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…mostly convenient truths

from a technology optimist

Vinod Khosla Khosla Ventures September 2007

• Why • Coal/CSP • Biofuels


Why “Green”?


Safe or Not?






600 M

Catastrophe 4

Arctic Meltdown
24 Years Later


Greenland Meltdown


Roger Braithwaite, University of Manchester

Increasing Melt Area on Greenland Meltdown Greenland

All melt records were exceeded in 2005.
Waleed Abdalati, Goddard Space Flight Center


Greenland Takes Out FL, NJ, NYC

Greenland is 22 Feet of Ocean Height


East Coast Underwater


Louisiana: 20’ Water Rise


Florida: 20’ Water Rise


Which Florida do we want?
Modern Florida Greenland Ice Sheet Melts

West Antarctic Ice Sheet Melts

East Antarctic Ice Sheet Melts


Florida: 2007 vs. 2107

With a 5 meter rise in sea levels…

Source: New Scientist, Jeremy Price and Jonathon Overpeck, University of Arizona






It’s Happening Now
• Within Our Lifetimes • RUNAWAY Within Our Kids’ Lifetimes • Models appear too conservative



Public Opinion
• Fox News, 2/2007 poll suggests that 82% of Americans believe global warming is real (74% of rs Republicans and 91% of Democrats)o v •

av f CNN, 1/2007 : 75% responded in favor of on ni increased regulation and restrictions on pi “to reduce the effect cars/power plants/factories n o io of global warming” lic act ub p WSJ 1/2007 poll offered 5 choices – immediate action,… some action, more research, concern

unwarranted, and unsure – 64% were in favor of some action (up from 51% in 1999), and only 8% responded that concern was unwarranted

Climate Change
Changing Insurance Models
• A GAO report notes that “Using computer-based catastrophe models, many major private insurers are incorporating some near-term elements of climate change into their risk management practices. One consequence is that, as these insurers seek to limit their own catastrophic risk exposure, they are transferring some of it to policyholders and to the public sector.”

em th ng u? ri su ’t yo in n re Increase Losses by Altering the a ould • “Climate Change May Frequency rs e or Severity of Weather-Related Events” r Sh su n • I“Insured Weather- Related Losses Have Been Sizeable, and
Federal Insurers’ Exposure Has Grown Significantly”

lv se

s! e

• “Claims Paid on Weather- Related Losses Totaled More Than $320 Billion between 1980 and 2005” 19

• •

and 1.3 billion galls of transportation fuels) • The chief economist of the US DOA estimates ethanol can be produces for $1.60 per gallon today

ng A 2006 DOE report notes that wind can generate gi electricity n and 5.93 at 5.58 cents per KW/hr, as opposed to 5.25, 5.31, ha (for natural gas, coal, and nuclear respectively) – without ec ar taking environmental impact into account n” cents pertKW/hr right e CSP can generate electricity at 9-12 iy re un now without subsidies! “g d ort f an p A recent study by the o California Biomass Collaborative Op ics (government/industry group) noted that there are 80M tons om of plant material (in CA) that could be diverted to biomass e= n ng use – 30Mo are “practically available”, and could be converted ec of electricity (equivalent to 5 natural gas plants, ha to 2,500 MW C …

“The New Math Of Alternative Energy” WSJ, Feb 12, 2007 ?

Our Current Course Business-as-Usual
(2% annual growth to peak, then 2% annual decline)
600 560


520 480 440 400 360 320


450 ppm CO2

Atmospheric CO



Gas Oil

280 1900







Defeatism or Action?

We insure our homes Why not our planet?


Good News Assertions
• Technical solutions exist
• Oil Replacement • Coal Power replacement

• Laser Focus: Scaling & Economics
• Feedstock scale • Proof for capital markets

• Policy not Technology Problem

“First they ignore you, then they laugh at you, then they fight you, then you win.” Mahatma Gandhi
We are here


Often what the Majority Believes is Wrong! • PR campaigns from “interested parties”
• Hybrids vs. corn ethanol (Toyota vs. API) • IGCC+CCS vs. Solar Thermal • Ethanol Myths

• Environmentalists vs. Pragmentalists
• Scheer Nonsense: too much of a good thing is bad • Biodiesel: land efficiency & economic sustainability • PUG Power: Wind & Solar Photovoltaics


Conventional Wisdom is Wrong
• Oil Dependence
• Food vs Fuel • CAFÉ is costly

• Electric Power : Coal is the only option • Green means Lower Economic Growth
• Higher cost than fossil • Lower economic growth, fewer jobs

Un-Conventional Wisdom
• Oil:
Replaceable with cheaper alternatives Uneconomic risk adjusted bet Need business models

• Coal:

• Efficiency:

• Lower Cost, More Jobs, More Googles

Scale of Resistance
• Saudi Arabia: $1 trillion for each $4bbl

• Exxon, Chevron, Shell, BP…

• Coal: Peabody

Cardinal Rules
• Land efficiency! • Cost (plug-ins, hydrogen) • Pragmatics: PUG power vs Greenies • Regulation permanent & Subsidies transient • Economics & Capital Formation: Business

Renewable Energy USA!
West, SouthWest have solar… Texas has wind & solar … Southeast has biomass! Rockies have geothermal! Midwest has corn/wheat belt!


Regional Co-operation!
Solar Wind Biomass Geothermal We need a power grid from California to Florida 31

Which Gamble?
…. higher startup costs, lower eventual costs? …. more jobs, more Googles or more of the same? …. competition for energy or safe oil monopoly? …. lower power costs or lower healthcare costs? …. planet insurance or catastropic relocations? …. terrorism avoidance or military expenses? …. energy insurance or Mideast dependence?

What Can We Do?
• “Top Down” Policy
• State cap & trade (CA AB32) • Low Carbon Fuel & Power Standards

• Promote Biofuels & E85

• Pumps “volume” mandate & FFV car mandate • Cellulosic RFS: “all you can supply at reasonable cost” • Feedstock: “million ton biomass centers”

• Renewable Power

• Regional Transmission : renewables first transmission • RPS or Feed-in tariffs • Health, Carbon & other costs

• Regional Collaboration

Societal Cost of Hydrocarbons
US Related Data:
• Air, water, and soil pollution from electric generation cost $14.8-90.3 billion – each year! 1 gallon of spilled oil can contaminate 1 million gallons of water! Oil pollution from automobiles causes $4.6 billion in damages to crops, rivers, forests, lakes etc
Source: Coghill Capital Management

Societal Cost of Hydrocarbons (Continued)
Military Costs:
• Strategic Military Bases ($49bn) • Oil and Gas supply route security ($20bn) • Strategic Petroleum Reserves ($30bn) • Iraq ($1 trillion! – or $275mn per day!)
Source: Coghill Capital Management

Societal Cost of Hydrocarbons (Continued)
Health Costs:
• 760,000 Chinese die each year due to air and water pollution ($99bn)! Lung disease and asthma caused by pollution ($16.1bn)! Lead, Mercury, and Arsenic poisoning from coal plants is linked to mental retardation, learning disabilities, premature mortality, and to some autism cases ($88-640bn)

Source: Coghill Capital Management

What Are Fossil Fuels’ Externalities?
Fossil Fuel Costs (Billions $USD) Low Military Base and Supply Route Security Environmental Monitoring and Clean Up Healthcare Treatment and Mortality from Pollution $49.00 Medium $75.00 High $100.00







Total Fossil Fuel Costs




Source: Coghill Capital Management

What Are Fossil Fuels’ Externalities? (continued)
The Effect on Consumers 2006 Ave. Cost Coal (Short ton) Crude Oil (Barrel) Natural Gas (mmcf) $20.49 $60 $6.80 Mid-Societal Cost $93.83 $26.68 $2.74 Total Cost/ Unit $114.32 $86.68 $9.54 Consumer Increase $0.0454 c/kWh $1.54 per gallon $0.0235 c/kWh

Mid-Range societal cost increases (generation costs only – no distribution or retail included) • • • Coal fired electric generation goes from $0.026/kWh to $0.0714/kWh Natural gas electric generation goes from $0.0615/kWh to $0.0851kWh Regular gallon of unleaded gasoline goes from $3.46 to $5.01 per gallon


Source: Coghill Capital Management

…or get to work


a renewable universe…


Khosla’s “solutions” Rules
• Attack manageable but material problems • Technologies that can achieve unsubsidized market competitiveness in 5-7 years • Technologies that scale - If it isn’t cheaper it doesn’t scale • Technologies that have manageable startup costs and short innovation cycles • Technologies that have declining cost with scale – trajectory matters

Khosla Ventures Renewable Portfolio

Nanostellar Codon Praj

Stion Ausra Altarock Infinia Great Point Energy

Quos NanoH2o
Tools Water Solar Wind Geothermal Natural Gas

Segetis eChromics Calera

Coal Materials Electrical Efficiency Building Efficiency Materials Mechanical Oil Corn/
Plastics Sugar Fuels Efficiency Cellulosic Future Fuels

GIV Seeo Newco1 Transonic Streamline Living Homes

Altra Cilion Hawaii Bio Ethos

Mascoma Verenium Range Coskata

LS9 Gevo Amyris LanzaTech


Corn/Sugar Fuels:
• Altra: Altra intends to become an integrated biofuels company in the U.S., producing ethanol and biodiesel from a variety of feedstocks • Cilion: Cilion is building destination ethanol plants, promising to be the cheapest and greenest ethanol from initially corn and incorporating cellulosic technologies as they come online. • Hawaii Bio: Hawai‘i Bioenergy’s mission is to determine the feasibility and viability of locating and operating integrated ethanol bio-refinery plants in the Hawaiian Islands. • Ethos: Ethos is developing sugar cane and cellulosic biofuels in Latin America (excluding Brazil).

