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Missouri and 21st Century Coal

Missouri and 21st Century Coal. Electric Generation Panel Discussion – Steering Committee for Missouri’s Comprehensive State Energy Plan, Public Meeting #7 Truman State University – Kirksville, Missouri. October 30, 2014. Cartan Sumner Vice President Peabody Energy.

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Missouri and 21st Century Coal

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  1. Missouri and 21st Century Coal Electric Generation Panel Discussion – Steering Committee for Missouri’s Comprehensive State Energy Plan, Public Meeting #7 Truman State University – Kirksville, Missouri October 30, 2014 Cartan Sumner Vice PresidentPeabody Energy

  2. The Essential Role of21st Century Coal • The world uses substantial energy and those needs are rapidly rising • Even today, far too many people in the world lack access to low-cost electricity • Coal is uniquely capable of providing that energy, with a scale and cost profile that is unmatched in the world • Peabody believes that mining must be safe and productive, with high resource recovery and advanced land restoration • We also believe in continuous emission improvement leading to the ultimate goal of near-zero emissions • We are proud of our global leadership in sustainable mining, energy access and advanced coal technology Former Seneca Mine in Colorado Environmental Specialist at Peabody’s Wyoming Operations

  3. Peabody Energy: World’s Largest Private Sector Coal Company • 252 million tons sold in 2013 • Customers on six continents • Global headquarters in Missouri • 27 mines across U.S. and Australia • 20 surface mining operations • Seven underground mines • Listed on New York Stock Exchange under symbol “BTU” • Globally Recognized for Safety, Environmental & Corporate Leadership • Ranked #365 on Fortune 500 list of top U.S. corporations North Antelope Rochelle Mine

  4. Our Company’s Approach to Mineral Resource Production Safety, Productivity, Resource Recovery and Land Restoration • Large scale, open-cut mining • Safe, efficient and sustainable • High-paying, highly-skilled American jobs • Advanced and high-tech engineering • World class conservation practices • Commitment to local communities Peabody’s North Antelope Rochelle Mine in Wyoming: World’s Largest and Most Productive Coal Mining Operation

  5. Reclaimed Mining Lands Sustain Farmland, Wildlife and Communities • Extensive planning required in advance of mining activity • Contemporaneous land restoration ensures smallest active area for mining operations • Peabody has pioneered agricultural practices to return mined land to highly productive farmland in the U.S. and Australia • Created 1,300+ acres of wildlife habitat, established 300 acres of pristine ponds and lakes in 2013 Before After Peabody earned multiple honors for completing Mongolia’s first coal mine restoration project at the former Ereen Mine. The project team restored area to lush pasture, more than four times as productive as adjacent native grazing lands.

  6. Advanced Coal Technologies: A U.S. Environmental Success Story Emissions Rate Declines 90% Since 1970 As Coal Use Rises 170% Coal Used forPower Generation Today + 170% + 116% GDP per Capita Regulated Emissions/MWh from Coal Pittsburgh 1950s - 90% 2013 1970 1980 2000 1990 Source: U.S. Energy Information Administration (EIA) 2014 Annual Energy Outlook, 2013; EIA Annual Energy Review, 2012; U.S. Department of Agriculture, 2013; U.S. National Energy Technology Laboratory, 2012; U.S. Environmental Protection Agency, “Clean Air Markets,” 2013.

  7. Clean Coal Technologies In Broad Use Around the World Today’s Technologies Deliver Major Environmental Improvement Supercritical Power with Advanced Emission Controls Wet Electrostatic Precipitator Sulfur Dioxide Scrubber Dry Electrostatic Precipitator Selective Catalytic Reduction Low-NOX Boiler Technology Clean coal and clean coal technologies describe today’s high-efficiency supercritical technology as well as the collection of technologies that reduce key power plant emissions of sulfur dioxide, nitrogen oxides, particulates and mercury.

