the risks of participating in the ampgs coal plant: february 14, 2008 david schlissel
Post on 01-Jan-2016
214 Views
Preview:
TRANSCRIPT
The Risks of Participating in the AMPGS Coal Plant:
February 14, 2008
David Schlissel
2 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Most Significant Uncertainties and Risks
• Potential for federal restrictions/regulations of greenhouse gas emissions.
• State actions that can affect need for and economics of proposed coal-fired plants.
• Further increases in the Project’s capital cost.
3 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Federal Regulation of Carbon Dioxide Emissions is a Matter of When, Not If
4 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Synapse and R.W. Beck CO2 Price Forecasts
0
10
20
30
40
50
60
2010 2015 2020 2025 2030
CO2
Pric
es U
S200
5$/s
hort
ton
Synapse High
Synapse Mid
Synapse Low
R.W. Beck Feb.2007 Power SupplyPlans
5 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Synapse and R.W. Beck CO2 Price Forecasts Compared to Other Recent Forecasts
Levelized CO2 Costs (2010-2030)
0
10
20
30
40
50
60
R.W. BeckPowerSupplyPlans
Synapse2006
MIT April2007
2007 XcelMN
ResourcePlan
EIA 2007Analysis of
S. 280
EPA 2007Analysis of
S. 280
EIA 2008Analysis of
S. 1766
New MexicoCommission
2007
MinnesotaPUC 2007
2007$/t
on
6 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Annual Cost of Power from AMPGS Project under Synapse and R.W. Beck CO2 Price Forecasts ($/MWh)
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
($/M
Wh)
Synapse Low CO2 Prices Synapse Mid CO2 Prices Synapse High CO2 Prices R.W. Beck CO2 Prices
7 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Annual Cost of Power from AMPGS Project under Synapse and R.W. Beck CO2 Price Forecasts
(Millions of Dollars)
$0
$20
$40
$60
$80
$100
$120
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Mill
ion
s o
f N
om
ina
l D
oll
ars
R.W. Beck CO2 Price Forecast Synapse Low CO2 Price Forecast
Synapse Mid CO2 Price Forecast Synapse High CO2 Price Forecast
8 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Costs of New Power Plants Have Skyrocketed
• It is generally accepted that power plant capital costs have increased dramatically in the past 2-3 years.
• For example, Duke Energy originally estimated that its two unit Cliffside coal project would cost $2 billion. Now Duke estimates that the cost of a single unit will be $2 billion.
• Westar Energy announced in Dec. 2006 that it was deferring site selection for new 600 MW coal plant due to significant increases in estimated costs of 20 to 40 percent in just 18 months. Westar CEO said:
“When equipment and construction cost estimates grow by $200 million to $400 million in 18, it’s necessary to proceed with caution.”
• Cost of now cancelled Taylor Energy Center in Florida increased by 25 percent, $400 million, in just 17 months between Nov. 2005 and March 2007.
9 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
The Estimated Cost of Building the AMPGS Project Has Increased Dramatically Since 2005
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
October 05 May 06 June 07 January 08 Future
Bil
lio
ns o
f D
oll
ars
10 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Factors Which Have Led to Rising Power Plant Construction Costs
• Cost increases are due, in large part, to significant increase in worldwide demand for power plants. Demand for plants is straining the supply.
• Demand from China and India.• Despite recent cancellations there is a strong U.S.
demand for new power plants and pollution control projects for older plants.
• Limited capacity of EPC (Engineering, Procurement and Construction) firms and manufacturers.
• Fewer bidders for work, higher prices, earlier payment schedules and longer delivery times.
11 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Rising Power Plant Cost Escalation
• Significant cost increases for critical power plant commodities, e.g., steel, copper, cement, fabricated alloy piping.
12 www.synapse-energy.com | ©2006 Synapse Energy Economics Inc. All rights reserved.
Alternatives to AMPGS Project
Combined Heat and Power.
• Energy Efficiency.
• Renewable Resources
• Short-term or Long-Term Capacity and Energy Purchases from Existing Gas-Fired Power Plants
top related