Southern States Energy Board UpdatesBlake Kinney, Policy & Regulatory Analyst

Presented at the 16th Annual Carbon Management Workshop Midland, TxDecember 3, 2018

• Interstate Compact Organization, created by state law and

consented to by Congress

• Established as Southern Interstate Nuclear Board in 1960

• Mission expanded in 1978 to include full spectrum of energy &

environmental issues (Southern States Energy Board)

• 16 U.S. States and Two Territories

• Each jurisdiction represented by the governor, a legislator from

the House and Senate, and a governor’s alternate

• Federal Representative appointed by U.S. President

Southern States Energy Board | Recent Issues and

Activities

• Strategizing an Electric Energy Policy

and Regulatory Framework in Puerto

Rico

• State Energy Profiles document

• Energy & Environmental Legislative

Digest 2018

• Regional emergency motor fuel waivers

& supply shortages

• 3rd Governors Energy Summit during

SSEB’s 58th Annual Meeting

• High profile resolutions

• Transformational technologies to

reinvigorate the coal industry

• CO2 management activitiesGovernors Bryant (MS), Bevin (KY), and Edwards (LA)

SSEB’s 58th Annual Meeting | Biloxi, Mississippi

September 17, 2018

Key Issues in the Shifting Energy Game Board

• Impact of hurricanes on major energy resources

• Regional emergency motor fuel waivers during major natural disasters or supply

disruptions

• Appalachian energy/storage hub

• SECARB / Petra Nova emergence of CO2-EOR in region

• Industrial CCUS in Appalachia

• Project ECO2S and Regional CO2 Storage Complex

• SECARB Offshore Gulf of Mexico – saline storage and CO2-EOR/EGR assessments

• Nuclear faces cold reality in the South

• DOE – Grid Reliability and Resiliency Markets

• Subsidies to meet state GHG goals and retain baseload power plants

Strategizing an Electric Energy Policy and Regulatory

Framework in Puerto Rico

Goals

• Work with the Governor and Legislature of Puerto Rico (PR)

to establish a reliable, affordable, and sustainable electric

energy grid system for the Island

• Develop a policy and legal framework to provide a regulatory

regime for a privatized electric energy grid system in Puerto

Rico

Objectives

• Build a stakeholder participation network;

• Create potential legislative options for an electric energy grid

system;

• Define the long-term goals and objectives of policies and a

regulatory framework; and

• Review risks associated with privatization of the Puerto Rico

Electric Power Authority (PREPA).

Governor Ricardo Rosselló Navares

SSEB Blue Ribbon Task Force

Meeting San Juan, Puerto Rico

October 16, 2018

A Presidential Initiative to Reinvigorate the Coal

Industry

• Incentivize pilot projects for new and transformational technologies at low

technical readiness levels (TRLs)

• Facilitate full utilization of our Nation’s coal resources

• Lead a power resurgence that accelerates the President’s push for U.S. Energy

Dominance in world markets

To ensure fuel diversity and future of U.S. coal industry, we must enable the next generation coal energy renaissance…

Statement of Need for Presidential Initiative

• Coal could disappear over the next several decades

– Decreased grid resilience, reliability, and energy security

– Negative impact on mining power generation industry

• Advanced, transformational coal technologies available soon

– Need Presidential and Congressional support to create investor and developer confidence to

spur capitalization (public-private partnerships)

• Provide a pathway for new coal power units to replace retirements

– Consideration of modular, flexible designs and smaller unit deployment

• Federal government can stimulate business opportunities and catalyze private

investment for project acceleration

– Captured CO2 and other byproducts to offset and reduce costs

– Ensures presence of the U.S. in the global market as other nations build new coal plants

Key Principles and Components

Principles

• Develop 3-5 small (50–350 MW) coal power plants in 10 years

• Manufactured in United States

• Plant siting geographically diverse

• Collaborative approach

• Public-private partnerships share costs

Components

• Supercomputer design and simulated plant operation

• Standardized plant design

• Modular design strategy

• Pilot strategy

Approach

• Demonstrate competitive, transformational clean coal technologies

• Create a market for modular coal power generation plants

• Require Congressional action to accelerate this effort

– Estimated cost for one 100 MW pilot is $500 million

• DOE will competitively select plants that can commence construction by 2020

– Presidential directive and legislation shows the critical need and national interest in this

project

• Integrated partnerships with significant DOE involvement

– Productive utilization of future Federal coal technology development funds

– Supercomputer design, plant simulation, and advanced material information

• Standardized, modular design strategy will be used to reduce plant replication costs