Cellulosic Fuels:
• Range Fuels: Range is building the first commercial cellulosic ethanol plant in the US using a proprietary anaerobic conversion and heterogeneous catalyst technology. • Mascoma: Mascoma Corporation is leading the development of proprietary bioprocess technologies for cost-effective conversion of cellulosic biomass to ethanol, drastically reducing the need for external enzymes. • Coskata: Coskata is commercializing a fermentation technology for the production of fuel-grade ethanol from syngas. • Verenium: Verenium is a developer of biofuels derived from lowcost, abundant biomass and the developer of specialty enzyme products.

Future Fuels:
• LS9: LS9, Inc., the Renewable Petroleum CompanyTM, is combining synthetic biology and cellulosic feedstocks to make petroleum replacements from bacteria using fermentation. • Gevo: Gevo is developing technologies for the bacterial production of biobutanol from sugars and cellulose. • Amyris: Amyris Biotechnologies is translating the promise of synthetic biology into industrial production of fermentation diesel and higher alcohols from sugars and cellulose. • Lanzatech: LanzaTech is developing a proprietary fermentation technology to convert industrial flue gas from steel mills as a resource for biofuels production.

• Transonic: Transonic is using proprietary fuel injection technology to increase the efficiency of gasoline engines. • Streamline: Streamline is an engineering research and development firm using fluid dynamics modeled on natural systems to improve efficiency. • Living Homes: Living Homes builds greener, cheaper, LEEDS qualified homes using a modular system. • Group IV Semiconductor: Group IV Semiconductor is an experiment in solid state lighting. • Seeo: Seeo, an early stage company is developing polymers that allow them to develop batteries with high energy density and high cyclability. 46

Solar/Wind/Geothermal/Natural Gas:
• Ausra: Ausra is developing Concentrating Solar Power (CSP) power stations, which uses the heat of the sun to drive steam turbine power stations, and produce renewable power at low cost. • Altarock: Altarock develops and commercializes enhanced geothermal technology (EGS) for producing 100% clean, renewable baseload power. • Stion: Stion is a 4th generation photovoltaic company developing high-efficiency, low cost thin-film modules. • Great Point Energy: GreatPoint Energy is commercializing a process for converting coal and biomass into high value clean, pipeline quality natural gas. • Infinia: Infinia is developing proprietary stirling-engine technology 47 for concentrated solar power and other applications.

• Nanostellar: Nanostellar's Rational Catalyst Design methodology unites two disciplines – computational nano-science and advanced synthetic chemistry – to speed the pace of development for nanoscaled catalytic materials for diesel emissions control. • Codon Devices: Codon Devices is focused on enabling commercial applications of synthetic biology. • Praj: PRAJ, a public company based in India, has built over 300 plants in 30 countries and has global scale execution capability. It is working to provide technology and design engineering for ethanol plants across the world.


• Quos: Quos is developing a proprietary process for water desalinization which shows many advantages over reverse osmosis. • NanoH20: NanoH20 is developing proprietary membranes for existing reverse osmosis desalination plants which will increase flow and reduce energy usage while reducing the cost of water.


• eChromics: eChromics is developing a new, switchable electrochromic glass technology that will be utilized for highly energy efficient windows. • Calera: Calera is developing new, environmentally-friendlier cement for use in construction. • Segetis: Segetis is developing a variety of bio-based plastics using renewable agricultural and forestry feedstocks.


Solar Flare?

Coal Clampdown?


Electricity = biggest and fastest growing carbon problem

IEA WEO 2004 Courtesy Steve Koonin, BP




Energy use grows with development
energy demand and GDP per capita (1980-2002)
400 350 Primary Energy per capita (GJ ) 300


250 200

France Russia S. Korea Greece Malaysia UK Japan Ireland

150 100 50 0

Mexico China Brazil India 0 5,000 10,000

Smallest per capita use, Fastest growing, Largest Population
15,000 20,000 25,000 30,000 35,000

GDP per capita (PPP, $1995)

Source: UN and DOE EIA

Demographic Transformations
2003 Population 2003
N-America S-America Africa

Population 2050 2050
N-America S-America Africa

Europe Europe Oceani a Oceani a Asia Largest Segment


6.3 billion

8.9 billion

source: United Nations


Annual primary energy demand 1971-2003
Fastest Growing

Source IEA, 2004 (Exclude biomass)

Our Current Course
(2% annual growth to peak, then 2% annual decline)
600 560


520 480 440 400 360 320


450 ppm CO2

Atmospheric CO



Gas Oil

280 1900








Solution : Phase Out Coal
Alternative Case: Coal Phaseout
(+2%/yr to 2012; +1%/yr to 2022; phaseout by 2050)

Atmospheric CO 2 (ppmv)

560 520 480 440 400 360 320

450 ppm CO2

Biosphere Coal Gas Oil

280 1900







Capital Markets & Governments Changing
• Duke Energy head Paul Anderson has noted that if capital markets believed that limits on carbon emissions were inexorable, and that those who continued to emit would pay for the carbon emissions they put out, that financial priorities would shift even in the absence of any concrete Congressional action. The first announcement by the private-equity group taking over TXU was a cancellation of 8 of the 11 planned coal power plants Then the State of North Carolina forced Duke power to cancel 50% of its proposed coal expansion at Cliffside. In New Mexico, $85 million in proposed tax breaks for the Desert Rock coal plant were killed. An appeals court in Missouri ruled that the State Public service Commission had run roughshod over the public review process to approve a giant coal plant proposed by Kansas City Power and Light, reopening the Sierra Club's legal challenge to the plant Fortune reports: “These are troubling times for any company trying to build a coal-fired power plants - and more than 150 of them are being planned across America. Opposition is mounting to coal plants because they contribute to global warming. The plants are getting harder to build because activist groups try to stop them, causing delays that raise operating costs. And investors are paying attention. Federal regulation of carbon emissions, which is being actively considered by Congress, could also make burning coal more expensive.” 58

• •

How much coal and carbon risk will the market bear?

The TXU Story
• “TXU, the largest energy provider in Texas, agreed last night to a $45 billion buyout ….. The buyers have promised environmental groups they would cancel a slew of coal-fired power plants on the firm's drawing boards.” “The environmental agreement was the idea of the private-equity firms Texas Pacific Group and Kohlberg Kravis Roberts, which made it a condition of the acquisition” “TXU would back federal legislation that would require reductions in carbon dioxide emissions through a cap-and-trade system. It would shelve plans for eight of 11 coal-fired plants that current TXU executives had proposed for Texas and would drop plans to build new coal plants in Pennsylvania and Virginia. The company would also double its spending to promote energy efficiency, to $80 million a year, for five years.” “The buyout firms also promised to cut TXU's emissions of carbon dioxide, the most prevalent of greenhouse gases scientists blame for global warming, to 1990 levels by 2020. This matches the targets contained in legislation passed last year in California but exceeds anything TXU is obligated to achieve. When the three new coal plants are on line, the company's emissions are projected to be nearly 20 percent higher than they were in 1990.” ‘"Anyone doing an energy investment in today's situation has got to be sensitive of the change in the attitudes of the culture and the change in the attitudes of the country, and particularly the attitudes of Congress," said a person involved in the negotiations who spoke on condition of anonymity because the deal had not yet been announced.’ “But there are financial advantages to the environmental agreement, as well. When they acquire companies, private-equity firms typically try to cut costs rather than expand operations. TXU had estimated that the ambitious coal plant expansion would cost at 59 least $10 billion; others suggested that with soaring construction costs, the ultimate price tag could be much higher.” Washington Post – Feb 26, 2007

• •

Today’s unthinkable or tomorrow’s conventional wisdom?

Coal: Ready for Updating…

Coal Plant Age
0-10 10-20

9 32 34 16 8

99 90 58

Age (years)

20-30 30-40 40-50 50-100

24 Cummulative % %

8 Percentage

PUG Power

(utility grade power)

• Cost Effective in $/kwhr • Reliable power:
high uptime & predictable…not just when wind is blowing

• Dispatchable power:

available when customers demand power

• Peak & Base load power: • Capacity factor:

base power at base price; peak load power at peak price (12pm-8pm); no power at low load (12am-6am?)

(ideally 60%); predictable operation time daily


y …photovoltaic: expensive & notgdispatchable r ne eE 8? k …wind: not utility grade u -0 07 dD ul 20 hydrothermal …geothermal: not enough ho in s 0b re $1 he W …nuclear:mit will bear risk? who om c
…clean coal: far away & too uncertain



Standard and Poor’s Assessment
Pulverized Coal Gas (CCCT) Eastern IGCC Wind Nuclear

Capital Cost


2438 5.8

700 6.8

2795 6.8

1700 7.1

4000 8.9

Direct Generation Cost (cents/kWh)

CCS vs. Carbon Credits Cost W/CCS

12.0 6.2-7.9

9.6 7-7.7

10.2 7.1-8.7

7.1 7.1

8.9-9.8 8.9-9.8

Cost w/CO2 Credits
($10-$30 per ton)

Capital Costs: Costs of constructing the plant Direct Generation Cost: Costs of generating electricity Cost W/CCS: Direct Generation Cost + cost of Carbon Capture and Storage – total cost of electricity generation with CCS Cost w/ CO2 Credits ($10-$30 per ton): Direct Generation Cost + cost of CO2 credits – total cost of electricity generation with Carbon Credits 63
Source: Jim Harding

Photovoltaic Solar
• Expensive but declining • Available when sun shines
(not “dispatchable” for utility needs)

• Cost $.20-40kwh
(2-4x more expensive than coal)

• Economical as Distributed Power Today

Nuclear Plants Are Expensive!
14,000 Shoreham Comanche Peak 1 12,000

Installed capital costs in 2004 $/kW


Nine Mile Point 2

Watts Bar 1


Comanche Peak 2



Copyright Jonathan G. Koomey 2007

0 1970



1985 Date of first operation




Koomey, Jonathan, and Nate Hultman. 2007. “A Reactor-Level Analysis of Busbar Costs for US nuclear plants,” 1970-2005, forthcoming in Energy Policy
Source: Jim Harding


Wind Doesn’t Match Utility Demand

Demand (MW ) W ind MW


5000 MW

Utilities want to buy power when customers need it 4000

Not when the wind blows or the sun shines!

