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RED | the new greenwww.recycled-energy.com 1 Capturing Energy Waste Dick Munson Senior Vice President, Recycled Energy Development, LLC Virtual Energy Conference June 11, 2008

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RED | the new greenwww.recycled-energy.com 2 Overview Energy waste is pervasive. Focus on supply-side efficiency. Inefficient generation of heat and power is elephant in the room. See climate change legislation as an economic opportunity. Focus on the profitable reduction of greenhouse-gas emissions.

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RED | the new greenwww.recycled-energy.com 3 Homer Simpsons Power Plant (Springfield, ?)

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RED | the new greenwww.recycled-energy.com 4 Real Electric Generation Plant (Craig, CO) Two-thirds of the fuels energy is vented to atmosphere.

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RED | the new greenwww.recycled-energy.com 5 Inefficient Power System Three units of fuel are used to generate each unit of power 33 percent efficiency. Efficiency has not improved since President Eisenhower. Thomas Edisons power plants achieved 50% efficiency by capturing excess heat to warm nearby buildings. U.S. is an international laggard. Germany, Japan, and other industrialized countries capture heat and power at more than twice the U.S. rate.

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RED | the new greenwww.recycled-energy.com 6 Decline of electric-sector efficiency Implications: US grid less efficient than 100 years ago We pay too much for electricity so we can emit too much CO 2 $70 billion potential savings if US returned to 1920s model

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RED | the new greenwww.recycled-energy.com 7 Electric Generations Increasing Contribution to Domestic CO 2 Emissions US Electric Power Sectors CO 2 Emissions

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RED | the new greenwww.recycled-energy.com 8 US Carbon Dioxide Emissions, 2005 Breakdown of Emitting Sources: Heat & Power; 69% of all fossil fuel CO 2 emissions

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RED | the new greenwww.recycled-energy.com 9 220 MW from Steel Smelters Waste Energy Significantly enhances mills competitive position. Annual CO 2 savings of 916,000 metric tons/year more than all grid connected solar worldwide. Courtesy Primary Energy

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RED | the new greenwww.recycled-energy.com 10 44 MW from Silicon Production (Alloy, WV) $55-million investment Recycles exhaust into 45 megawatts More efficient plant will expand production and jobs by 20% We are taking silicon manufacturing back from China!

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RED | the new greenwww.recycled-energy.com 11 Trigeneration in Oklahoma City 1.2 MW of electric capacity 17,500 tons of chilled water 290,000 lbs/hr of steam 26 downtown customers Trigen Energy

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RED | the new greenwww.recycled-energy.com 12 U.S. Delivered Electric Efficiency Efficiencies of Energy Recycling Projects Steam Pressure Recovery (190 Projects) Combined Heat & Power (56 Projects) Industrial Waste Heat Recovery (6 Projects)

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RED | the new greenwww.recycled-energy.com 13 Clean Energy Standard Offer Program (CESOP) Calculate the true costs of generating and delivering power from new centralized facilities. Offer 20-year CESOP contracts to anyone delivering clean power for 80% of that cost. Consumers obtain a discount against current best deal for new power. Utilities keep their customers.

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RED | the new greenwww.recycled-energy.com 14 Output-Based Allocations Provide each electric (and thermal) producer with allowances equal to average emissions. Every plant must obtain allowances equal to its CO 2 emissions dirty plants purchase extra allowances from clean plants at market rates. Reduce allowances every year to cut emissions. Fiscally neutral dirty generators pay clean generators. Provides both sticks and carrots immediate financial incentives to everyone who lowers GHG emissions.

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RED | the new greenwww.recycled-energy.com 15 Thank You Dick Munson Recycled Energy Development dmunson@recycled-energy.com www.recycled-energy.com dmunson@recycled-energy.com