  8. Advanced Supercritical Generation:Sound, Technology-Based Approach U.S. Modernizing its Coal-Fueled Generation Fleet by Adding Over 11,000 MW of New Supercritical Technology Capacity 21st Century Coal Projects • Operating • Council Bluffs 4 790 MW (2007) • Westin 4 530 MW (2008) • Oak Creek 1,230 MW (2009) • Oak Grove 1,600 MW (2009) Comanche 3 750 MW (2010) • Iatan 2 850 MW (2010) • Trimble County 2 750 MW (2011) • Sandy Creek 900 MW (2011) • Longview 695 MW (2011) • Prairie State 1,600 MW (2012) • Cliffside 825 MW (2012) • Turk 600 MW (2012) • Total 11,120 MW • Permitted • Holcomb East 895 MW • Washington 850 MW • Trailblazer 600 MW • Coleto Creek 2 650 MW • Total 2,995 MW • Other Significant Technology Initiatives • Edwardsport (IGCC) • FutureGen 2.0 • Kemper (IGCC) Westin Oak Creek Council Bluffs Longview FutureGen 2.0 Iatan Edwardsport Comanche Trimble County Holcomb East Prairie State Cliffside Turk Coleto Creek Kemper Washington Trailblazer Oak Grove Sandy Creek High Efficiency Advanced Coal Generation Significantly Reduces CO2 Emissions and Provides a Proven, Technology-Based Path for Achieving Energy Policy Objectives

  9. 21st Century Coal in Missouri:KCP&L’s Iatan 2 Project Missouri Has Made Strategic Investments in Coal-Fueled Electricity Providing Economic and Environmental Benefits • To meet future energy needs in the Kansas City region, KCP&L developed the 850 MW state-of-the-art Iatan 2 unit in 2010 in Weston, Missouri • Iatan 2 deployed advanced supercritical (high efficiency) technology and was one the largest construction projects in state history, creating nearly 4,000 jobs and $500 million in salaries and wages • The Iatan facility is Missouri’s largest coal-fueled power station and was the first new baseload generation project in Missouri in several decades Iatan 2 Weston, MO

  10. Missouri’s Electricity Generation Mix Seven Facilities Provided Over 70% of Missouri’s Electricity in 2013 • John Novak, Director of Environmental Issues, National Rural Electric Cooperative Association: “Coal, and its stable price, is a long-term proven hedge against natural gas volatility and is critical if we are to continue to provide affordable electricity for our members.” Source: EIA, “Electric Power Monthly February 2014”

  11. America’s Coal Resources FuelLow-Cost Electricity for the Nation “Green States” Pay Considerably Lower Rates for Electricity Coal-Dependent States 9.1¢ / kWh 48% Coal Northeast 14.8¢ / kWh 4% Coal Hydro California 14.6¢ / kWh <1% Coal U.S. EIA, 2013 data (March 2014). Average retail electricity prices per kWh. Weighted average of CA and NE states equals 14.7 cents per kWh.

  12. Low-Cost Electricity:Competitive Advantage for Missouri Missouri’s Annual Electric Bill (2013) In Billions “Missouri’s rated one of the Top Ten best states to do business, because of things like our low tax rates, low workers comp rates, low energy costs and strong workforce.” -- Governor Jay Nixon Source: EIA, “Electric Power Monthly, February 2014.” (Data for 2013)

  13. Low-Cost Electricity and…. Missouri Agriculture Missouri Rural Communities • Rural residents spend a greater amount of their income on energy than those in urban communities • Energy policies that result in the closure of power generation facilities is the equivalent of levying a tax on rural towns • “America’s rural communities depend on coal-fired generation for affordable electric power and would be disproportionately penalized….” • National Rural Electric Cooperative Association (2013) • The state’s 108,000 farms generate more than $12 billion annually; energy costs represent approximately 13% of farm production costs • USDA studies confirm that higher energy costs result in lower agricultural output and reduced farm income • “(Our) single greatest monthly cost is the wholesale power we purchase and distribute to you, our members….” – Farmers’ Electric Cooperative Chillicothe, Missouri (2013)

  14. Low-Cost Electricity and…. Missouri Manufacturers Missouri Small Businesses • Manufacturing employs over 250,000 Missourians and makes up nearly 10% of the state’s employment • Missouri’s numerous advanced manufacturing companies benefit from competitive advantage as a direct result of the state’s low electricity costs • Industrial firms in Missouri pay 10% less per kWh for their electricity than the national average Missouri Working Families • Missouri’s 2.4 million households spend an average of $1,300 annually on electricity and 13% less per kWh than the national average

  15. Thank You! Missouri and 21st Century Coal

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