Stored power is key to increasing value of wind kwh
1000 0 1 169 337 505 673 Hour (januar y 2000)


Wind Random vs. Load Lots of power at 2am


Untrustworthy Predictions: Natural Gas
AEO projected natural gas prices versus actual wellhead prices

Source: Lawrence Berkeley National Laboratory 2006


US Electric Power: Coal Is Back
80000 70000 megawatt 60000 50000 40000 30000 20000 10000 1950 1960 1970 1990 2000 way, with plans to build more1980 than 100 coal-fired 0 year of initial operation
Other Renewables Water Nuclear Gas Oil Coal

Capacity, total by source

“As natural-gas supplies and prices have become a problem, the power industry is shifting to coal in a big

power plants in coming years at a potential cost of more than $100 billion”
As Utilities Seek More Coal, Railroads Struggle to Deliver “

Natural Gas Price

Wall Street Journal - March 15, 2006


Coal Prices
Coal Prices from 1949 to 2005 - Dollars per Short Ton
60 50 Price - in 2000 Dollars 40 30 20 10 0 1949 1952 1958 1961 1964 1967 1970 1976 1979 1982 1985 1991 1994 1997 2000 2003 1955 1973 1988

Peak 1975: $50.92

2005: $21.51



Coal Issues

• Availability • Cost • Transportation • Emissions Costs


PRB Coal Supply Bottlenecks Exist
(Star Tribune 1/16/2006)

• “Compliance Coal” price 2004 - $5/ton; $7/ton 2005; $22/ton “spot price” in 2006 plus “emission adder” • Emission credit price $1600/t • Utilities signing $25/t contracts for PRB Coal • US EPA CAIR rules (Aug 2005) restricts SO2 in 28 states • Plant modifications costs are rising

Coal Transport
• 70% of railroad traffic is coal • Coal Rail Problems cost $3B in 2005 • Spot price doubled

Wall Street Journal 3/15/2006 As Utilities Seek More Coal, Railroads Struggle to Deliver Testimony of David Wilks, President Energy Supply Xcel Energy, Senate Committee on Energy and Natural Resources, 5/25/2006

Coal Transportation Erratic
(WSJ, Mar 15, 2006)

• • • •

r? e w “as contracts expire …. utilities po forced to are or pay 20-100% more” al co al? rt electric industry… in a “railroads have put po r co the ns ol o potential crisis tsituation” ra n e tha Arkansasld w E costs up 21% because of Electric ou coalSh delivery Congress to hold hearings on coal delivery

Coal - transport
• Nearly ½ of railroad use to transport coal • 150 new coal plants (proposed) would equal line of 10-ton coal trucks circling the Earth 3 times each year


Carbon Pricing Hurts Coal

One ton of coal produces 3 tons of Carbon Dioxide Effective cost of coal = 3-6 X greater


Coal Risks: Coal plant costs have continued to rise!
(NPR, Jan 17, 2007)

• Westar Energy VP: When we started the process, an 800 megawatt coal plant cost approximately $1 billion… today, the cost is closer to $1.4 billion • Westar VP “That’s a very rapid run-up in the cost of building a new coal plant” (40% in 18 months) • Black and Veatch is advising clients to assume there will be an additional cost associated with Carbon emissions – to build now without considering the future would be a “risky proposition”

Plant Costs Continue to Rise!
• “the price of a coal-fired power plant has risen 25 percent to 30 percent.”

Source: NY Times

Coal Capital Costs


Projections Are More Conservative Than Reality
Type B&V Projected - New Coal (SC) B&V Projected - New Coal (SC) B&V Projected - New Coal (SC) B&V Projected - Coal - IGCC B&V Projected - Coal - IGCC B&V Projected - Coal - IGCC Big Stone II, South Dakota (Otter) - PC Kansas (Westar) - PC Springfield, IL - PC Cliffside (Duke Energy) – PC West Virginia (AEP)– IGCC Mesaba (Excelsior) – IGCC FutureGen – near zero emission demonstration plant Approval granted in 2007 Commence ops in 2012 Review on hold Commence ops in 2012 at earliest Install Date 2005 2010 2020 2005 2010 2020 Construction starts mid-2008 Cancelled Capital Cost ($/kW) – 2006$ 2,120 2,180 2,240 2,750 2,840 2,840 $2,168 $2,333 $2,500 $3,000 $3,500+ $3,593 $6,000+

Source: Projections – Black and Veatch, Cost estimates from UCS, NyTimes, Other news sources

Is Carbon (CO2) risk being ignored?


Implications of Carbon Costs

$100/tC (≈ $30/t of Carbon Dioxide) Carbon emission charges in the neighborhood of $100t/C can enable commercialization of most of the wedges to combat global warming Form of Energy Equivalent to $100/tC Gasoline 25c/gallon Crude Oil $12/barrel Coal $65/U.S. ton Natural Gas $1.50/1000 scf Electricity from coal 2.2 cents / kWh Electricity from natural gas 1.0 cents /kWh Today's global energy system $700 billion per year (2% of GWP)

What is the cost of future CO2 limits in the US?

Source: Synapse Energy Economics, Climate Change and Power: Carbon Dioxide Emissions Costs and Electricity Resource Planning, May 2006.

Carbon Dioxide prices Pulverized Coal Uneconomic



Levelized Cost



$8/t, $55/mwh


$19/t, $66/mwh


$30/t, $77/mwh







50 83

Cost of CO2 ($/ton)
Source: EIA, “NEMS EMM Factors for AEO06,” spreadsheet, 2006, and Synapse, 2006. The costs are representative of a new coal plant built in the Midwest in 2015.

Is coal an effective way to avoid carbon?
a sample projection
350 300 250

Cost per Ton of CO2 Avoided


200 150 100 50 0 SC UCS IGCC NGCC

Assume 85% capacity factor for all technologies. Source: : “IGCC: Next Step on the Path to Gasification-Based Energy from Coal,” Robert H. Williams, 2004. Cost estimates similar to estimates in “The Cost of Carbon Capture,” by Jeremy 84 David and Howard Herzog (2000) and “Evaluation of Fossil Fuel Power Plants with CO_2 Recovery,” NETL (2002). Compilation: Sylvia Smullin

The Cost of CCS

• “When CO2 capture is considered, the cost of electricity produced by IGCC would be increased by 30 to 50% over that of supercritical PC without capture, or 25 to 40% over that of IGCC without capture (Table 3.7). However, for supercritical PC with CO2 capture, the cost of electricity is expected to increase by 60 to 85% over the cost for supercritical PC without capture.” • “Coal plants will not be cheap to retrofit for CO2 capture. Our analysis confirms that the cost to retrofit an air-driven SCPC plant for significant CO2 capture, say 90%, will be greater than the cost to retrofit an IGCC plant.”
Source: MIT Study -

The Problems with CCS
• The “Wedge Theory” from Princeton professors Stephen Pacala and Robert Socolow suggests that burrying 1b tons of Carbon by 2050 could provide approximately 1/7th of the total emissions we need in the period • •

on rb do ca r te fo a tr (greater than 2X the total CO 1B Tons of Carbon = 3.6B Tons of CO s ow e emissions from coal plantsqu today) ,h e ed t? e! t sengineer c directs the Global Climate and u who or ’ “Lynn Orr, a petroleum nStanford University, estimates thatlto m a billion aat prod nsp Energy Project c underground, the total inflow of CO2 would be roughly o ustore tons of carbon e totalioutflow ofraand gas today.” v s w equal to the it t oil f oil I w estimates that= re from MITe estudy “A new capture h will raise the wholesaleme ofdeploying carbonnew coaland w storage lu be a conservative estimate--other o price electricity from plants by 50 percent (this may studies have put the price nearly twice as high).” nv bo ar $4 billion to eliminate the carbon dioxide generated by “It would cost C in the Carolinas” (The News Observer, March 27, 2007) power plants


The Problems with CCS …
• The Australian program “Catalyst” had an apt description of what liquefaction and subsequent sequestration means: “Well this drum holds 200 liters. Imagine a pile of these drums that runs for 10 kilometers that way, 5 kilometers that way, and stacks up 10 drums high. More than 1300 million of them. That’s how much CO2 pours out of our 24 coal power stations. Not every year, that’s just in one day. Now the gas has to be compressed into a liquid to inject it underground. But even that leaves a huge volume to process. It squashes down into a lake of drums 1 kilometre square. And remember, that’s’ every day.”


