RECS 2012 Birmingham, Alabama

Clean Coal Technology Development Southern Company Generation, Research & Technology Management Dr. Richard A. Esposito, P.G.

Southern Company (NYSE:SO)

Regional energy company - Alabama, Georgia, Gulf, Mississippi, and Southern Nuclear - Southern Power is the largest wholesale power producer in the Southeast - Southern Company Services is an in-house engineering design, construction, and research organization - More than 43,000 MW of electric generating capacity (79 plants) Core service area - 120,000 square miles in four southeastern states; 4.4 million customers and 26,000 employees One of the largest producers of electricity in the U.S. and one of the largest users of coal

Coal 52 %

Sources of Generation, 2011 Southern Company

Gas 30 %

Nuclear 16 % Hydro 2%

From 2011 Southern Company Form 10-K.

Southern s Fleet in Transition Sothern's Fleet in Transition

Coal 52 %

Gas 30 %

Nuclear 16 %

Drivers & R&D Objectives

CCS Technology Drivers
Compliance with carbon legislation or GHG environmental regulation 200 years of domestic coal resources Depreciated fossil-fuel generation assets in addition to newly installed environmental controls Challenging regional renewable portfolio World class sequestration geology with strong demand for CO2-EOR

CCS Research Objectives

Demonstrate commercially viable option that supports investment decision by 2020
Support roll-out of innovative new technology Broaden list of candidate sites/geologies/use options for CO2 Outreach & education with stakeholders

Research Culture/Beliefs
Maintain a corporate focus on R&D with strategic initiates in mind Learn by doing internally but collaborate externally to network and leverage resources New technologies will address future environmental challenges Maintain a centralized R&D organization Adopt intellectual property positions that do not impede technology development and deployment In-house expertise allows flexibility in future commercial business models

Technology Development
Demonstration: a showing of the merits of a Performance & Cost Performance & Cost product or Reduction to a prospective consumer service Reduction
Bench-top Scale 1-10 MWe Scale

Research

Development

Demonstration
Engineering & Operation 10-100 MWe Scale

Commercialization
Reliability 100+ MWe Scale

Full-time research at small unit or slip-stream Research: studious inquiry Gather results for commercial projects or examination Utility host and vendors are main funders DOE & EPRI First step in process funding necessary Many ideas, many failures Utilities usually not funding or Commercial: suitable, adequate, or prepared for involved [normal] commerce Typically university and Development: Small full-scale plant to expand by a process of national lab work growth Only initial, proof-of-performance research Host utility funded lab to practical testing Move from DOE &EPRI funding possible from smaller scale Only successful ideas Utilities get involved Host utility + DOE & EPRI funding normal
2008 2010 $$$ 2012 2014 $$$$ 2016 2018 $$$$$ 2020 $,$$$$,$$$ 2030

Technology Maturity

Learn by doing!
Efforts that are key to our long-term clean coal program
Plant Ratcliffe IGCC Carbon Capture Utilization Storage
Transportation Carbon Capture

Carbon Capture Center

Plant Barry CCS Demo

Geologic Storage

Site Characterization

Applied Science and Laboratory Testing

National Carbon Capture Center

Unique flexible testing facility where new processes can be tested on both coal derived syngas and flue gas at various scales. A technology development facilitator by providing facilities for scale-up from bench-top to engineering-scale. Include a wide variety of participants and partners. Develop best-in-class technology. Deliver innovation via a collaborative project portfolio that provides an accelerated pathway to cost-effective CO2 capture technology.

Geology/Site Characterization

Alabama Power William Crawford Gorgas Electric Generating Plant (Parrish, AL) - University of Alabama - Geological Survey of Alabama - Schlumberger Carbon Services

Mississippi Power Victor J. Daniel Electric Generating Plant (Escatawpa, MS) - Southern States Energy Board/SECARB - Electric Power Research Institute - Advanced Resources International

Drill Core Collection

Plant Ratcliffe - R&D to Reality

Industry Leading R&D & Construction Expertise 15 years of development/demonstration in TRIG Technology Certified by the MPSC on June 3, 2010 582MW IGCC COD May 2014 ZLD facility 65% CO2 Capture 3.4 MMt CO2/yr $2.4 Billion Capital Investment $700M in federal incentives CWIP rates will begin in 2012 Advanced due diligence discussion for federal loan guarantees TRIG Technology being deployed in China

Plant Ratcliffe Plant Site

TRIG Gasification Process

Transport Integrated Gasification Product of more than 15 years research Developed at the Power Systems Development Facility (PSDF) in Wilsonville, Alabama; now the National Carbon Capture Center Sponsored by the DOE, hosted and operated by Southern Company Services

Why Mississippi Lignite?

