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Renewable Energy

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  • Whether you subscribe to Global Warming and its relationship to manmade CO2 emissions, By 2025 CO2 emissions will increase more than 50% China will install 100 GW of coal fired plants this year alone That is more than 10% of the US installed capacity
  • Here are the sources of power based on their CO2 emissions. Admiral Grossenbacher talked about the nuclear angle……while CLICK : BP Alternative Energy, launched in 2005, will provide low and zero-carbon electricity from wind, hydrogen, solar and natural gas-fired power generation. We focus on power this sector produces twice as much as the transport sector. As many of you know, we will invest at least $8 billion over the next ten years with $1.8 billion due to be spent by 2008 (and if our Wind team gets their way, it will likely exceed that). I will just provide a brief overview of our activities in each of these areas. GAS : cogens, have cogens at our refineries in Texas and California. Expanding Texas, for our Washington State friends, you are likely aware of our pursuit of Cherry Point (and thanks for your support). We are always looking at ways to safely expand our plants to provide very low cost and low carbon power.
  • Transmission As we have been developing projects and working with others in the industry, it has become clear that a significant obstacle to growing the low-carbon power space is one of distance. How to get clean domestic power from the source of the natural resource to the cities where the power is needed? That’s why transmission infrastructure is critical. While the US has the natural resources to create energy, they are often thousands of miles from the people who demand it. Wind is the strongest in the Great Plains states while the major US demand centers are close to the coasts. Coal is also concentrated in these central regions. Distance didn’t stop people building the railroads – or the interstate highways. Distance should not stop us building a national transmission superhighway to get low-carbon, green power to the people. One myth is that no one is really willing to invest in large-scale infrastructure. We are. And we have met a number of other organizations which are also seriously interested in investing in this type of project. We are also following progress on a number of initiatives such as the the Wyoming Colorado Intertie involving the Wyoming Infrastructure Authority and the High Plains Express transmission project for the expansion and reinforcement of the transmission grid in the states of Wyoming, Colorado, New Mexico and Arizona. We do not underestimate the many challenges we must overcome to ensure the investment dollars flow; because along with the investment in transmission infrastructure we also need investment in the capacity that will generate the power.
  • A 20% Federal RPS could result in ca. 300 GW of wind generation by 2030
  • The global solar market was roughly 1.5 gigawatts last year. While this isn’t as large as a small US utility it represents year-on-year growth of nearly 30%. Growth was constrained by silicon shortages but I believe this is a near term issue that will quickly be corrected. The Solar market has grown at this pace for several years in a row now and nearly all projections show growth at this pace or faster over the next 10 years. Cost curves continued to come down while module efficiencies increase. These trends along with millions pouring into solar R&D pursuing next generation technologies make me believe the future is very bright for the solar industry and that it is likely that in the second half of this century we will start to see the majority of power supplied by the sun. We are in progress with cell line expansions at our Bangalore and Madrid manufacturing facilities. We are on track to hit our Plan of 30% growth in sales this year and the project to expand our casting and wafering capability at our Frederick, Maryland site is underway.
  • Concentrated Solar Thermal (CST) power generation produces electricity by concentrating the sun’s energy to produce steam and drive a turbine Context - Southwest US has 6.8 TW of CST potential. CST generation coincident with load. 3GW of PPAs signed in CA; however, no large-scale participants to date. Technology - Two major technologies: Parabolic Trough and Power Tower. Only troughs have commercial experience. High build costs currently a barrier to development. Costs expected to drop when large scale deployment in full force (5-10 years out). Infrastructure – Transmission needs to be significantly expanded to get CST to load in CA, AZ, NV and NM. Existing trough facility in CA has little room for expansion. Policy – Positive climate in the US. Incentives anticipated. Western states with aggressive RPS targets. CO2 legislation provides upsides. Capital – Financing available only for trough technology. Venture capital and large oil & gas starting to evaluate options (Chevron). Other technologies still in development stage. Next Steps – Access technology/development pipeline through partnership. Determine buying into existing asset in CA to gain market and technology knowledge.
  • Our proposed hydrogen power plant at Carson, California will be a partnership with Edison Mission Group. It will convert petroleum coke to hydrogen and CO2. The hydrogen would then be used to fuel a gas turbine to generate 500MW of electricity – enough for 325,000 homes. The CO2 would be captured and transported through a pipeline to an existing oilfield where it would be injected into reservoir rock formations. This stimulates extra oil production and permanently traps the CO2. This project has been awarded $90m in investment credits by the US Government as part of its drive to encourage technology development in this area. We recently announced we will be pursuing a project in Western Australia that will use lignite or brown coal as the fuel source and store the carbon dioxide in a saline aquifer.