No Sequestration in the Carolinas
• A US DOE report found that certain areas of the US where coal is produced (such as the Carolinas) “lack the proper geology to trap the gas” •

st ue s eq t i ts ei ch ? n’ er u network ca the h m Instead, they require construction of a pipeline e the gas all the way to Kentucky, Westeed to f w transport l w how n Virginia, a sites. The cost of this network (for just the I other offshore d, and co is roughly $4 billion, on lly all the other e Carolina plants) csequestration. The top of this poses ea problem r costs associated u d withif wewe overcome the higher costs ro is significant – even p carbono could associated with many coal and still-large e d emissions of the nation’s largest coalplants, the c geographies some aregions makesofsequestration an unlikely possibility. producing sp

te ra

The Problems with CCS (Safety)
• Carbon leakage remains a potential problem

l he t rs ea b ho W bears the liability for CO • Who

• “Even tiny leaks undermine the value of burying carbon; some experts estimate that an annual leakage rate of 1 percent could add $850 billion per year to overall costs by 2095.”

bi ia

y! lit

leakage into the


IGCC+CCS= Risk, risk & more risk!
• Cost of IGCC & PC plant construction • Technology risk • PC & IGCC: Cost of coal & pollution regulations
• Coast of coal • Cost of transportation • Cost of carbon dioxide


• Coal Externalities

• Cost of transporting liquid/high pressure carbon dioxide • Cost of sequestration • Who will provide insurance against release? • health care liability • Sludge & mercury liability • Carbon dioxide liability (per Supreme court decision)

Who wants to be a millionaire?
(Starting with $150 billion)

91 Knowing each plant =600,000 cars of liability


ho se

$1 50

bi lli on ?

 It provides about 50% of the electricity in the US  The vast majority of reserves are mined within the US  Has the potential to supply our electrical needs for at least 100 years (though the number may vary)


 Significant environmental problems  Damage to land from mining, water from various sources (acid runoff, heavy metals), and air (single largest contributor to greenhouse gas emissions)


We’re using the atmosphere as our sewer


The Face (Externalities?) of Coal

China GDP growth = China environmental damage? & health care costs?

Source: “Concentrated Solar Power Potential in China”, Deepak Boggavarapu PhD

Environmental impacts of coal power: pollution
• Typical Coal Plant: – 3,700,000 tons of Carbon Dioxide – 10,200 tons of nitrogen oxide (NOx), – 10,000 tons of sulfur dioxide – 720 tons of carbon monoxide – 220 tons of hydrocarbons, volatile organic compounds (VOC) – 225 pounds of arsenic – 170 pounds of mercury – 114 pounds of lead – Up to 2.6 tons of uranium and 6.4 tons of thorium


The Effects of Coal: Raw Numbers
• Typical 500-MW coal plant: more than 125,000 tons of ash and 193,000 tons of sludge • Toxic waste -including arsenic, mercury, chromium, and cadmium •

on ir nv e ! e an nac A 1,000 MW coal-fired isof me plant : 5.2 tons alUranium per year of Co Thorium and 12.8 tons per year of

e m

al nt

• 3X as much sludge as all municipal waste in US
Source: ORNL, UCS


Air pollution from power plants causes health problems:
• Coal pollution can cause and exacerbate heart disease, lung cancer, and other respiratory ailments

rt ou a t C exyears-lost for those who die e de • Average n 14 of m oxi e prematurely from re exposure to particulates th p di … Su on e pollution is thent of 38,200 • Power h plant arb t ta cause … dc non-fatal heart attacks and over 24,000 llu le deaths in the US each year po premature ru as
97 Source: Clean Air Task Force, June 2004.

es b

s? to

Air pollution from power plants causes deaths
…guess where all the coal power plants are?

Deaths per 100,000 adults range from <1 (blue) to >30 (pink)

Source: Clean Air Task Force, June 2004.

“Pulverized coal” plant incurs high health costs
Health Costs of Pollution from Power Plants
35 Cost (cents/kWh) 30 25 20 15 10 5 0
1997 Average US Coal Plant 2004 BACT Coal IGCC NGCC

Mean cost for 2004 BACT coal = 2.3 cent/kWh. This means that coal-generated electricity in the US annually incurs $46 bill in health costs 99
Source: Robert H. Williams, 2004.

Coal’s World is Changing
• 7 of 12 utilities considered carbon risk • 10 of 12 plans will consider in next round • Calif. PUC requires utilities to include “adder • Initially $8 /ton • +5% per year ($27/ton by 2030)

Source: Union of Concerned Scientists

Growing support for Regulation
• Six of nation’s top 10 power companies support federal CO2 cap-and-trade legislation

an is ion • 2004 Survey: 50% of power executives expected lat egu ity! CO laws within 5 years s r bil ion ita iss m ev ECO limit support: Wal-Mart, GE, Ford, Google, in •
2 2

PG&E • US Climate Action Partnership: “as quickly as possible” – seeks 10-30% emission cuts within 15 years and


“Nobody in their right mind should be building a coal plant”
• "It's the definition of financial insanity to invest in a new coal plant," agrees Marc Brammer, head of research for consulting firm Innovest Strategic Value Advisors. •

• •

ot en n iv re l g a a "It's very likely the investment decisions many are making, ts gic to build long-lived high-carbon-dioxide-emitting power n live awe'll all o to regret," warns Viceplants, are decisions l Pl oflEntergy Corp. (ETR ), which owns President Gary Serio l y ks! several coal plants. l oa ica ris C Those companies "could be really jeopardizing their om the warns one utility executive. stockholders' investment," on ec us so I can do my job,” pleaded a high-ranking EPA “Sue
official. “My boss doesn’t believe that enforcing the Clean Air Act is a priority,”

Source: Business Week

Coal An Expensive Mistake!
Florida Capitol News, April 18, 2007 • “The power company could face between $120 million and $400 million in annual penalties for emitting carbon dioxide under a raft of proposals floating through Congress that are aimed at combating global warming, said David Schlissel, a senior consultant for Synapse Energy and Economics.” •

re sa nt ! e ts tm be es s nv ou l i er oa ng Cprudent to expect that a policy to regulate ‘''It's da

climate change will be put into effect in a way that should concern utilities that are building coal power plants,'' Schlissel said.’

Pressure from Investors
• Investor Network on Climate Risk
• manages $3 trillion in assets • 5 times bigger than in 2003

• Carbon Disclosure Project (international)
• manages $31 trillion in assets

• Major banks firms analyzing CO2 risk, trying to reduce exposure • Banks under pressure to avoid financing new coal plants


Shareholders versus ratepayers
• Two lines of case law suggest shareholders should bear risk for investment mistakes – Prudent investment: was the decision to invest -and to keep investing when circumstances changed -- prudent when made? If not, no rate recovery – Shared costs: even if the decision was prudent, shareholders should bear some of the costs of the unsuccessful investment • Focus on creating ongoing incentive to reevaluate investment decision

Western US Coal Plants

Current Planned


Conventional Wisdom:“250 Years of Coal”
• 50% US 2005 Coal from Powder River Basin • 136 Gtons (109 Gt remaining) • Using 1 Gt/ yr

USGS, Evaluation of Economically Extractable Coal Resources in the Gillette Coal Field, Powder River Basin, Wyoming 02-180 2002


Peak Coal?
– “the data quality is very unreliable,”

l do oa hc – since 1986: all nations with significant coal ? uc ft resources m (excepting India and Australia) that le e updated reserves estimates have reported substantial downward resource ow av H revisions. ly h al re present and past experience does not – Conclusion: “the we common argument that reserves are support the
– China’s last update = 1992; 20% consumed since, though no update in its figures! – World’s in-situ resources of coal: 60 percent downward revision in 25 years.

increasing over time as new areas are explored and prices rise.”

From The Energy Watch Group report, “Coal: Resources and Future Production,”

Renewable Energy from State Standards* BIG MARKET: BIG CARROT
55,000 50,000 45,000 40,000 Megawatts 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2000 2005 2010 2015
New renewable energy supported: - 46,270 MW by 2020** Equivalent to: - 17.7 million less cars



*Projected development assuming states achieve annual renewable energy targets. **If achieved, IA, IL, and ME goals would support an additional 4,400 MW by 2020.

Washington: 15% by 2020

Renewable Electricity Standards Twenty One States
MN: 27.4% by 2025* IA: 2% by 1999* MT: 15% by 2015 WI: 10% by 2015 NY: 24% by 2013 IL: 8% by 2013**

ME: 30% by 2000 MA: 4% by 2009

“No Choice” on renewable power BIG STICK
NV: 20% by 2015 CO: 16.1% by 2020 CA: 20% by 2010 AZ: 15% by 2025 NM: 16.2% by 2020 TX: 5,880 MW (~5.5%) by 2015 HI: 20% by 2020

RI: 16% by 2019 CT: 10% by 2010 NJ: 22.5% by 2020 DE: 10% by 2019 MD: 7.5% by 2019 D.C: 11% by 2022

PA: 8% by 2020

Standard Standard and Goal Goal

 21 States + D.C.

*MN has a 30% by 2020 standard for Xcel Energy, and a 25% by 2025 standard for all other utilities. CO and NM  have a 20% by 2020 standard for investor­owned utilities, and a 10% by 2020 standard for other utilities.  ** In addition to their requirements, IA has a 1,000 MW (~10%) by 2010 goal, and ME has a 10% new resources by  2017 goal.  IL has a renewable energy goal, with no specific enforcement measures.