– Emphasis given to designs that minimize on-site construction

2018 State Energy Profiles

SSEB Region & U.S. Generation Mix By Fuel Type

Electric Generating Resources Nationwide

Selected States (2017) and Electricity Prices

Predominantly Coal

KY, WV, MO 80- 93%

AR 42%

Predominantly Natural Gas

MS, FL, LA 62-78%

TX, VA 45-50%

OK, GA, AL 38-41%

Predominantly Nuclear

SC, MD 45-58%

TN, NC 33-40%

Electricity Generation Mix

Texas and Louisiana 2017

Electricity Generation Mix

Missouri and South Carolina 2017

Electricity Generation Mix

Oklahoma and Arkansas 2017

Renewable Generation Mix 2017

Missouri and North Carolina

Renewable Generation 1990-2017

Texas and Georgia

Historical Electricity Generation

Mississippi and Louisiana

Historical Electricity Generation

Texas and Oklahoma

Total Electricity Consumption

SSEB Versus U.S. Average

Energy Consumption by Sector in SSEB Region

Transmission Infrastructure in SSEB Region

Global Expansion of LNG

• LNG trade poised for growth

• Large natural gas discoveries leading to LNG exports

• Major markets:

– Asia-Pacific Region (e.g., Japan is largest importer)

– European Region

– Latin America

• Numerous U.S. LNG Export Terminals on the horizon

– Sabine Pass (LA)

– Dominion Cove Point (MD)

– Cameron (LA)

– Freeport (TX)

– Elba Island (GA)

Regional Emergency Motor Fuel Waivers & Supply

Shortages

• Hurricanes impact Gulf Coast refineries and motor fuel supplies

and distribution systems

• EPA requires reformulated gasoline & low volatility gasoline

through September 15

• EPA has waiver authority under the Clean Air Act to allow

continued sales of “less controlled” gasoline

• Waivers ensure adequate supply of fuel throughout the South &

Mid-Atlantic

• Need: Accelerate regional waiver process

2018 Energy & Environment Legislative Digest

• Some key pieces of legislation:

– The Primacy and Reclamation Act of Tennessee

– The Puerto Rico Electric System Transformation Act

– Resolutions in Support of the Appalachian Storage Hub

• Protecting critical energy-generating infrastructure, improving disaster response, and wastewater management continue to trend as legislative priorities in the Southeast.

Power Plant Capture Transport Storage

SECARB CCUS Demo

• SSEB’s SECARB Demo at Plant Barry

(Bucks, AL)

• 25 MW post-combustion slip-stream carbon

capture

• 12-mile pipeline to Citronelle, AL, for storage

Petra Nova - Emergence of CCUS in South

SSEB Demo Goes Commercial!

• NRG Energy (Houston, TX)

• Interest in Plant Barry

Demonstration

• Plant scale-up to 240 MW

• Post-combustion slip-stream

• Captures 5,200 tons CO2/day

or 90% of CO2

• Pipeline to Petra Nova West

Ranch Oil Field (81 miles)

• EOR 300 bbls/day to 15,000

bbls/day!

• 60 million bbls Recoverable

Reserves

Industrial and Commercial CO2 Utilization Applications

CO2 USA (Industrial CCUS)

• Market-driven to accelerate CCUS

commercialization within industrial sector

• SSEB and DOE-FE developing roadmap and

toolkit

• Central Gulf Coast Region is prime area for

Industrial-CCUS

– Louisiana and industrial corridor along

Mississippi uniquely situated to benefit

from integrated CCUS System

– Industrial sources produce large amount of

CO2

– Green pipeline runs across southern

Louisiana

– Many existing oilfields could benefit from

Enhanced Oil Recovery (EOR)

• Now collaborating with USEA on opportunities

in Appalachian Region*Orange = Industries Red = Oil Fields

CO2 Emission Clusters, Pipeline Infrastructure, and Oil FieldsSource: Louisiana State University, Center for Energy Studies, 2016

Project ECO2S | CarbonSAFE

• CarbonSAFE Program Goals: Develop a commercial-

scale integrated CCS storage complex

• CarbonSAFE Program Phases:

