Transcript Document

Profitably Reducing
Carbon Emissions in Maine
Presentation to Governor
Baldacci’s
Energy Efficiency Summit
Thomas R. Casten
Chairman, Recycled Energy Development, LLC
April 3, 2008
RED | the new green
www.recycled-energy.com
Thoughts on Global Warming
 Global Warming threatens life as we know it.
 Overwhelming evidence that human actions are
causing climate change.
 Conventional wisdom assumes energy system is
optimal. We know this is not true
 Electricity is protected from competition, but pundits
assume free market principles prevail. We know this
is not true
 The world must improve electric generation
efficiency to mitigate climate change
RED | the new green
www.recycled-energy.com
Presentation Summary: Profitably
Mitigating Climate Change
 Describe economic and environmental
inefficiency of electric generation
 Show how to reduce US carbon emissions by
20% and save $70 billion/year
 Describe Recycled Energy Development’s
Approach
 Propose Maine Actions to promote profitable
greenhouse gas reductions
RED | the new green
www.recycled-energy.com
Homer Simpson’s Power
Plant (Springfield, ?)
RED | the new green
www.recycled-energy.com
Electric Generation Plant
(Craig, CO)
Two-thirds of the fuel’s energy is vented to atmosphere.
RED | the new green
www.recycled-energy.com
Inefficient US Electric Generation
Related Headlines:
100%
“Recent Warming of Arctic may Affect World
Climate”
90%
-NASA
80%
“US Manufacturing Jobs Fading Away Fast”
Efficiency
70%
60%
50%
Wasted Energy
Excess Costs
-USA Today
Energy Costs Push Consumer Prices Higher”
Excess Pollution
-Associated Press
40%
30%
20%
U.S. Delivered Electric Efficiency
10%
00
20
90
19
80
19
70
19
60
19
50
19
40
19
30
19
20
19
10
19
19
00
0%
Year
RED | the new green
www.recycled-energy.com
Electric Generation’s Increasing
Contribution to Domestic CO2
Emissions
40%
30%
20%
US Electric Power
Sector’s CO2 Emissions
10%
05
20
00
20
95
19
90
19
85
19
80
19
75
19
70
19
65
19
60
19
19
19
55
0%
50
Percent of Total US CO2 Emissions
50%
Year
RED | the new green
www.recycled-energy.com
US Carbon Dioxide
Emissions, 2005
Breakdown of Emitting Sources:
Other Transport
12%
Cars
19%
Thermal
27%
RED | the new green
Electricity
42%
Heat & Power;
69% of all fossil
fuel CO2 emissions
www.recycled-energy.com
U.S. Electric System
Efficiency Since 1960
Pollution
Waste Heat
Transmission
Line Losses
3 units (9.0%)
67 units
Waste
Energy
Fuel
100
units
=
End User
33 units
Electricity
Power Plant
RED | the new green
www.recycled-energy.com
Combined Heat and Power
Options
Pollution
Fuel
100
units
=
33
units
Waste
Energy
33
units
Thermal
Energy
CHP Plant
33 units
Electricity
Recycle
Waste
Heat
RED | the new green
66
units
Useful
Work
End User
Site
www.recycled-energy.com
Recycling Industrial
Energy Even Better
Saved
Energy Input
Energy
Recycling
Plant
Electricity
Finished Goods
Process
Fuel
Waste
Energy
Electricity
Steam
Hot Water
RED | the new green
End User
Site
www.recycled-energy.com
US Energy Recycling
Potential
 EPA and DOE studies identify 200,000 megawatts CHP &
waste energy recycling potential
 (750,000 MW US peak load)
 Capital investment of $350 billion
 Society could save $70 billion per year
 Energy Recycling can profitably eliminate 20% of U.S.
CO2 emissions (1.4 of the 7.2 gigatons)
RED | the new green
www.recycled-energy.com
U.S. Grid is Less Efficient than
100 Years Ago
CHALLENGE &
OPPORTUNITY
US Electric Industry Fuel-Conversion
Efficiency
• ~$70 billion
potential energy
savings if U.S.
Recovered Energy
returned to 1920s
U.S. Average Electric Only
model
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
RED | the new green
90
19
80
19
70
19
60
19
50
19
40
19
30
19
20
19
10
19
00
19
90
18
18
80
• 1.4 gigaton GHG
reduction/year
www.recycled-energy.com
US Energy Recycling
(CHP) Potential
 EPA and DOE studies identify 200,000 megawatts CHP &
waste energy recycling potential
 Capital investment of $350 billion
 Society could save $70 billion per year
 Profitably eliminate 1.4 gigatons of CO2 emissions
 Many other benefits including:
 Improve manufacturing competitiveness, add jobs
 Reduce need for transmission wires
 Reduce vulnerability to extreme weather and terrorists
 Improve balance of payments
RED | the new green
www.recycled-energy.com
Examples of Local Generation
Projects that Recycle Waste Energy
Projects RED and its predecessor companies have
developed
RED | the new green
www.recycled-energy.com
Efficiencies of Energy Recycling
Projects
100%
90%
Industrial Waste Heat Recovery
(6 Projects)
80%
Steam Pressure Recovery
(190 Projects)
Efficiency
70%
60%
50%
Combined Heat & Power
(56 Projects)
40%
30%
20%
U.S. Delivered Electric
Efficiency
10%
00
20
90
19
80
19
70
19
60
19
50
19
40
19
30
19
20
19
10
19
19
00
0%
Year
RED | the new green
www.recycled-energy.com
95 MW Recycled from Coke
Production (Gary, IN)
RED | the new green
Figure 1 - Energy Recycling at Mittal Steel, East Chicago, Indiana
www.recycled-energy.com
Silicon Production, Alloy WV
Electricity, coal and wood chips
melt quartz in a large furnace
 Plant uses 135 MW
 $60 million investment
 Recycles exhaust into
44 megawatts
 Plant will use power to
expand production by
20%
 We are taking silicon
production back from
China!
RED | the new green
www.recycled-energy.com
Operating Maine Projects by
RED Subsidiary Turbosteam