Good news on Alternatives

Solar Thermal


…solar thermal (CSP)



8 inch deep layer of oil annually

Humans will use 15 in 2050

100,000 Terawatts


A Technology Crisis …not a Resource Crisis!
• Scalability • Cycle Time to Use • Cost Competitiveness


Scalability : Land For All Electricity

All Worldwide Electricity

Carlo Rubbia, SolarPACES2006

USA… Looking Good
Germany: 57% world PV US: 7% world PV

Creating a U.S. Market for Solar Energy, by Rhone Resch, President of the Solar Energy Industries Association.

Area requirements to power the USA
(150 km)2 of Nevada covered with 15% efficient solar cells could provide the USA with electricity ½ as much land with 30% efficient turbines


J.A. Turner, Science 285 1999, p. 687.

How Much California Land?
2005 Load: 52 GW 2020 Load: 69 GW

All New Load
Through 2020: 17 GW (15x15mi) Shut All The Coal Plants

Close All Non-Hydro


1st Generation 2nd Generation 3rd Generation 4th Generation

Si [15- 18%] Sharp, Q-Cells, Kyocera, Sanyo, Mitsubishi, SunPower •Crystalline ingots, wafers •Diffused and screen printed unit cells •Assembled modules

a-Si, [7-9%] Schott Solar, EPV, Fuji Electric, Unisolar •PECVD deposited •Silicon multijunction thin films on flexible or rigid substrates

CdTe, CIGS [10-12%] Shell, Honda, Daystar, First Solar, Nanosolar, Miasole, Heliovolt •Sputtered or evaporated reactive compounds •Complex, esoteric and hazardous

MOS [25- 30%] Stion

•Thin films with straightforward processing •Readily available, low cost and environmentally benign •Fully integrated 120

Source: Sunpower

Source: Applied Materials

Photovoltaic Cost Trajectory
• Module Prices Falling • System Share Of Cost Is Growing • With zero cost modules Systems at $2/Wp • Annual capacity equals China’s weekly needs


Costs Including Storage
• PV @ $3-5/Wp • •

• •

ey k Total ≈$30/Wp for a 60% capacity factor he l t Thermal CSP $3-7/W for 60% s CF l i coa a rm g of he i n t rcents kW/h PV @ 22.4 a turn ol o S Current Thermal CSP at 16 cents kW/h t
– A 700MW plant means 7.1 cents kW/h!

PV cost reduced from , other reports PV storage: ½ reported battery cost CSP: Black & Veatch, CA study 4/06

We Need To Work On
• Higher Efficiency Cells! • Leverage Systems/BOP Cost • Manufacturing Scaleup!! • Batteries and Storage • Beyond Vanadium Flow Cells, Li-Polymer, Beyond Lead-Acid, $/kWh – need 5x • Not Concentrators? • Adding BOP cost, reducing cell cost

Cycle Time to Use
• Oil & Coal – millions of years • Gas & Clathrates –100,000’s? • Biomass – 1 -10 years • Thermal Solar – ? • Photovoltaic Solar - instantaneous


How Soon Is Solar Competitive?
» Residential:
• $.20+/kWh average • Maximum scale limited to 10% • Subsidy dependent

» Centralized:

How Long Is Coal • Gas Peaking $.16/kWh • Gas CC $.10/kWh Competitive?
• Coal $.06 /kWh • Cost sensitive to carbon price

California CSP : better than “next best”
•CSP: lower cost power than combined cycle gas plants •CSP creates 2-7X more jobs than gas plants •Per GW CSP reduces CO2 by ~2mt/yr worth $38m/yr •CSP provides hedge against fluctuating commodity prices
Source: NREL subcontract report by Black & Veatch, April 2006


Three Gorges Dam

CSP would generate 1.7 times the power in same land area at significantly lower capital cost and faster construction time.
~18 GW generating capacity >25 years planning and construction ~1.3 million people displaced ~630 sq km reservoir >$50B estimated actual construction cost

Source: “Concentrated Solar Power Potential in China”, Deepak Boggavarapu PhD


CLFR plant with same annual power Output as Hoover Dam

Ausra CSP vs Hydro
• Glen Canyon • Built 1956, $300M • $2.222B in 2006 $ • $693/MWha • Ausra CSP in US SW • 500MW with storage • $1.802B in 2006 $ • $562/MWha

• 3,208,591 MWh ’05 • 3,209,038 MWh/yr

Operating Status of SEGS Parabolic Trough Plants
14000 12000 Net Electric Production [GWh] 10000 8000 6000 4000 2000 0
19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 01 20 02 20 03
Annual GWh Cumulative GWh

13 TWhe Solar Thermal Power since 1986

The CSP Technologies







Power Towers

Solar Two, 10MW, Barstow, CA

Parabolic Troughs


olar Electric Generating Stations, 354MW, Boron and Harper Lake, CA



A 5MWt CLFR collector 100’ x 1000’



Ausra CLFR
Benefits of CLFR: • • • • • • • Sturdy, low cost construction Primary components steel, glass, water Efficient use of land Air cooled; minimal water use No toxic materials Easily protected from hail and dust storms Can by hybridized with fossil fuel plants


Liddell Project


Solar Thermal Power Plant
Up to 20 hours energy storage 280C 50bar

Increase capacity factor by building larger solar field. Basic 180MW plant is 640 acres

Copyright © Ausra, Inc.141 2007

Solar Correlates with the Load
Daily Power vs Solar Availability
120.0 100.0 % Power % Power 80.0 60.0 40.0 20.0 0.0 1 3 5 7 9 11 13 Hour 120.0 100.0

Daily Power vs 2x Solar Field Availability


80.0 60.0 40.0 20.0 0.0 1 3 5 7 9 11 13 Hour 15 17 19 21 23 Series1 Series2

Series1 Series2

15 17 19 21 23

Solar Highly Correlated with CA loads Timeshifted a few hours Very predictable and steady (10%)

Larger Solar Array “Clipped” At Max Output Power More Hours of Peak Load Served


Time-Of-Day Pricing
• PG&E (Northern CA) Summer • Noon – 8pm : 1.95x “nameplate” $/kWh • Coal, Wind get “nameplate” average price • Solar gets 1.2x “nameplate” price • Solar With Storage can get 1.5x


Storage is Essential
• 24 hour power vs. 5 hour peak sunlight • Batteries, Flow Cells, Compressed Air, Pumped Hydro, SMES: $300-1000/kWh • Thermal Storage: $15/kWh demonstrated


Storage For Time-shifting
To Storage

8 hour peak load vs. 5 hour peak sunlight From Direct Solar Storage From 6 hours of storageSolar Direct increases revenue Storage Direct Solar 50% Shift Output To Peak Hours

Plant Output

6 AM

9 AM

12 PM

3 PM

6 PM

9 PM


Time of Day

CA Electric Power
Capacity, MW Simple Cycle Gas, PEAKING 85 Combined Cycle Gas, INTERMEDIATE 500 Pulverized Coal, BASE 1500 PV, 2006 1 Parabolic Trough 100 Storage, Capacity hours Factor Nom LEC, Nom LEC, 30%ITC 10%ITC





n/a n/a 0 0 6 0

40.0% 65% 25% 28.4% 40.4% 25.0%

104.0 45.0 200. 154.0 120.0 107

104.0 45.0 250. 173.0 134.0 120

Parabolic Trough 2011 150 Luz2 DPT 150MW 150

Black and Veatch, Economic, Environmental, and Energy Benefits of Concentrating Solar Power in California, April 2006; PV DPT Luz2

Cost of Power by Type
200 180 160 140 120 100 80 60 40 20 0 0

Gas CC Nuclear


Solar Peaking Pricing

Coal IGCC Coal PC Coal IGCC + CCS Gas CT

Solar Baseload Pricing
10 20 30 40 50

$/t CO2

Cost of Power by Type
200 180 160 140 120 100 80 60 40 20 0 0

Gas CC Trough 2007 Nuclear

Gas CC

Solar Peaking Pricing

Trough 2011 Coal IGCC DPT 2007 Coal PC DPT 2011 VK 2011 Coal IGCC + CCS


Solar Baseload Pricing
10 20 30 40 50

Gas CT

$/t CO2

Net Impact of Time-Of-Day (Including Power by Type Cost of Thermal Storage)
200 180 160 140 120 100 80 60 40 20 0 0

Gas CC Nuclear


Solar Peaking Pricing

Coal IGCC Trough 2007 Coal PC 2011 Trough Coal IGCC + CCS DPT 2011
DPT 2007 VK 2011 Gas CT

Solar Baseload Pricing
10 20 30 40 50

$/t CO2

Key Issues for Thermal CSP
• Back End Power Block
• Turbine/Engine Efficiency

• Concentrator and Receiver
• Mirror $ / m2 dominates total system cost


Poised for Breakaway Growth?
• Crossing Gas Prices • Meeting IGCC Prices (2008-09) • Meeting Pulverized Coal Prices (2008-09) • Large Capital Flows Will Follow Costs


Policy Needs?
• Stable ITC • Level tax playing field • Transmission Priority and Grid Upgrades • Startup loan guaranteed for initial plants


Power to the Nation: HVDC

153 153

A New Federal Subsidy Program
• Farm Subsidies 2006: $26 B » Stabilization, Preservation of Farms, Non-Production

• Total Coal Revenues: $12 B » Profits $1.2B • Let’s Subsidize COAL: $1.2 B » Replace profits for NOT DIGGING COAL » Lowest Cost, Highest Reliability Sequestration


Renewable Energy Economics
Benefits of a 20% by 2020 RES

• $72 billion in new capital investment • Benefits to rural America, including 30,000 jobs • $49 billion in lower electricity/natural gas bills • Estimated $10.2 billion increase in GDP


