Fuel Issues and StrategiesUsing Emerging Fuels to Create Multiple Benefits

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Fuel Issues and StrategiesUsing Emerging Fuels
to Create Multiple Benefits

• David W. South
• Presented at
• Arkansas Environmental Federation
• CHP/DG and Emerging Fuels Meeting
• June 26, 2007

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Overview

• Many opportunity, emerging or recoverable
  energy fuels available at zero/negative cost
• Clean or zero-emission fuels have value in
  compliance markets can be monetized
• Clean fuels/technologies have multiple benefits
• Lack of regulatory requirements (in Arkansas)
  does not mean financial/environmental credits
  cannot be sold

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Environmental Paradigm Shift Now Values
Clean/RE Energy Technologies
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Environmental Paradigm Shift Now Values
Clean/RE Energy Technologies
State Demand (kWh/year)
State Emissions Cap (tons/year)
Technological control limit or economics could
curtail ability of power generator to operate
under cap.
Unit Emission Rate (lbs/MMBtu)
Post-1990 Clean Air Act Amendments Compliance
Paradigm
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Environmental Paradigm Shift Now Values
Clean/RE Energy Technologies
State Demand (kWh/year)
State Emissions Cap (tons/year)
Addition of low- and non-emitting generation
reduces rate of decline in fossil fuel emission
factors retains (extends) fossil fuel generation
in portfolio while complying with emissions cap.
Unit Emission Rate (lbs/MMBtu)
Post-1990 Clean Air Act Amendments Compliance
Paradigm
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What Makes Biomass Projects Work?
Coal Natural Gas
Emissions
Fuel
Power-Gen Technology
Electricity to Grid (?)
Off-Taker

• Electricity
• Steam
• Syngas
• H/C Water

Feedstock
Biomass
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Environmental AttributesProject Specific
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Process for Monetizing Emissions Credits
(Avoided, Reduced)
Credit /ton (tonne) SO2 430-440 NOx 1000-1025 CO2
-R 7-10 CO2-V 3-4
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Debt/Equity
RE Funds, Hedge Funds Investment Banks
Project Pro Forma
PTCs
RECs
ERCs/ GHGs
Nutrient Credits
ITC/ Depreciation

• Renewable Portfolio Standards (RPS)
• Renewable Fuel Standards (RFS)
• Clean Air Act (CAIR/CAMR), GHG Compliance

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(No Transcript)
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Clean Energy Technologies ? Multiple Benefits

• Reduced/Avoided Emissions ? CAIR, CAMR, NAAQS. No
  GHG liability.
• Renewable Portfolio Standard. REC sale in
  Compliance or Voluntary market.
• Facilitate Economic Growth ? Local, Business.
• Reduce/Eliminate Waste Disposal, Truck Hauling.
  Extend Landfill Life Avoid Cost.
• Serve Electricity Load (Cycle of Technology)
  Match Incremental Load Growth.
• Reduce TD Load/Cost (Distributed Generation).

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Optimized Configuration Maximizes Credits
Power Plant Fuel
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Roadmap to Clean Energy Technology Deployment

• Clean Energy Technologies (CET) do not
• Compromise emission limits (caps)
• Incur future costs to comply with stricter
  requirements
• Economic/Portfolio Value of CETs
• Can facilitate continued use of Fossil Fuel
  technologies avoid stranded asset problem with
  stricter regulations
• Smaller footprint and modularity better match
  load growth, local power requirements, local
  resource availability and CAPEX budgets
• Distributed Generation attribute benefits
  TD
• Out-year avoided costs will grow
  over time

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Roadmap to Clean Energy Technology Deployment

• CET Benefits have Financial Value, can be
  Monetized
• Clean Air emission allowances, emission
  reduction credits (ERCs)stationary, mobile
  sources
• Organic Waste Resources tipping fee, nutrient
  credits, RECs 
• Avoid/Lower GHG emissions preempts stranded
  investment if/when a GHG regulation is
  implemented.

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• David W. South
• President
• Technology Market Solutions, LLC
• 7904 Hollington Place
• Fairfax Station, VA 22039
• OP 703.690.2736
• CP 703.795.2274
• EM david_at_t-msolutions.com