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Summit Carbon CaptureA business of the Summit Power Group, LLCSummit Carbon CaptureA business of the Summit Power Group, LLC

Commercialization of CCS on NGCC Power SystemsUSEA Workshop | April 2014Sasha Mackler, Vice President, Summit Power Group

Commercialization of CCS on NGCC Power SystemsUSEA Workshop | April 2014Sasha Mackler, Vice President, Summit Power Group

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Summit Power Group, LLCSeattle-based developer of clean energy projectsFounded 25 ago by former U.S. Secretary of Energy Don Hodel & COO of Department of Energy Earl Gjelde• Flexible Development Model from fee-based, to build/own/transfer, to

asset ownership or management• World class international development teamOver 9,000 MW developedSummit’s capabilities include development, financing, & asset management of o Wind and solar plantso High efficiency natural gas fired plantso Large scale gasification facilitieso CO2 capture for EOR

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Summit Carbon Capture (SCC) is a vertically integrated developer of CO2 assets specializing in the industrial capture of CO2 for use in enhanced oil recovery projects and permanent storage.

SCC Areas of Focus• Large-scale gasification facilities with CO2 capture• Natural gas fired power plants with post combustion capture of CO2

• Retrofits of existing coal & gas plants for CO2 capture• CO2 EOR projects

SCC Competitive Advantage• Strong partnerships with leading global firms• Sophistication and flexibility in key areas of finance, policy, stakeholder relations

Summit Carbon Capture, LLC

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Summit’s Carbon Capture Focus• Developing ultra low carbon, baseload power projects to meet demand for (1)

CO2 for EOR and (2) clean electricity & fuels• Focusing on capturing CO2 from either newly built or retrofit power plants

o Based on either coal or natural gaso Technology agnostic

• Summit is currently developing one of the most advanced carbon capture projects in the world, the Texas Clean Energy Project, and developing a pipeline of otherso Summit recently bid a NGCC with CCS retrofit project into the Colorado RFPo Summit is negotiating contract with UK gov’t for CCS project with 4M tpy of CO2

• Summit is involved in shaping regulatory and policy schemes for CCS, includingo Developing new carbon credit methodology for CO2/EOR with American Carbon Registryo Strong engagement with US EPA and states on emission regs and CO2 storage rules

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• IEA World Energy Outlook, 2013 – “‘Carbon capture and storage (CCS) has been identified as an essential technology to meet the internationally agreed goal of limiting the temperature increase to 2°C.”

• Stanford Energy Modeling Forum 27 – “‘A robust finding [of the study] is that the unavailability of carbon capture and storage and limited availability of bioenergy have the largest impact on feasibility and macroeconomic costs for stabilizing atmospheric concentrations at low levels” and “..a substantial number of models were not able to produce 450 ppm without CCS.”

• Regulatory drivers, public support, and commercial opportunities are emerging…

Importance of CCS

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• Amine based capture systems are widely used in the refining and chemicals industry for CO2 separation and cleanup

Extensive commercial experience in industrial settings• Amines are adequate technologies to TRANSFER to power industry for post-

combustion capture of CO2 from power plant flue streams Next generation technologies (designed for power) will be better

• General confidence that these technologies can work in the power sector, reinforced by (1) extensive pilot projects and (2) large scale projects underway

Equipment providers are pursuing more projects, offering warranties• Commercial experience now is vital to inform the key questions on PCC viability, eg

Can the cost & performance of these projects be compelling in a power industry setting? (should not be asking “will they work?” – see above)

Observations on PCC Technology “Readiness”

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• CCS is a portfolio of technologies, some better understood than otherso Pre-combustion, Post-combustion, Oxy combustiono CO2 transportation, utilization, storage via EOR or Saline

• Commercial Drivers – Strong EOR demand for more CO2 supplieso 40 years of commercial experience handling and injecting CO2 for EORo Existing infrastructure and known “sinks”o Workable and well-understand regulatory framework for EORo But anxieties over shifting rules could jeopardize EOR as enabler

• Regulatory Drivers - EPA has (1) declared CO2 a pollutant , (2) concluded CO2 can be “incidentally stored” in an EOR flood, and (3) determined that CCS is commercially viable today and is currently working on federally enforceable emission performance standards for fossil fired power plants

o These federal rules will unavoidably become a driver for CCSo States also active

Observations on the “Emerging” CCS Market

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• The focus on CCS from research and policy bodies has been on coal plants• But commercial players in market are also interested in NGCC with CCS• No fundamental challenges for NGCC vs Coal

o Pro: Clean flue gas stream that is consistent across projects (simplifying engineering and enabling more standard designs)

o Con: Less concentrated CO2 in exhaust gas• For new plants, the economics appear to favor NGCC relative to coal with CCS

o NGCC CCS can be commercially developed in smaller units than new coal with CCS and with less technology integration than IGCC

• For retrofits of existing plants, either coal or NGCC could make senseo Economic comparison depends other installed emission controls, plant dispatch,

specific geographyo Some regions with CO2 demand have more NGCC plants to target

CCS on NGCC Power Systems

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• NGCC with CCS is viable and compares with other low-CO2 technologies• EOR will be a vital driver• Innovation in technology & in business arrangements critically important• Public support needed to (1) close cost gap between uncontrolled NGCC & with

CCS and (2) accommodate baseload dispatch• There are precedents for this if we look elsewhere

o Renewables, Combined Heat & Power• Just as we have seen for wind and solar over last decade, NGCC with CCS costs will

come down as 1. Capital structure improves2. Commercial learning occurs, which drives down technology costs and project

implementation costs3. Market internalizes policies and financing becomes standardized

CCS Deployment

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Contact Information

Sasha MacklerVice President, Summit Carbon CaptureSummit Power GroupTel: (202) 630 5585 Email: smackler@summitpower.com