… with positive local impact
• Each 100mw of CSP: 94 permanent jobs,
• versus 56 for combined cycle gas plants

• Each 100mw of CSP: $628 million gross state output
• compared to $64m for the combined cycle plant


Source: Black & Veatch, 3/06

…and our greatest opportunity
• “CSP power plants, constructed primarily of concrete, glass, and steel, can be quickly constructed and brought on line.” • “With access to adequate transmission, CSP could provide inexpensive carbonfree electricity to the entire country.”
– US DOE Solar Technologies Program CSP 2009 Initiative

Geothermal Potential
Geothermal Potential in the United States

10¢ kW/hr

1,251,351 MWe

12¢ kW/hr

7,188,200 MWe

Source: Matthew Clyne, Black Mountain Technology, MIT

EGS Technology
How it works


…or get to work


Biofuels Think Outside the Barrel


Implausible Assertions?
We don’t need oil for cars & light trucks We definitely don’t need hydrogen! We don’t need new car/engine designs/distribution Rapid changeover of automobiles is possible! Little cost to consumers, automakers, government

RISK: Oil vs. Hydrogen vs. Ethanol
Oil Energy Security Risk Cost per Mile Infrastructure Cost Technology Risk Environmental Cost Implementation Risk Interest Group Opposition Political Difficulty Time to Impact
Source: Khosla

Low Low Med-High Med­High Very High Very High Very High Very High Med­Low Med-Low Very High Very High High High High High Very high Very High

Low Low Low Low Low Low Med Med Low Low Low Low Low Low Low Low Low Low

High High Med Med Very Low Very Low Very Low Very Low Very High Very High Very Low Very Low Very High Very High ? ? ­ -

OPEC’s Economic Effects

Source: Coghill Capital Management

Ethanol Supply Projections

Capacity (Billions Gallons)


E85 is ten times larger than blending market We must kick start E85 Market the E85 market!!
Additive Market
20 07 20 09 20 11 20 13 20 21 20 23 20 25 20 15 20 17 20 19 20 27


Total Ethanol Capacity Corn Ethanol Production Corn Ethanol Production


20 05


20 29


What’s Possible
Year Biomass Acres Yield Planted Tons/acre (millions) Cellulosic Ethanol (billion gals) 4.4 24.8 124.4 Corn Ethanol (billion gals) 12.0 14.6 14.6 Total Ethanol (billion gals) 16.5 39.4 139.0

2012 2017 2027

8.9 12.5 23.1

5 19 49

Replace most of our imported oil in twenty years!

Area to replace GASOLINE in USA

50m Acres replaces all our gasoline!


Why Now?

Projected World Oil Prices (EIA)

Alternative Technology Viability Zone

Source: EIA Reports

Energy Balance Not Your Father’s Ethanol

Gasoline (Tar Sands)


Ethanol (Corn Coal)

Ethanol (Corn Wet Grains)

FT (Coal CCD)

Different corn ethanol production methods have different emissions
FT (Coal) FT (Coal CCD) Gasoline Ethanol (Today)

CO2 emissions from alternative fuels

FT (Coal)

Gasoline (Tar S ands)

Ethanol (Corn Coal)

Ethanol (Corn NG) Ethanol (Corn Wet Grains) Ethanol (Corn No- Till) Ethanol (Corn Biomass) Ethanol (Cellulose)

Ethanol (Today)


Ethanol (Corn NG)

Ethanol (Corn No Till)

Ethanol (Corn Biomass)


Ethanol (Cellulose)

1 0


-1 0

Cellulosic ethanol can achieve dramatic greenhouse gas reductions …even negative emissions 169

Source: NRDC

Ethanol (Cellulose CCD)


Ethanol (Corn Biomass CCD)

Typical corn ethanol production reduces carbon emissions 20%

Ethanol (Corn Biomass CCD) Ethanol (Cellulose CCD)

NRDC Report - “Ethanol: Energy Well Spent”
“Don’t let the perfect be the enemy of the good” • “corn ethanol is providing important fossil fuel savings and greenhouse gas reductions” • “very little petroleum is used in the production of ethanol ….. shift from gasoline to ethanol will reduce our oil dependence” • “cellulosic ethanol simply delivers profoundly more renewable energy than corn ethanol”


Liters of ethanol produced per hectacre since between 1975 to 2004

Brazil sugar-cane/ethanol learning curve

Rendimento Agroindustrial – Brasil
6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500

(em litros de álcool hidratado equivalente por hectare)


+3,77% aa em 29 anos

08 Nov 2005

19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03
Fonte: Datagro
Nastari / Datagro @ Proálcool 30 anos 11


Technology Progression
l ica m che rmo The

Synthetic Biorefinery Bio eng ine Gasification eri ng

Fue ? l Ch ng solutions …alltaimproving al Modeli em n istr ompu tio C y trajectory Corn Ene rgy cro Algae ps Pla nt y log Br Bio ee Sy s t ic din Cellulosic Bioethanol ems het nt g Biol Sy ogy172

Many companies, multiple

Energy Crops: Miscanthus
1 years growth without replanting!

Little water, little fertilizer, no tillage, lots of biomass, ….energy crops make it possible
20 tons/acre? ( 10-30 tons/acre (

Energy Crops: Sorghum

25 tons/acre (Prof. Holtzapple- Texas A&M)


The perennial advantage
• Annual crops rely more heavily on human inputs. Humans can only respond to environmental changes on the scale of months or seasons and hectares or square kilometers.


annua Dec l




12 mos


Biomass Will Make a Difference
Turning South Dakota into…
Today Farm acres Tons/acre Gallons/ton Thousand barrels/day 44 Million 5 60 857 Tomorrow 44 Million 15 80 3,429

…a member of OPEC?!
Thousand barrels/day Saudi Arabia Iran South Dakota Kuwait Venezuela UAE Nigeria Iraq Libya Algeria Indonesia Qatar 9,400 3,900 3,429 2,600 2,500 2,500 2,200 1,700 1,650 1,380 925 800

Source: Ceres Company Presentation

Large Improvements Are Visible
Ethanol Yields Up & Up & Up
3,500 3,000 Gallons per acre 2,500 2,000 1,500 1,000 500 0 2000 2005 2010 2015 Time 2020

Conservative Cellulosic (24tpy/108gpt)

Sugar Cane + Baggasse (11 tpy/102gpt)

Brazil Energy Cane

Cellulosic (10tpy/100gpt) Corn, Cellulose, Cane Today  Biodiesel
2025 2030 2035


Myths Galore!
• Energy Balance – not your father’s ethanol • Not enough cropland – only if you try to make pigs fly! • Food prices or the best thing for poverty? • Lower energy content, lower mileage – in which engine? • More expensive or poorly managed? US oil or Saudi oil? • Existing infrastructure – for E85 or additive? Some or all pumps? • Dubious environmental benefits – as additive E20 or E85? • Cellulosic ethanol – real or not? • Free marketeers hell or level playing field?


My Favorite FFV . . .

Optimized for ethanol and gasoline both & mileage differences can be small!

SAAB 9-5 with E85

A Darwinian IQ Test?
• Feed mid-east terrorism or mid-west farmers? • Import expensive gasoline or use cheaper ethanol? • Create farm jobs or mid-east oil tycoons? • Fossil fuels or green fuels? • ANWR oil rigs or “prairie grass” fields? • Gasoline cars or cars with fuel choices?

DOE went looking for 3 projects…


Lots of variability…
Company Tech Abengoa Alico Bluefire Broin Iogen Range Bio Hybrid Bio Bio Bio CapX/ G ($) 15.8 5.6 5.0 6.1 10.5 Capacity Yield/ton (MGPY) 11 49 14 19 31 18 40 55 82 112 78 101

Thermo 4.5

“The War on Oil” …weapons from the “innovation ecosystem”


Biofuels Feedstocks & Pathways …
Natural Oils
Transesterification Methanol/Ethanol Fermentation ETG via catalysis
Glycerin Ethanol, Butanol, Renewable Petroleum FermDiesel Biogasoline Dimethylfuran Gasoline, Diesel, Hydrocarbons

BioDiesel (FAME or FAEE)

Sugars/ Starch

Catalytic Conversion Catalysis and Aqueous phase Reforming


+ Sunlight – CO2

Cell Mass


BioDiesel (FAME or FAEE)

Fermentation Cellulose/ Hemicellulose Acid or Enzyme Hydrolysis Saccharification C6, C5 Sugars

Ethanol Butanol Diesel


Mixalco Process Microbial cultures Gasification Syngas

Mixed Higher Alcohol Methane

Syngas Fermentation Fischer-Tropspch catalysis


BTL Diesel



Biofuels Feedstocks & Pathways …
Natural Oils
Transesterification Methanol/Ethanol Fermentation
Glycerin Ethanol, Butanol, Renewable Petroleum FermDiesel

BioDiesel (FAME or FAEE)

Sugars/ Starch

Feed Cost

ETG via catalysis Catalytic Conversion Catalysis and Aqueous phase Reforming

Biogasoline Dimethylfuran Gasoline, Diesel, Hydrocarbons


+ Sunlight – CO2

Cell Mass


BioDiesel (FAME or FAEE)

Fermentation Cellulose/ Hemicellulose Acid or Enzyme Hydrolysis Saccharification C6, C5 Sugars

