS guidance for Existing Plants
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Greenhouse Gas Regulations
• EPA proposes a single coal/natural gas emission standard for new power plants
• Equivalent to NGCC emission rate (1,000 lbs/MWh of CO2)
NSPS Standard
• Best in class coal technology cannot meet standard without CCS
• Similar beyond current technology approach for existing plants could phase out coal fleet
Impact on Coal Plants • New plants: Separate
standards for natural gas and coal plants
• Existing plants: No impairment of existing fleet and no stranded investments to meet recent emission standards
NMA Objectives
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Coal Retirements & Incremental Natural Gas Supply
Source: EIA, AEO’12 early release, Reference Case . Notes: Gas replacement based on 2007 (pre-recession) electricity generation from units already announced for retirement to 2020 (appx 32 GW) and an additional 36 GW of units past 2020 at high risk for retirement based on anticipated non-CO2 regulatory environment identified by NETL
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0Lower 48 Unconventional (Shale-gas)
(Shale-gas only growth (6.7 Tcf);
Lower 48 ConventionalNet LNG Imports
Net Pipeline Imports
Alaska
Tcf
Net Domestic Supply Increment
Indexed to show growth from 2011
+1.6Tcf
(2035 vs. 2011)
+0.6 Tcf (2020 vs. 2011)
Gas to replace generation from known (~32GW) coal retirements
(1.35 Tcf by 2020)
Gas to replace generation from additional (~36GW) coal retirements
(3.1 Tcf by 2030)
(AEO’12er Reference Case - Indexed to 2011)
Technology Solutions vs. Fuel Bridges
17
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