November 19, 2012

Today’s Presentation

Coal – energy source for power

Our future outlook

New build or upgrade?

Emerging clean coal technology

Plant modernisation and upgrade

A sustainable future?

Coal a global fossil fuel

• Use of coal has underpinned the development of many of the world’s economies including Australia

• 68% of Australia’s electricity generated by combusting coal

• Australia is the No. 1 global exporter of thermal coal

• Australia’s estimated reserves to last until 2100

Source : IEA(2012)

• Largest growth markets for coal-fired power are China and India

Snapshot generation mix dominated by coal

• While there will be growth in other energy generation such as gas, wind and solar, Federal Government modelling suggests that coal will still be the largest single source of power generation in 2035

• Impacts of climate change will drive transformation

• The mix will be different in 40 years time but change does not happen overnight

Electricity production by fuel – 2010-11

Source : BREE (2012)

The outlook for base-load coal fired plant long term projection

Australian Electricity mix to 2050 – AEMO medium demand scenario

Source : BREE (2012)

New build…

…or upgrade?

Emerging clean coal technologies Carbon Capture Storage

• Important enabler for reducing CO2 emissions

• Still evolving technology with costs and storage still uncertain

• To enable large scale deployment of future CCS technology - all new approved plant will be legislated to be CCS Ready

Source : C02RC (2012)

GREATEST UNCERTAINTY

Current worldwide CCS LSIP’s technology is maturing

Source : GCCSI (2012)

Emerging clean coal technologies Integrated Gasification Combined Cycle

• 6 coal based IGCC plants in operation worldwide

• Cost uncertainty around maintenance and operation given limited experience

Source : GE

• R&D process still needs to address reliability on all coal types

Technology solutions for cleaner coal

• Super Critical and Ultra Super Critical Steam Cycle Plant

• Circulating / Bubbling Fluidised Bed Combustion (utility scale)

Kogan Creek Power station Source : CS Energy

• Coal pre-drying

• Oxy-Fuel Combustion

• Consideration for new build or retrofit to existing plant

Demonstration lignite drying plant

Niederaussem K Power Station Source : RWE

Major projects in various stages of development local perspective

Project Proponent Type Output State

Mt Piper 2 Delta Electricity USC 2000 MW NSW

Bayswater B Macquarie Generation USC 2000 MW NSW

Bluewaters 3 & 4 Griffin Coal (Sumitomo JV) SubCritical 2 x 208 MW WA

Galilee Basin Waratah Coal SC + CCS 900 MW QLD

Wandoan GE/Xstrata/Stanwell IGCC 400 MW QLD

Latrobe HRL IGCC 600 MW VIC

• Billions $ worth of capital investment in challenging environment.

• Status of projects affected by policy, cost and demand outlook

• Addressing existing assets offers alternative lower cost do now solution for addressing efficiency and CO2 reduction

Plant modernisation and efficiency upgrades do now proven solutions

• Lower cost option for increasing generation capacity and efficiency, reducing emissions and minimising capital cost expenditure

• Turbine and steam cycle improvements

• Boiler and combustion process improvements

• Solar thermal boosting

• Emission reduction technologies

• Repowering with Gas Turbines

• Biomass co-firing

Total coal-fired plant capacity worldwide

Source : IEA(2012)

Plant modernisation and efficiency upgrades recent project examples

Eraring P.S Upgrade

Eraring Energy – NSW

• Uprate from 4 x 660MW to 4 x 720MW • Steam Turbine rotor replacement • Boiler refurbishment including Low

NOx Burners • Generator rewind and refurbishment

Liddell P.S Solar Thermal Boost

Macquarie Generation – NSW • Based on Fresnel technology • Supplies steam to feedwater heaters • Renewable energy source integrated

with existing thermal plant • Foundation for larger scale schemes

Plant modernisation and efficiency upgrades do now proven solutions

CO2 reduction of coal-fired plant by increased efficiency

• Raising efficiency and improving performance will result in important reductions in CO2 emissions over the next two decades and beyond with imminent application of CCS technology.

Source : VGB (2010)

Transition to a clean energy future is there still a place for base-load coal fired plant?

• Australia well on track to de-carbonising economy– but there is and still will be reliance on base-load coal in near future

• Coal plant retired by 2050 – unpredictability of dynamic markets and directions of future policy may result in sooner retirement? Rapid technology innovation might mean later?

• Policy - a key determinant for considering clean coal

• Cost - a key determinant for implementing clean coal

• Life exhausted plant not cost effective to modernise. Mid life plant offers the opportunity

• Regulatory and economic conditions must be consistent with the ambition to achieve higher efficiencies and lower emissions….

…and thus ensure sustainable outcomes for future energy needs

Thank you

Questions / Comments / Debate?