Ethanol Butanol Diesel


Mixalco Process Microbial cultures Gasification

Mixed Higher Alcohol Methane

Feedstock Syngas Supply Volume

Syngas Fermentation Fischer-Tropspch catalysis


BTL Diesel


Increasing Technological Difficulty


Imperium Renewables, FutureFuel, etc.

transesterification hydrocracking

Vegetable oil Sugar/starch
Companies involved in feedstock improvement Monsanto DuPont Syngenta Allelyx CanaVialis Mendel Biotechnology Ceres Bical Energy Agrivida Edenspace Teri Praj

Choren Cilion, Altra Verasun, Aventine, etc. Poet ZeaChem BP-DuPont Biofuels Gevo Advanced Biofuels Green Biologics Cobalt Amyris Biotechnologies LS9 Virent Energy Systems GreenFuel Aurora Biofuels LiveFuels PetroSun Mascoma Verenium Iogen, Abengoa Bioenergy, Poet, SunEthanol, TMO RangeFuels Coskata BRI Energy Terrabon

Fatty acid esters (biodiesel) Diesel

dry mill yeast fermentation ethlyacetate production/hydrocracking bacterial fermentation

Ethanol Ethanol Butanol Diesel/gasoline “Biocrude” Diesel/gasoline “Biocrude” Lipids Fatty acid esters Ethanol

Synthetic biology/fermentation

Aqueous phase reforming growth with CO2 and light/ transesterification of hydrocracking


enzyme hydrolysis/fermentation


•Agricultural •Forestry

gasification/catalysis or syngas fermentation biopile fermentation/catalysis Catalysis/pyrolysis CO fermentation acid hydrolysis/fermentation thermal depolymerization

Ethanol Mixed alcohols Fuel oil/diesel Ethanol Ethanol Fuel oil


BIOeCON, FES LanzaTech BlueFire Ethanol Changing World Technologies

•Flue gases •Municipal waste •Municipal sewage •Recyclable plastics


The Near Future…
Natural Oils


Glycerin Ethanol – Sugar BioDiesel (FAME or Fermentation FAEE) Methanol/Ethanol Ethanol, Butanol, Renewable Petroleum Fermentation FermDiesel

Sugars/ Starch

Feed Cost

Dimethylfuran – via catalysis ETG Catalysis
Catalytic Conversion

Biogasoline Dimethylfuran Gasoline, Diesel, Hydrocarbons

Gasoline/Diesel – Catalysis and Aqueous Reforming Aqueous phase Reforming Biodiesel - Algae
Cell Mass Hydrocracking


+ Sunlight – CO2

BioDiesel (FAME or FAEE) Fermentation C6, C5 Sugars Ethanol

Ethanol – Cellulose Hydrolysis Fermentation
Acid or Enzyme Fermdiesel, Hydrolysis Saccharification Butanol

Cellulose/ Hemicellulose Mixalco Process Microbial cultures Gasification



Methane – Microbial Syngas Cultures Fermentation Methane Ethanol – Syngas Feedstock Fermentation Syngas Supply Biodiesel, Ethanol – Fischer-Tropspch Volume FT and Catalysis catalysis Higher Alcohols – Increasing Mixalco Process Technological Difficulty

Mixed Higher Alcohol


BTL Diesel


… or news from the frontlines

Story Time




Range is working to transform this into ethanol!

Trash… Or Treasure?


Southeastern U.S. Potential
• ≈ 13 Billion gpy Product Potential
– From unmerchantable timber & timber harvesting residues only




Potential of Synthetic Biology
Synthetic Biology = Fermentation Diesel Anti-Malarial Synthetic Biology Fermentation Diesel X

Gene 1 3 Gene 1 4 Gene 2 Gene

Source of genes

Custom-Built Microbe

Artimisinin Recombinant Small Molecule Bio-Synthetic Pathway 195

Designer Hydrocarbons
Hydrocarbon Biosynthesis: Nature’s Energy Storage
Renewable Feedstock

Metabolic modeling + Synthetic biology




>90% Energetic Yield From Feedstock

LS9 Designer Biofuels & Chemicals


Butanol, the old fashioned way…


Metabolic Engineering
Biomass Hydrolysate

CO2 ethanol lactate acetone formate hydrogen

A recombinant strains containing a butanol pathway produces butanol in addition to other products.

. . .


Metabolic Engineering
Biomass Hydrolysate


Classical and genetic techniques are used to improve butanol tolerance.




Cellulosic Biofuels Status
• DOE: Six “meritorious” biorefinery grants • Multiple demo plants under constructionon ll • •

ga 5b ts 3 under test Various technologies,e s feedstocks nt oal! ide g es of geographies – not just mid-west A diversity Pr

• Question is “not if” but “at what price”

em ! st ce sy an …and this is just the o st c beginning e di on ng ti o va e l no re in f “ u he t yo t …imagine the map in 2017! in gh ve rou lie b Be

t ”

at h

A Potential Trajectory …
Market Phenomenon New Chemistry liquid fuel +PHEV

Butanol blends + PHEV

Corn ethanol Blend

…driven by the “innovation” ecosystem of scientists, technologists, entrepreneurs
E85 /electric hybrids ??? E85+ FFV penetration New Liquid Fuels Energy Crop Agronomy Butanol E85 Engine Optimization Scaling, Waste Sources Energy Crops Cellulosic, Infrastructure

Cost Initial Distribution Experimentation Automotive Efficiency, CAFÉ, Lightweighting, Battery Technology, Cleaner Electricity

Corn/Sugar ethanol E85

E85 plug-in hybrids




Investment Target

Cellulosic ethanol, Full FFV conversion


Biohol Trajectory


Per acre economics of dedicated biomass crops vs. traditional row crops Biomass
Grain yield (bushel) Grain price ($/bushel) Biomass yield (tons) Biomass price ($/ton) Total revenue Variable costs Amortized fixed costs Net return N/A N/A 15 $35 $525 $84 $36 $405

Farmers Are Driven By Economics
162 $3.50 2 $35 $637 $168 $66 $403

Source: Ceres Company Presentation/ Khosla Ventures

Biomass Yields?
• Miscanthus averaged 16.5 dry tonnes per acre per year, where sawgrass averaged 4.6 at 3 Illinois sites, with data taken over 3 years •

• •

• Approximately 75 million acres of crop and pasture land in the US can easily be converted to cultivating energy crop without 205 impacting domestic food production (CERES)

ne li s so re ga ac Sugarcane experts in Brazil are breeding energy cane that will likely result in yields of 25 dry tones S acre per year of U per0m harvestable biomass et t 5 e u m o High yield sorghum can be grown in 35 US States and produce yields as high as 25 dry tones per acre per year ld ab ou on c DOE estimates that collecting existing biomass with small e nd change in agricultural practices could generate 1.3 billion w a in the US and still be able to meet all food, tones of biomass … export feed, and em demands. d

Miscanthus Farming vs. Corn/Soybean Corn/Soybean Rotation Miscanthus Energy Crop Corn Soy 10 Years 1st Year 2nd Year 3rd - 10th 10 Years re oy o 195 1,770 Total Variable Costs 464 321 2,657 521 242 m /s r 420 n 396 2,856 Total Other Costs 630 571 4,029 395 fa or Total Costs 1,094 892 6,686 is 916 c662 591 4,626 s na ! u a Yield (tons ha) 11 4 th th ion n Yield (dry tons ha) 0 17 35 a le tat sc 681 5,783o 0 663 1,330 7,527 i ab r Gross Revenue ($ ha) 1,020 M fit Net Profit ($ ha) -74 739 2,900 o -210 -903 -916 1 r p

Notes: 1 - Discounted at 3% annually Corn and soybean costs and average yields for Central Illinois after (Hoeft et all, 2000), 206 and prices based of CBOT 2002 futures

Biomass, Geopolitics & Poverty

Biomass & Poverty Belt


Monoculture or Polyculture

(Grass Cocktail)

A study from the University of Minnesota suggests…

ld ture ie ul y h lyc marginal land that “mixtures of native prairie plants grown on ig o h p are a good source of biomass for biofuel” and that “ethanol nd act made from mixed prarier plans can provide more useable a p le im ists energy per acre than either corn ethanol or soybeane or ab w biodiesel” ex in lo ,m s a r nd st o as la su s f iom Mixed prairie plans also have the benefit of being perennial … bee ss ity b (don’t have gi replanted), as welle preventing soil erosion , l as r air. e carbon dioxidelfrom the s Additionally, they and removing at pesticides, herbicides,e i s iv irrigation, while adding don’t tr so od s require fertility to degraded lands. bi er ich r … ethanol is viable, coal/natural gas plants … until cellulosic
could burn the prairie biomass – this would actually reduce net carbon dioxide emissions through reduce fossil fuel use 208 and by storing carbon in prairie soils

Ethanol Subsidies
• “With the rise in today’s price of corn, s iefarm exceeding the government’s “targetdng siniprices”, these agricultural subsidies willbecli su ddwindle to the range of $2 billion, andet”asrecur unless and will on: re “nngfor crops disappears” until the energy demand ies o

nge wrubsidi ni r th s li fo ec price for corn rising is effectively • The marketing d t th …righ lowering subsidies – one set of subsidies offsets another


Simple Action Items
Require 70% new cars to be Flex Fuel Vehicles • … require yellow gas caps on all FFV’s & provide incentives to automakers      • • • • Require E85 distribution for all high volume gas stations Make VEETC credit variable with oil price ($0.25-0.75) Make the cellulosic biofuels RFS = “all production till 2015” Increase RFS to 35 billion gallons by 2022