1) Domestic Mississippi resource 2) Estimated 4 billion mineable tons 3) 60 million tons needed for the 40-year life of the plant 4) Low commercial value of 5K btu/lb at 45% moisture 5) TRIG technology designed for coals like lignite

Plant Ratclie

IGCC By-Products
Integrated Gasification Combined Cycle

Gasifier

Combined Cycle

Sulfuric Acid (H2SO4) ~135,000 tons/year

Ammonia (NH3) ~22,000 tons/year

CO2 @ 65% capture ~3,400,000 tons/year

Plant Barry CCS Demo

Fully integrated CO2 capture, transport and storage project Construct and operate a 25 MW equivalent CO2 capture unit at Alabama Power Plant Barry Construct and integrate/operate an 11 mile pipeline that will transport captured CO2 to Citronelle Dome Site characterization, permit, inject, and monitor/model 300,000 metric tons of CO2 into a saline formation Outreach & education, stakeholder acceptance, contracting, liability, pore space, etc.

Capture Plant Update

2010 2012

Capture plant & compressor started operations on June 4, 2011 with > 50,000 metric tons CO2 captured to date.

CO2 Pipeline Overview

Approx. 11 mi to the SE operators unit in Citronelle Field Right-of-Way Utility corridor for Citronelle SE Unit 80%; 9 land owners Pipe specifications Pipeline 4-in pipe diameter Route X70 carbon steel DOT 29 CFR 195 liquid pipeline; buried 3 feet with surface vegetation maintenance 19 directional drills Purity is 99% dry CO2 at 115F, 1,500 psig Right-of-way habitat (pine forest in the Mobile River watershed; some wetlands, gopher tortoises)
Citronelle Unit Detail

Plant Barry

19 directional drills with some up to 3,000 feet long and 50 feet deep

Right-of-Way is primarily a utility corridor for 80%; only 9 land owners

Storage Scope & Objectives

Scope:
Demonstrate safe, secure CO2 injection and storage in regionally significant saline reservoirs in the southeast U.S. region

Objectives:
Identify and mitigate potential leakage risk Evaluate local storage capacity, injectivity and trapping mechanisms for the Paluxy Formation (saline reservoir) Test the adaptation of commercially available oil field tools and techniques for monitoring CO2 storage Permit injection, stakeholder acceptance through outreach & education
Demonstrating geologic storage capacity, injection, and monitoring

Storage Scope & Objectives

Scope:
Demonstrate safe, secure CO2 injection and storage in regionally significant saline reservoirs in the southeast U.S. region

Objectives:
Identify and mitigate potential leakage risk Evaluate local storage capacity, injectivity and trapping mechanisms for the Paluxy Formation (saline reservoir) Test the adaptation of commercially available oil field tools and techniques for monitoring CO2 storage Permit injection, stakeholder acceptance through outreach & education
Demonstrating geologic storage capacity, injection, and monitoring

Stacked Storage Reservoirs And Multiple Seals

Tertiary Injection Zone (Eutaw Fm.)

Secondary Injection Zone (Tuscaloosa Fm.)

Proposed Injection Zone (Paluxy Fm.)

SECARB Tour Overview

Citronelle SE Unit Injection Well D9-8

Pipeline Route
Citronelle Unit Detail

Plant Barry

Custody Transfer Station

Basic Science and Lab Experimentation

Montana State Biofilm Lab
- Biological control of permeability - Sealing leaking boreholes - Sealing fractures and cap rocks

UAB Cap Rock Integrity Lab

- Long-term storage integrity - Regulation of injection pressure - Reassure stakeholders that geologic sequestration is safe and secure

Research Experience in Carbon Sequestration

The RECS program is heading to Southern Company in 2012 Thirty students selected to participate in a two week workshop where they learned about CCS from experts in industry, the research community, NGOs and the government; along with participating in group exercises, workshops, and field trips.

Other Supported Projects

Citronelle Oil Field CO2-EOR/Storage Capacity Pilot Injection (UAB/Denbury/Geologic Survey of Alabama), 2008-2013. Plant Daniel CO2 Impacts on Shallow Groundwater Study (EPRI/LBNL), 2010-2012. Valuation of Human Health and Ecological Risks and Damage Assessment Arising From CCS (Industrial Economics Inc.) (Phase I & Phase II), 2010-2012. Development of Standards for Geologic Storage of CO2 (CSA), 2011-2012. CCS Technology and Pipeline Infrastructure Study (LANL), 2012. Florida Panhandle Pipeline Infrastructure Model (University of North Florida), 2011. Carbon Sequestration Simulation Center (UAB), 2012-2013. Carbon Sequestration Cap Rock Lab (UAB), 2010 - 2014 Transformation Reactions of Clay Mineralogy in CO2 Storage Formations (Georgia State University), graduate student support, 2012. CO2-EOR Initiative, Center for Climate and Energy Solutions (C2ES), 2011-2012 MIT Carbon Sequestration Initiative, 2009-2012.

Industry Perspectives
An educated workforce will be integral to future CCS operations and ongoing research activities. Future widespread deployment of CCS technology is still dependent on issues unresolved on the legal and policy side of carbon mitigation. However, through the research and development with our partners, Southern Company remains committed as a leader in technical advancement and readiness for the future of the electric utility industry.