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

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 2

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) 3 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 CO2 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 4 Feasible Coal-Fired EGUs Base Case Analysis High Retrofit Cost Scenarios Interaction with Renewables

5. Feasible EGUs 5 Characteristic Existing EGUs Retrofit of Partial CCS Retrofit of Full CCS National Standard State Standard Average Gross Power Output (MW)529 Net Power Output (MW)505448440418 Efficiency (HHV, %)32.625.824.721.6 Annual Operation Hours8186 CO 2 Emission Rate (lb/MWh)222013051042336 Annual Net Electricity Generation (Billion kWh) 4.133.673.603.41 Unit Levelized Cost of Electricity (2009 constant $/MWh) 15.343.449.465.5

6. Results: Cost of CCS Retrofits  LCOE vs Emission Rate 6

7. Results: Base Case 7

8. 8

9. Results: High Retrofit Cost Scenarios 9 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 10

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. 11

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 12

13. Thank you! Questions? 13

14. LCOE Calculation 14

15. CPP Equations 15

16. Coal Prices/EOR 16

17. Renewables LCOE 17 Input parameters for LCOE calculations for PV and wind Plant Type (Time)PV(2016)PV(2030)Wind(2016)Wind(2030) Capital Cost (2011$/kW)2145129416951668 Fixed O&M (2011$/kW)7.37 46.5 Heat Rate (Btu/kWh)9756 Capacity Factor (in Texas) a 22% 36% Net Power Output (MW)150100150100 Capital Charge Rate (%)10.85

18. Auxiliary Power 18