Advanced Coal Technologies Laufer Energy Symposium

Dianna Tickner Peabody Energy April 5, 2013

What is 21st Century Coal?

2

● Use of modern, highly efficient methods and technology

in the extraction and utilization of coal to produce valued

products.

● Satisfying the desired global objective of economic

sustainability, energy security, and environmental care.

● Wide scale deployment of clean coal technologies that

enable the ultimate goal of continuous emission

improvements leading to near-zero emissions.

Clean Coal Defined…

Renewables

Hydro

Nuclear

Coal

Natural Gas

Oil

2000 2005 2010 2015 2020 2025 2030

Why Coal? World’s Fastest Growing Energy Source, Expected to Overtake Oil

Source: Wood Mackenzie Energy Service.

2013

Mil

lio

n T

on

ne o

f O

il E

qu

ivale

nt

Total World Primary Energy Demand by Fuel

Source: CIA World Fact Book, United Nations Development Program’s Human Development Report.

United StatesFinland

Sweden

Canada

Qatar

South Africa

Brazil

China

Indonesia

India

Bangladesh

Ethiopia

Japan

Russia

Nigeria

DR Congo

Germany

UKArgentina

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

U.N

. H

um

an

De

ve

lop

me

nt In

de

x

Electricity Use Per Capita (kWh/year)

Every 10-Fold Increase in Per

Capita Electricity Use Drives a

10-Year Increase in Longevity

Affordable Electricity Enables People to Live Longer and Better

Why Clean Coal? To Improve Lives and Livelihoods

4

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1970 1980 1990 2000 2010 2020 2030

The Economic Miracle Powered by Coal

Ele

ctr

icit

y f

rom

Co

al

(TW

h)

Wo

rld G

DP

(trillion

s o

f 20

05

$)

Global

Electricity

from Coal

World

GDP

Source: Developed from International Energy Agency World Energy Outlook (1995-2011); USDA 2011.

Near Perfect Correlation Between Coal Use and GDP Growth

5

$100

90

80

70

60

50

40

30

20

10

20 years

The Goal:

Near-Zero

Emissions

Efficiency improvements at

Existing Plants

Building New Supercritical and

Ultra-Supercritical Plants

Demonstrating and Deploying IGCC and

Carbon Capture, Utilization and Storage

Advance Carbon Capture, Utilization and

Storage and Btu Conversion

Retrofitting Existing Coal-Based Generation with

Carbon Capture/Storage Up to 90% Lower CO2

CO2-Enhanced Oil Recovery, Producing 4 Million b/d

Technology is the Path to Achieve our Environmental Goals

Clean Coal Technologies Are Environmental Success Story

7 Source: USDA 2011, EIA 2012, NETL 2011

-100%

-50%

0%

50%

100%

150%

1970 1975 1980 1985 1990 1995 2000 2005 2011

% C

han

ge S

ince 1

970

+ 103%

- 89% - 93%

+ 170%

Total Emissions Have Declined While Coal Consumption Increased

Advanced Technologies Build On Progress for Sustainable Future

• Emission rates one-

fifth the average of

U.S. coal fleet…

• Every 1% efficiency

gain reduces

lifetime emissions

by 2,000 tons of

NOx and SO2 and

2.5 million tons

of CO2

Source: Platts World Electric Power Plant Database, January 2013 and Peabody Energy Global Analytics.

China Houses 55% of the World’s Advanced Coal Fleet

8

Indonesia

15 GW

Europe

25 GW

Other Asia

35 GW

Vietnam

20 GW

ROW

20 GW

~450 GW New Generation Expected Online by 2017

China

250 GW

India

70 GW

Africa

15 GW

21st Century Coal Technology Achieves Near-Zero Criteria Emissions

Advanced Coal Older Fleet ↑

89% Sulfur Dioxide

93% ↑

Nitrogen Oxide

↑

99.9% Particulates

-30%

CO2 9

How? Higher Temperatures Increase Environmental Efficiencies

10

Low NOx Burners Reduces NOx

Steam Generator High efficiency boiler

produces less emissions

per megawatt output

Selective Catalytic Reduction

Further Reduces NOx and

enhances mercury removal

Emission Monitoring Continuously monitors many

types of emissions

Cooling Tower

Bottom Ash A by-product useful in concrete

and other products, or stored

Fly Ash A by-product useful in concrete

and other products, or stored

Gypsum A by-product useful in wallboard

Fabric Filter Captures particulate matter

and mercury

Wet ESP Reduces fine particulate and

sulfuric acid mist

Scrubber Reduces SO2

and mercury

Typical Supercritical and Ultra-Supercritical PC Control Equipment

Increase Power Per Unit

U.S. Advanced Coal-Fueled Generating Fleet is Still Growing

11

More than 11 GW of New Supercritical Technology Capacity Added

Supercritical Technology Since 2000

Operating

Oak Creek: 1,230 MW (2009)

Comanche: 750 MW (2010)

Oak Grove: 1,600 MW (2009)

