2011 Governor’s Conference on Energy and the EnvironmentLG&E and KU Carbon Capture and Storage Project

September 27, 2011

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LG&E and KU CCS Project Background

• LG&E and KU Agreement with Department for Energy Development and Independence (DEDI) , September 2010

• Define a Project to Capture and Store CO2 from Coal Combustion

• Significant Funding from DEDI with LG&E and KU Cost Share

• Phase I Work to be Completed by June 30, 2011

• Components of the Project Definition

• Capture Technology

• Geology for Storage

• CO2 Source and Site Constraints

• Project Development Team

• EPRI – Identify Promising Technology

• KBR – Technology Selection and Process Engineering

• KGS – Geological Evaluation

• LG&E and KU – Project Management and Siting

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LG&E and KU CCS Technology Selection Process

• Key Capture Technology Selection Criteria• Potential for Significant Cost Reduction Vs. Current

State of the Art • Technology Not Currently Scheduled for a DOE Funded

Demonstration• EPRI Identified 13 Potential Capture Technology

Developers

ADA* Jupiter Oxygen* 3H*

Aker* MTR U of Texas

Akermin* RTI U of Wyoming

CAER* Siemens Babcock Thermo

Babcock & Wilcox*

* Provided Information Requested in EPRI Questionnaire

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LG&E and KU CCS Technology Selection Process

• 7 of 13 Technology Vendors Responded to EPRI Questionnaire

• Technology Screening Workshop in Early February of 2011• Ranked Technologies Based on Predetermined Scoring

Matrix• Short-listed 5 Vendors for Further Evaluation

• Short-listed Technology Vendor Presentations in Late February of 2011

• Selection of 3H in March of 2011

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3H Background

• Small Research Driven Company Located in Lexington Kentucky

• Self Concentrating Amine Process

• DOE, EPRI, LG&E and KU are providing Funding for Bench Scale Work Through 1st Q 2014 (Independent from this DEDI/LG&E and KU CCS project)

• Potential for Technology to be Ready for 50 MW Demonstration by 2016

• Additional Funding Required to be Ready for Demonstration9/27/2011

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Potential LG&E and KU Generation Sites

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E. W. Brown Plant

Green River Plant

GhentPlant

Mill CreekPlant

Trimble CountyPlant

KULG&E

KGS Geological Evaluation of Sites

KULG&E

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LG&E and KU CCS Site Selection

• Selected Brown as Preferred Demonstration Site

• Best Geological Storage Potential• Avoids Interstate Legal Issues

• New High Efficiency FGD for SO2 Removal

• New NOx Control Under Construction

• Sufficient Area Available for Demonstration Plant

• Sufficient Process Cooling Water Available

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LG&E and KU Project Conclusions

• Full Funding Commitments Required in Early 2013 to Complete Construction in 2016

• Estimated 50 MW Project Capital Cost with 20% Contingency• Approximately $140 Million or $2,800/KW• Approximately 2X the Cost to Construct Trimble 2

• Estimated Annual Operating Cost (excluding cost of replacement power)• Over $10 Million or Over $30/Ton Captured

• To Proceed, the Project Requires Sufficient 3rd Party Funding

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