– Phase 1. Integrated CCS Pre-Feasibility Study

– Phase 2. Storage Complex Feasibility Study

– Phase 3. Site Characterization

– Phase 4. Permitting & Construction

Project ECO2S: Pursue key advances in CO2 storage knowledge & technology, including optimizing CO2 storage efficiency, modeling the fate of injected CO2, and establishing residual CO2 saturations. Project ECO2S will involve “real-life” experiences, issues, and challenges of scaling-up from its regional, pre-feasibility assessment of CO2 storage to establish a site-specific, commercial-scale CO2 storage facility, including capturing “lessons learned”

• Advanced Resources International, Inc.• Auburn University• Battelle Memorial Institute• Geological Survey of Alabama• Gerald R Hill PHD, Inc.• GHG Underground• Lawrence Berkeley National Laboratory• Los Alamos National Laboratory• Loudon Technical Services, LLC• Mississippi Power Company• Mississippi State University• Oklahoma State University• Pashin Geoscience, LLC• Southern Company• Trimeric Corporation• University of Alabama at Birmingham• University of Wyoming• Virginia Polytechnic Institute and State

University, Virginia Center for Coal and Energy Research

SOSRA (Offshore Resource Assessment)

• Characterize offshore CO2 storage opportunities

and conduct a volumetric analysis

• Model offshore CO2 storage to identify well and

reservoir configurations that are capable of

meeting the goal of 30 megatonnes or greater

storage in key focus areas

• Develop best practices to advance the state of

knowledge while reducing the cost of storage

operations

• 3 Planning Areas: Mid-Atlantic, South Atlantic,

and Eastern Gulf of Mexico

SECARB Offshore GOM Study Areas (Oil & Gas and

Saline)

Oil

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Salin

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SECARB-Ed (Workforce Development)

• Workforce development to support CO2 storage advanced research and future commercial deployment

• Develop/provide short courses on CCUS technologies and

• Issue professional development hours and continuing education units

Key SSEB Resolutions - 2018

• Ensuring Electric Grid Resilience and Diverse Resource Generation (2.2018)

– Coal is abundant resource providing reliable, secure, resilient power supply

– Fuel Diversity is a great asset; base-load generation, coal and nuclear power are key to grid

stability

– Resilience of electric grid depends on integration of all forms of generation

– Premature retirements of fuel-secure power plants create grid vulnerabilities

– SSEB supports preservation of fuel-secure generation

• Urging Removal of Clean Air Act Section 111(b) and Related Federal Implementation Plans

(3.2018)

• Coal is vital resource to electric generating mix and coal plants are being shut down

prematurely

• Federal Implementation Plans create undue regulations that eliminate coal as generating

option

• SSEB supports states implementation and removal of 111(b) rules

Key SSEB Resolutions - 2018

• Amending the Resource Conservation and Recovery Act to Encourage

Reclamation of Coal Combustion Residual Resources from Surface Impoundments

and Landfills (4.2018)

• Supporting Transformational Science and Technology Innovation to Advance U.S.

National Security and Economic Growth (5.2018)

• Supporting Energy Security for Consumers (6.2018)

• Recommending Policies that Mitigate Market Distortions and Create

Transparency (7.2018)

• Accelerating the Issuance of Regional Energy Fuel Waivers During Supply

Shortages (9.2018)

Conclusions: Electric Utility Resource Mix in the South

• Demand continues to be flat or declining

• Natural gas and oil prices are low

• Aging fleet of coal-fired generating capacity

• Environmental requirements for generation, including uncertainty on carbon limits

• Transformational technologies for fossil fuels

• CCUS focus including natural gas and and other industrial sources

• Operational flexibility of renewables increasing

• Consumers are demanding renewable resources

– BlackRock Investments urges ExxonMobil to consider carbon emissions in future

investment decisions

• Federal budgets for utility resource R&D uncertain

Conclusions: Coming Electricity Sector Trends!

• Changing generation fuel mix has been dramatic – natural gas and renewable generation

will continue to dominate new capacity and generation needs

• Distributed energy resource (DER) penetration continues to increase

• The age of electric vehicle (EV) is here

• Generation is evolving toward more diverse, decentralized network of smaller capacity

• Future grid will be a communications-enabled, self-healing network

• Utilities will enhance their relationship and knowledge of their customers

• Utilities will be digitally enabled, shared services organization providing fully

automated corporate services

~2018 Outlook on Power & Utilities, Deloitte Center for Energy Solutions

Southern States Energy Board6325 Amherst Court

Peachtree Corners, Georgia(770) 242-7712

nemeth@sseb.orgwww.sseb.org