Livermore Falls, ME
 2002
 2,980 kW
 4,713 tons CO2 saved
annually
 Colby College
Waterville, ME
 1998
 600 kW
 480 tons CO2 saved
annually
 Huhtamaki
Waterville, ME
 2004
 605 kW
 1,043 tons CO2 saved
annually
RED | the new green
www.recycled-energy.com
Potential Clean Energy
Project:
University of Maine at Orono
Profitably reduce greenhouse gas emissions by
recycling waste energy with a backpressure
steam turbine.
• The University currently generates steam at 150 psig
and distributes at 50 psig
• A Turbosteam backpressure steam turbine could
generate 684 kW of electricity for roughly 3 cents
per kWh and avoid 540 tons per year of CO2/year
• RED offers greater savings and emission reductions
could by replacing oil boilers with biomass
• Project delayed by interconnection agreement with
Bangor Hydro
RED | the new green
www.recycled-energy.com
RED’s Goals with Respect to
Climate Change Mitigation
 Deploy $1.5 billion to profitably reduce greenhouse
gas emissions
 Cause a societal ‘tipping point’, with public
demanding removal of all barriers to efficiency
 Change the debate from
 “Who pays to mitigate climate change?” to
 “How can we induce profitable climate change
mitigation?”
RED | the new green
www.recycled-energy.com
Maine Actions to Spur
Profitable Carbon Reduction
 Enact a Clean Energy Standard Offer Program
(CESOP)
 Allow all clean energy to qualify for Maine
renewable portfolio standard rules
 Remove barriers to efficiency
 Treat clean energy projects as ‘Pollution Control’
devices for environmental permitting
RED | the new green
www.recycled-energy.com
Clean Energy Standard Offer
(CESOP)
 Calculate delivered cost of electricity from best new
base load central electric-only plant
 Include generation and T&D capital amortization, fuel
& O&M, line losses, utility profits and expected carbon
costs
 Offer 20 year contracts for CESOP power at
80% of the delivered cost from the best new
base load central station.

Define ‘Clean Energy’ as all power plants with 60%
or better annual fossil efficiency, and include power
from recycling waste energy
 Contract for up to projected 10-year net load growth
 Distribution utility keeps retail load, but buys power
 Distribution utility designs and installs interconnection
to Clean Energy Projects, puts capital in rate base.
RED | the new green
www.recycled-energy.com
CESOP Advantages
 Guarantees improved efficiency - requires 60%
overall efficiency versus 33% grid average
 Guarantees savings – contract prices 80% of
delivered cost of new central generation
 But calculation includes full avoided long run marginal
costs, including transmission, line losses and carbon
 Utility keeps customers and its historic profits from
distribution of electricity
 No standby rates to slow or discourage Clean Energy
 Utility manages interconnection at their expense,
adds to rate base, just like central generation
RED | the new green
www.recycled-energy.com
Effects of CESOP
 Induces power industry to build clean energy plants of
all types
 Government does not pick technology or fuel, just forces
economic and environmental efficiency
 Gives local clean energy projects benefit of low cost
financing, comparable to financing costs of less efficient
central plants
 All renewable energy qualifies along with all projects that
recycle industrial waste energy
 Maine never builds another inefficient electric-only fossil
fueled plant unless CESOP response falls short of needs.
RED | the new green
www.recycled-energy.com
Possible Objections to CESOP
 Some clean energy projects will make
extraordinary profits.
 Public can cry all the way to the bank
 Fossil fueled CHP could push out more expensive
renewable projects
 CESOP keeps economic pressure on all technologies to
reduce costs and at least double fossil efficiency
 The distribution utilities cannot control generation
 This is a soluble technical problem, worth the gain in
efficiency
RED | the new green
www.recycled-energy.com
Other Actions to Speed Clean
Energy Deployment in Maine
 Broaden Maine RPS to all clean energy
 Include all power from renewable energy sources and
all power that meets ‘clean energy’ definition in RPS
and rename ‘Clean Energy Portfolio Standard”
 Strengthen percentages of Clean Energy required, but
include new power under CESOP contract
 Treat clean energy project as a ‘pollution control’
permit application for environmental approvals,
greatly reducing time and cost of developing projects
RED | the new green
www.recycled-energy.com
Thank You
RED | the new green
www.recycled-energy.com