Iatan 2: 850 MW (2010)

Trimble County 2: 750 MW (2011)

Sandy Creek: 900 MW (2013)

Westin 4: 530 MW (2008)

Longview: 695 MW (2011)

Council Bluffs 4: 790 MW (2007)

Prairie State: 1,600 MW (2012)

Cliffside: 825 MW (2012)

Turk: 600 MW (2012)

Total: 11,120 MW

Trimble County

Cliffside

Turk

Iatan

Council Bluffs

Prairie State

Comanche

Oak Creek

Oak Grove

Sandy Creek

~ 40 million tons of coal annually in new

operating plants

Westin

Longview

Each Investment Delivers Greater Efficiencies, Lower Emissions

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

CO2 Emissions

12

U.S. Existing Coal Fleet

Prairie State

AEP Turk Isogo (Japan)

Yuhuan (China)

CO

2 E

mis

sio

ns

(To

nn

e/M

Wh

)

Subcritical Supercritical Ultra-Supercritical

CO2 Emissions vs. Net Plant Efficiency

Source: Based on Booras and Holt (2004).

● Yuhuan CO2 emissions are about 25% less than the typical U.S. coal plant

● Coal Utilization Research Council / Electric Power Research Institute R&D targets

about 35% reduction in CO2 emissions from coal combustion technologies

Efficiency Improvement is the First CO2 Mitigation Technology

Net Plant Efficiency, % (HHV)

Btu Conversion Transforms Coal into Clean Electricity, Natural Gas

& Transportation Fuels

Electricity

Industrial Gas

Pipeline SNG

Ethanol

Diesel

Jet Fuel

Hydrogen

CO2 Capture and

Sequestration

Conversion/

Gasification

Coal

Coal’s Versatility Adds to Energy Security

13

Harnessing Coal’s Carbon Delivers Economic and Environmental Objectives

● Pre-Combustion: Operates like a

“scrubber” to absorb the CO2 from

the boiler exhaust flue gas.

● Post-Combustion: Selectively

absorbs and recover the CO2 from the

syngas. Commercially available.

● Oxy-Combustion: Combusts fuel in

the presence of oxygen, rather than air,

produces a highly pure CO2 exhaust.

● CO2 Uses

– Deep geologic storage is beginning

to be demonstrated globally.

– Enhanced Oil Recovery (EOR) has

been deployed for decades in the

Permian Basin (west Texas) from

natural CO2 sources.

14

Carbon Capture Utilization & Storage (CCUS) Technologies

CO2 Capture Options are Significant

15

Alstom

Econamine+

(Fluor)

CANSOLV

(Shell)

Powerspan

MHI

B&W

Siemens

GE

GE

Phillips 66

Siemens

Shell

Rectisol

(Linde)

Selexol

(UOP)

MDEA

MHI

KBR

Praxair

Linde

Air Liquide

Air Products

B&W

Alstom

Fischer-Tropsch

(Sasol, Shell, Synfuels China)

Methanol-to-Gasoline

(ExxonMobil)

Methanation

Numerous Companies Advancing a Variety of Technologies

CCS for EOR Drives Down Technology Costs

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Over the next 30 years:

● 87 billion barrels in

stranded oil could be

recovered in the

U.S. alone

● CO2 is a necessary

feedstock for EOR

● Maximum needed:

14 billion tons of CO2

7 billion tons of coal

Source: National Energy Technology Laboratory, U.S. Department of Energy, “Storing CO2 and Producing Domestic Crude Oil

with Next Generation CO2-EOR Technology,” Jan. 9, 2009; International Energy Agency: “Coal-Fired Power Generation:

Replacement/Retrofitting Older Plants,” 2008; Management Information Services and Peabody analysis. Source:

DOE/NETL_2012/1540-Figure 1.5.

Coal’s CO2 Content as the Preferred Feedstock

Coal Provides the Best Deal for Baseload Power

No Subsidies Required for Coal to Be Cost Effective…

Yet U.S. Subsidies Highest Cost and Least Abundant Generation

Oil

& G

as

$

.64

Co

al $

.64

Hyd

rop

ow

er

$.8

2

Nu

cle

ar

$3.1

4

Do

llars

per

meg

aw

att

ho

ur

Sources: U.S. Department of Energy and Institute for Energy Research, 2011.

Win

d $

56

.29

Solar $775.64

Advanced Coal Delivers Real “Green” Jobs and Socioeconomic Benefits

19

100 Gigawatts of Green Coal Technology

Benefits 100GW

Jobs (million job years) 6.9

Output (trillions) $1.1

Labor Income (billions) $368

Benefits 100GW

Jobs (thousands) 251

Output (billions) $58

Labor Income (billions) $17

Source: National Coal Council, 2012.

Annual Benefits

During Operations

Cumulative Benefits

During Construction

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In Summary, Advanced Coal

Technologies Key to

Economic, Environmental and

Energy Security Goals

GreenGen Power Plant and

Carbon Research Center; Tianjin, China