  • Gas-fired power is the most material option we currently have to reduce carbon in the atmosphere as a modern CCGT emits roughly ½ the level of CO2 as a current generation pulverized coal plant. Construction continues at our 250 megawatt Texas City Steam Turbine project and we are on track to commission the plant in 2Q 2008. We continue to advance the development of several other cogeneration facilities and our on track to deliver our commitment of 750 megawatts under construction by end 08.
  • Another myth says that low carbon power technologies are uncompetitive. With the combination of moving some of the newer technologies down their cost curves and by factoring in to the cost of power the cost to the environment of CO2 emissions we find that wind , nuclear, hydro and gas can out compete conventional coal fired power by 2030. We have not included solar here – as this chart shows centralised power sold at w/s prices – whereas solar is a distributed technology deployed on home and office rooftops – and generated costs compete with retail prices. Solar prices are 175$/mwhr – on track to reduce to $70/mwhr . Reduction of 15-50% to allow comparison to w/s costs put solar PV in range with the other low carbon technologies. Low carbon power technologies may not be quite there yet from a competitive angle – but With technology advances - that are undeniably achievable – and a global price on carbon - that many governments now acknowledge as desirable – things can change.
  • Transcript

    • 1. Renewable Energy Policy Framework Darrel Thorson, Vice President, Thermal Development BP Alternative Energy
    • 2. Why is BP in Alternative Energy?
        • China built 100 GW of coal fired generation in 2007
      • China continues massive coal buildout.
      • China installed 95 GW in 2006
      • US installed capacity is 1000 GW
      • By 2009, China will be the largest emitter of CO2 on the planet, surpassing the US (CERA, 2007)
    • 3. 65% of power plants needed around the world in 2030 are yet to be built Power Generation by Technology & Global Power CO2 Emissions As a result, CO2 emissions are expected to double by 2030 Renewables Hydro Nuclear Oil Coal Natural Gas 06 Projected Global Power CO2 Emissions 2005 2010 2020 2030 20 0 20 0 10 Btpa CO2 000 TWh
    • 4. Significant synergies between the climate change and energy security agenda
        • Three key takeaways;
        • 50% of the climate opportunities support energy security.
        • Further 45% is neutral when it comes to energy security
        • Only 5% of climate initiatives do not benefit energy security.
      Good Bad
    • 5. Power plant carbon intensity by type
    • 6. Policies to stimulate investment
      • Regulatory
      • Transmission
      • Fiscal Incentives
      • Communication/Educational Initiatives
    • 7. Incentives can accelerate maturity R&D Demo. Commercialisation Capital - based Production - based ( MWh ) TRANSITIONAL INCENTIVES CARBON PRICING (CO2 tonnes) Time + trading Grants, inv tax credits production tax credit Cap - and - trade programs, carbon taxes H2 power with CCS Solar PV Onshore wind Gas power Tech Cost Offshore wind Deployment Solar nano CST
    • 8. Regulatory Policy Priorities
      • Enduring carbon pricing policies:
        • Cap and trade in US
      • State RPS targets with enforceability
      • A federal RPS in the US
        • Could result in 300 GW of wind by 2030
      • Favorable siting policies for technologies with large land needs
        • Wind (20 acres / MW – dual use)
        • CST (5 acres / MW – single use)
    • 9. Transmission Policy Priorities National Interest Corridors, State Transmission Incentives Coal reserves Wind resources Load centers
    • 10. Fiscal/Transitional Policy Priorities
      • Grants/Tax Credits for Research and Development to both the private and public sectors.
      • Develop enduring carbon pricing policies:
        • Cap and trade in US
      • Stability and predictability in fiscal incentives
        • Avoid “stop-go” syndrome
      • Further tailoring of incentives to technologies
        • Production-based where scaling up is the priority (eg. Wind)
        • Performance-based where cost reduction, technological advance is priority (eg PV solar, Concentrated Solar, Biofuels)
        • Early-mover demonstration programmes for hydrogen power / CCS
    • 11. Communication/Education Initiatives
      • Provide incentives to states to include renewable energy studies in the educational curriculum at every level
      • Promote private/public sector participation in renewable energy.
      • Increase funding to the National Renewal Energy Laboratory (NREL).
      • Increase public awareness of the benefits of renewable energy (and the hidden costs of conventional energy).
    • 12.
