INTERMOUNTAIN CHP CENTER Resources for Clean Energy (generation) Project Evaluation and Implementation Patti Case, ETC Group Electrical Generating Systems Association Annual Fall Conference Colorado Springs, CO September 15, 2009 INTERMOUNTAIN CHP CENTER www.intermountainCHP.org

On Deck What are the Clean Energy Application Centers and what help can they offer? Examples of CE-AC/supplier/end-user collaborations Stimulus & other funding for CHP, waste heat recovery, and district energy Other Colorado resources FYI Colorado’s use of stimulus funds for energy

Origin of the Regional Application Centers (2001) Over 50 companies contributed to National Roadmap: Technology Deployment Determined need for a stronger regional focus DOE/ORNL Working Group suggests local “SWAT Teams” DOE EERE’s approach: CHP Regional Application Centers

Eight Application Centers Now Serve all 50 States Midwest www.chpcentermw.org Northeast www.northeastchp.org Northwest Region www.chpcenternw.org Mid Atlantic www.chpcenterma.org Pacific www.chpcenterpr.org Intermountain www.IntermountainCHP.org Southeastern www.chpcenterse.org (Contact info at end of presentation) Gulf Coast www.GulfCoastCHP.org

INTERMOUNTAIN CHP CENTER Contact Info For Your Reference Pacific: Univ. of California, Tim Lipman, 510-642-4501, telipman@berkeley.edu Intermountain: ETC Group, Patti Case, 801-278-1927, plcase@etcgrp.com Gulf Coast: Houston Advanced Research Center, Dan Bullock, 281-364-6087, dbullock@harc.edu Midwest: University of Illinois, John Cuttica, 312-996-4382, cuttica@uic.edu Southeastern: North Carolina State University, Keith McAllister, 919-515-3933, keith_mcallister@ncsu.edu Northeast: Pace University, Tom Bourgeois, 914-422-4013, tbourgeois@law.pace.edu Mid-Atlantic: Penn State University, Anthony Atchley, 814-865-2151, aaa9@psu.edu Northwest: Washington State University, David Sjoding, 360-956-2004, sjoding@energy.wsu.edu INTERMOUNTAIN CHP CENTER www.intermountainCHP.org

National Goal: Double CHP by 2010 46 GW in 1998 85 GW in 2008 92 GW in 2010 Two points: CHP is growing, and RACs are helping

The CHP Regional Application Centers are expanding in scope Fall 2009, with our new round of funding, the Centers will now also cover: Waste heat recovery District energy Names changing to “Clean Energy Application Centers”

What We Actually Do Inform prospective CHP users on the benefits, business model, and resources available for their specific application Websites, workshops, trainings, webinars, advisory Help potential projects “take the next step” Project feasibility screenings, permitting issues, tariffs/rate assessments, equipment questions, convincing upper management, 3rd party review of proposals… Promote CHP as an effective clean energy policy solution: Educate state policymakers and regulators, remove barriers

On-The-Ground Results and Accomplishments Supported over 350 projects representing over 1.3 GWs CHP 7.7 million tons of CO2 avoided Over 120 target market workshops (9000 attendees) Hospitals and Healthcare Waste Heat to Power Manufacturing Food Processing Forest Products Livestock Waste Water Treatment Energy Assurance Multi-family housing Federal Facilities Municipalities Premium Power Gas Utility Clients

*Input from project developers/installers is important!* We are open to your suggestions (& collaboration) for our future target market identification/education efforts *Input from project developers/installers is important!*

Policymaker Education Has Resulted In… New state CHP incentive programs Connecticut Distributed Energy Incentive Program Improved state interconnection standards Inclusion of CHP in energy efficiency, renewable portfolio standards, carbon mitigation efforts, and regional power planning Western Governors’ Association’s Clean and Diversified Energy Initiative Northwest Power Planning Council North Carolina RPS Connecticut Distributed Energy Incentive Program: CHP is offered several incentives for installation in Connecticut. CHP is included in the states Renewable Portfolio Standard, offered direct incentives in congested areas, and eligible for both investment and production tax credits. Western Governors Association Clean and Diversified Energy Initiative: The regional Initiative identifies the benefits and market potential in the western states and presents a portfolio of policies that will accelerate deployment of CHP. Northwest Power Planning Council: The regional Council produced an electric power and conservation action plan that encourages utilities to remove regulatory and market barriers to CHP projects. North Carolina Renewable Energy and Energy-Efficiency Portfolio Standard (REPS): The North Carolina REPS sets the target of 12.5% of retail utility sales in 2020 being generated by renewable energy and energy efficiency. 25% of this target (3.125% of retail sales) may come from energy-efficiency and CHP.

Site Assessments: Different Levels of Assistance Questionnaire (end user or CE-AC) Level 1 Screening / Walkthrough Analysis (CE-AC) Level 2 Conceptual / Financial Analysis (CE-AC or engineering firm) Level 3 Investment Grade (engineering firm)

Example: Ethan Allen Furniture Factory Furniture manufacturer since 1889 Employs 550 people in VT & NH Annual Energy Costs of $1,500,000 Factory was planning on closing and moving offshore

Ethan Allen (cont’d) Center Recommendation: Replace steam engine with steam turbine using biomass fired boiler 3 year payback, 10% savings off energy costs Co-funded by Vermont, New Hampshire, & VT Electric Co-op Plant has stayed on shore.