     …. for stations that pump more than 2 million gallons per year of fuels;

     …. with cellulosic multiplier and minimum carbon reduction standards

     …. With price caps on maximum cellulosic premium over the price of gasoline

...ensuring investors long term demand and oil price stability


el lf! fu ha ut in c an ion c e pt W um s on c


The Possible at “NORMAL” Margins!
June 2006, Aberdeen , South Dakota

Imagine $1.99 ethanol at every Walmart in America


Generic Approach
take a big problem (challenge) … … … … add the best minds the power of ideas the fuel of entrepreneurial energy and a dash of greed


…the chindia test

only scalable if competitive unsubsidized


…the scaling model

brute force or exponential, distributed…


…investments or climate solutions?
wind photovoltaics biodesel hybrids

…”relevant scale” solutions for
…oil …coal …materials …efficiency

…pragmentalists vs idealists


Which Risk for oil & coal?

the lesser evil


Denial to Despair? or… Solutions (they exist)

…hybrids good …corn ethanol bad …biodiesel good …nuclear bad


Subsidies: Oil or Ethanol?
• Ethanol receives: • a $0.54 per gallon producers credit, as well as of additional state-specific subsidies se • Oil receives: rfcost depletion” • Excess of Percentagewa over d ol! worth $82 billion dollar subsidy es an and development cost • Expensing of di exploration - $42 billion i th s subsidy. e ub • Add on alternative fuel production credit (read l s tar sands etc). oilOi shales, • Oil and gas exception from passive loss limitation • Credit for enhanced oil recovery costs • Expensing of tertiary injectants 222 • $7 billion in Katrina relief!

ho t

Hybrids or Ethanol?
Hybrid Corn Ethanol

Oil reduction 20-30%

nd 20-30% Carbon 20-30% ra! reduction pe on ea ti Cost $5000 h u $50 r c sol fa le ScalabilityaBattery Cellulosic b breakthrough Breakthrough l is cala no to High Impact s Low ha ore Et m automakers

Hybrid or FFV?
Hybrid Cost $3000 FFV

(11000 m/yr; 14mpg)

-e re o ! m n a tio er lu ff so o Gasoline 157 477 ’s FV Savings F

ec f f$30

ve ti


Biodiesel vs. Ethanol vs. Cellulosic Diesel
“Classic” Biodiesel Carbon reduction - 80% 2006 Carbon reduction – 80% 2010 Scalability (2030 600-900 Gallons/acre) Sustainability (2030) Poor Product Quality Poor Ethanol 20-30% Cellulosic Diesel Not Available 80% 2500 (cellulosic) High Good Excellent (@ $45 oil price)

Unsubsidized 10 yr High market (@ $45 oil competitiveness price) 2010 Production Cost High Technology Poor

ra T

ec j

ry to

s! r 2500 e (cellulosic) tt Ma
High Good Excellent (@ $45 oil price) Med-Low Improving


Med-Low Nascent


PR The Mexican Tortilla Story …. try Nearly all Mexican tortillas are made of home-grown white maize, rather than the yellow variety that is usof subsidised ethanol across the border has more common in the United States. The growing popularity nd to rise by over 50% since October. So industrial i prompted the price of yellow corn, quoted in Chicago, lanimal feed and syrup) started buying white maize instead. users of imported yellow corn in Mexico (for oitariff on imported g is not due to disappear under the The government was slow to react. The or until next year. But the government could have blunted the n maize for North American Free Trade Agreement e or moving quickly topi ng price rise by waiving the tariff expand says de la Calle, u sMr Calderón did raise eloquotas i the tariff-free quota,agreedLuisvoluntary a former trade official. 18th, and a is tortilla makers. v import shon January already been done, and the price-cap with the biggest ? l not cover the small-scale tortilla makers patronisedhadmany poorer Mexicans. A e But the political damage by a gn price cap does d pu because? was indiscriminate. Officials point s it re ai previous government withdrew e subsidy on tortillas e the v een sid out that thep higher price is good news for the rural poor, who grow maize. Mexico's Federal … m Commissiona investigating the import and distribution of maize. But Eduardo Pérez h is b ub Competition Motta, the commission's president, sayss thinks that import quotas rather than monopolies are to cafor the price spike. eother words,he to Mr López Obrador's claims, Mexicans would hy i In s blame w tr maize.rm contrary benefit from free n in … u trade fa co er ow l
Economist, 2007

Is There a Food vs. Fuel Issue?



BioPlastics – the next cycle?


Applications of BioPlastics


Competitive Landscape


ource: Sustainable chemicals Report – Chevreux

Plenty of Markets!


ource: Sustainable chemicals Report – Chevreux

Plenty of Upside!


ource: Sustainable chemicals Report – Chevreux

...replaced all 300 Billion lbs of plastics ? …how much land would it take?


Oil Refinery Concept


Bio-Refinery Concept


Twelve Platform Chemicals

Succinic Acid



Aspartic Acid

Glucanic Acid

Glutamic Acid

Itaconic Acid

Levulinic Acid





Hieroglyphic Writings…
A version of graphic representation of “Top 12 DOE platform chemicals from glucose”

A specimen of an Egyptian language writing

ca. 2000 A.D.

ca. 530 B.C.

letters  syllables  words  poems

Enabling Renewable Value Chains for Sustainable Chemical Industry Renewable Feedstocks
(crops & forestry)

Industrial Bioproducts
Biodiesel Compound set A Compound set B

New Industrial Bioproducts
Bioplastics Specialty polymers

Triglycerides (vegetable oils)
Soybean, Linseed, Corn, Canola

Technologies: Synergy of Renewable Feedstocks

Polymer additives Performance Surfactants Adhesives Coalescent Solvents Other

Starch Sucrose Cellulose/Wood

Fuel ethanol Compound C Other Products


…bottled water renewable???
















3-hydroxypropionic acid







malonic acid

acrylic acid


3-HP Derivatives


Succinic Acid as a Platform
Polyurethanes Polycarbonate/PBT Blends Nylon Polycarbonates PBT Aliphatic Polyesters 1,4-Butanediol THF TPE’s Adipic Acid


N-Methyl Pyrolidone Solvents Crop Growth Promoters Salt Replacements Sources: MBI, Zeikus, 1999; Sado,, 1980; Dake, 1987


Succinic Acid

Succinic Acid Derivatives


Lactic Acid As a Platform
Polyurethanes Polycarbonates Epoxides TPE’s Polyacrylic Acid Resins Acrylic Acid Propylene Glycol Lactate Esters Solvents Chiral Synthons Propylene Oxide

Polyesters PLA


Lactic Acid

Food  Additives

High Performance Materials

Amino Acids Pharmaceutical Precursors

PLA Derivatives



Levulinic Acid Derivatives


DuPont Sorona polymer; part of polymer is 1,3-propanediol from ferment

DuPont Sorona dn_photo_swim229x275.jpg

DuPont Sorona s/daily/images/dn_photo_sorona2 70x270.jpg

DuPont Sonona pparel.jpg


A Change of Paradigm
Catalyst Heavy Metals

● Enzymes ● Organisms ● Selective catalysts Water Renewable Low to no negative impacts Lower inherent risk

Solvent System Raw Material Source Harmful Impacts Production Risk

Organic Petroleum ● Environment ● People Higher inherent risk ● Pressure ● Temperature Petroleum based Rigid discipline silos Who cares?

Energy _ Sustainability

Renewable energy Cross discipline team A new attribute

Societal Cost of Hydrocarbons
US Related Data:
• Air, water, and soil pollution from electric generation cost $14.8-90.3 billion – each year! 1 gallon of spilled oil can contaminate 1 million gallons of water! Oil pollution from automobiles causes $4.6 billion in damages to crops, rivers, forests, lakes etc
Source: Coghill Capital Management

Societal Cost of Hydrocarbons (Continued)
Military Costs:
• Strategic Military Bases ($49bn) • Oil and Gas supply route security ($20bn) • Strategic Petroleum Reserves ($30bn) • Iraq ($1 trillion! – or $275mn per day!)
Source: Coghill Capital Management

Societal Cost of Hydrocarbons (Continued)
Health Costs:
• 760,000 Chinese die each year due to air and water pollution ($99bn)! Lung disease and asthma caused by pollution ($16.1bn)! Lead, Mercury, and Arsenic poisoning from coal plants is linked to mental retardation, learning disabilities, premature mortality, and to some autism cases ($88-640bn)

Source: Coghill Capital Management

What Are Fossil Fuels’ Externalities?
Fossil Fuel Costs (Billions $USD) Low Military Base and Supply Route Security Environmental Monitoring and Clean Up Healthcare Treatment and Mortality from Pollution $49.00 Medium $75.00 High $100.00







Total Fossil Fuel Costs




Source: Coghill Capital Management

What Are Fossil Fuels’ Externalities? (continued)
The Effect on Consumers 2006 Ave. Cost Coal (Short ton) Crude Oil (Barrel) Natural Gas (mmcf) $20.49 $60 $6.80 Mid-Societal Cost $93.83 $26.68 $2.74 Total Cost/ Unit $114.32 $86.68 $9.54 Consumer Increase $0.0454 c/kWh $1.54 per gallon $0.0235 c/kWh

Mid-Range societal cost increases (generation costs only – no distribution or retail included) • • • Coal fired electric generation goes from $0.026/kWh to $0.0714/kWh Natural gas electric generation goes from $0.0615/kWh to $0.0851kWh Regular gallon of unleaded gasoline goes from $3.46 to $5.01 per gallon


Source: Coghill Capital Management