      • Encourage new conversion technologies and advanced molecules – by moving beyond feedstocks and vehicle emissions and avoiding fuel-specific targets and fixed per-gallon mandates
      • Create incentives or obligations based on emission reduction or energy content rather than volume basis
      • Encourage sustainable and responsible production routes
      Bio-fuels Policy: Target ends, not means. Allow markets to pick winners. Encourage sustainable practice. Feedstock Production Conversion Primary Transport Storage & Blending Secondary Transport Retail End Use
    • 13. Back-up slides
    • 14. Wind Experiencing Explosive Growth
        • The world saw 32% growth in wind capacity in 2006
        • US added 2500 MW in 2006; 3000 MW in 2007
        • US/Canada will triple capacity to 30,000 MW by 2010
      Source: ( GWEC, 2007 )
    • 15. Photovoltaic Solar Power
        • Currently
        • BP is a leading solar manufacturing and marketing company
        • We have manufacturing capacity of 200 MW with facilities in Bangalore, Madrid, Frederick, Xian and Sydney
        • We have 30 year’s experience , 20 offices, over 2000 employees and installations in 160 countries
        • Our commitment
        • We are increasing our overall global manufacturing capacity to 700 MW
        • We are investing $97m to increase our casting and wafering capacity at our Frederick plant in the USA
        • Silicon activities
        • Signed significant supply contract for 2007
        • Extensive investigation in alternative silicon sources:
          • Provides opportunity for significant cost reduction over traditional sources
          • Scalable and in line with future growth requirements
        • Continued development of our advanced Mono² and commercialization:
          • Mono² efficiencies with multi cost and processing advantages
    • 16. Concentrated Solar Thermal Power Concentrated Solar Thermal (CST) power generation produces electricity by concentrating the sun’s energy to produce steam and drive a turbine. Context - SW US has 6,800 GW of potential vs 1,000 GW in entire US Policy – Positive climate in the US but need more sustained incentives. Infrastructure – Need transmission!
    • 17.  
    • 18. Gas-fired power
      • Currently
      • We participate in 12GW of gas-fired power plants (the size of a mid-sized US utility).
      • We have successfully developed five new power plants in the past five years in the US, UK, Vietnam, South Korea and Spain.
      • Our 1075 megawatt K Power CCGT in South Korea is the most efficient gas power plant in Korea.
      • We broke ground at a 250 MW Texas City Steam Turbine project in 2006 that will take our Texas City facility to 1000 MW when complete.
      • Our commitment
      • We will continue to look for high value opportunities to monetize our equity gas positions and build cogeneration facilities at existing BP facilities.
    • 19. Next generation biofuels woody crops Ethanol / butanol / ? for gasoline Oily crops eg jatropha for diesel oil crops
      • Next-generation bio-components can provide higher energy content and GHG reductions
      • Energy content:
        • Corn yields 240 gallons an acre; sugarcane 440 gallons per acre
        • Sunflower yields 75 gallons per acre; jatropha 140-220 gallons per acre; palm oil 450 gallons per acre
        • Opportunities to explore woody crops – straw, residues etc
        • Ligno-cellulosic conversion offers prospect of using entire plant – up to 1200 gal/acre
      • GHG benefits:
        • Biofuels can offer GHG emissions reductions of 20% to 90%, depending on feedstock and conversion process
        • Goal should be in upper end of range through high energy feedstock, less intensive cultivation crops, low carbon conversion processes
    • 20. Increasing suite of low carbon options are available and affordable Combined Effect of Lower Cost of New Technologies and CO 2 Emissions Price by 2030 Source: IEA Technology Perspectives 2006, IEA World Energy Outlook 2006, BAH analysis Note: All data from lower bound of sources’ reported ranges. Coal and gas power price varies due to fuel prices, predicted range shown on chart. No coal CCS plants currently in operation; earliest operational plant in 2010. All costs are for wholesale generation.
    • 21. Policies and investments - biofuels US – BP Energy Biosciences Institute - $500m over 10 years US – Renewables Fuels Standards EU – biofuels penetration target of 10% for 2020 BP blended 800m gallons of ethanol in 2006 UK – Bioethanol plant with ABF; Demonstration biobutanol plant with DuPont Joint venture with D1 Oils to plant jatropha In Asia, Africa and India Australia – plans to market 400m litres of biofuels per annum Project to make biofuels from tallow at Bulwer refinery
    • 22. Principles for transitional incentives
      • Goal: “accelerate the deployment of low-carbon power technologies”
      • Policy understood to be ‘transitional’ – eventually phased down and replaced with a carbon-based measure, however:
        • policy is governed by long (i.e. 5-10 year) regulatory periods
        • both the timescales and ‘ramping down mechanism’ are clearly understood upfront
      • Policy based around a market mechanism, e.g. tradable certificate system – to seek out lowest-cost solutions and to allow business to optimise across a wider playing field
      • Policy provides encouragement tailored to each technology without ‘picking winners’ for favored treatment