Example: Conant High School, Illinois 450,000 sq. ft., 2,600 student high school Technical assessment conducted in 2002 Two 400 kW engine generators with heat recycling

Example: Seaman Paper Company Tissue Paper Mfg. $55m/yr sales and over $3.2m/yr energy costs Center Recommendation: Replace oil fired boiler with biomass boiler Use steam turbine to generate power <3 yr. payback

ARRA Funds for CHP Q: Are there ARRA funds for CHP projects? Sorry, deadline for solicitation has passed Q: Results/winners? We haven’t heard yet (October 2009) Q: Any other ARRA funding expected for CHP? No national-level solicitations that we are aware of Q: Are you always this unhelpful? No. We’ll tell you about other incentives and some state funds available

Submitted Colorado Lumber Mill Proposal for 7 MW biomass fired CHP system submitted with technical assistance from Intermountain Center Multiple, proprietary projects submitted with assistance from NW Center AZ project did not submit due to “made in America” requirements

Kulzer Energy Park $4 million for Stevens County, WA project from USFS for 2-4 MWc CHP system with specialty beam mill and biochar production system Tied to healthy forests and re-building carbon content in area farms

Bonus Depreciation ARRA extended the five-year bonus depreciation schedule through 2010 and includes CHP, thereby allowing 50 percent of the depreciation value to be taken in the first year and the remainder over the following four years

Non-ARRA Incentives for CHP (But stimulating none-the-less) USDA REAP grants For projects in rural areas Business Energy Investment Tax Credit 10-30% tax credit Or: Dept. of Treasury Renewable Energy Grants Yes, CHP does count State-specific incentives Ex. Colorado Carbon Fund

CHP Investment Tax Credit Energy Improvement and Extension Act of 2008 (EIEA) 10% credit for cost of first 15 MW To Qualify 20% electricity, 20% thermal <50 MW Taxpayer constructed (or original equip. owner) placed in service after October 3, 2008, and before January 1, 2017 60 percent efficient on a lower heating value basis, if 90 percent of the system's energy source is biomass CHP Investment Tax Credit EIEA created a 10 percent investment tax credit (ITC) for the costs of the first 15 megawatts (MW) of CHP property. To qualify for the tax credit, the CHP system must: Produce at least 20 percent of its useful energy as electricity and 20 percent in the form of useful thermal energy. Be smaller than 50 MW. Be constructed by the taxpayer or have the original use of the equipment begin with the taxpayer. Be placed in service after October 3, 2008, and before January 1, 2017. Be 60 percent efficient on a lower heating value basis. The 60 percent efficiency requirement does not apply to CHP systems that use biomass for at least 90 percent of the system's energy source. The ITC may be used to offset the alternative minimum tax, and the CHP system must be operational in the year in which the credit is first taken. ARRA allows taxpayers eligible for the CHP ITC to receive a grant from the U.S. Treasury Department instead of taking the ITC for new installations. For eligible CHP projects, the Department of Treasury will make payments to qualified applicants in an amount equal to 10 percent of the system cost. On July 9, 2009, the Treasury Department issued guidance for receiving a grant in lieu of the ITC. For more information including the guidance document (PDF) (20 pp, 138K), terms and conditions (PDF) (3 pp, 29K), and a sample application (PDF) (6 pp, 75K), please visit the U.S. Department of Treasury's Web site. Please note: The Department of Treasury is not yet accepting applications for grants. This information has been released to allow companies to prepare in advance for submitting a grant application. The CHP ITC is claimed through IRS Form 3468 (PDF) (3 pp, 249K), available on the IRS's Web site. Facility owners who claim the ITC can not claim the production tax credit (PTC).

Microturbines and Fuel Cells ITC Extended to 2016 Micro turbines 10% up to 2 MW, capped at $200/kW Fuel Cells 30%, at least .5 kW, capped at $1,500 per 0.5 kW To Qualify Micro turbines 26% electric-only generation efficiency Fuel Cells 30% electric-only generation efficiency All may receive grant in lieu of ITC (Treasury is not yet accepting applications) http://www.epa.gov/chp/incentives/index.html CHP Investment Tax Credit EIEA created a 10 percent investment tax credit (ITC) for the costs of the first 15 megawatts (MW) of CHP property. To qualify for the tax credit, the CHP system must: Produce at least 20 percent of its useful energy as electricity and 20 percent in the form of useful thermal energy. Be smaller than 50 MW. Be constructed by the taxpayer or have the original use of the equipment begin with the taxpayer. Be placed in service after October 3, 2008, and before January 1, 2017. Be 60 percent efficient on a lower heating value basis. The 60 percent efficiency requirement does not apply to CHP systems that use biomass for at least 90 percent of the system's energy source. The ITC may be used to offset the alternative minimum tax, and the CHP system must be operational in the year in which the credit is first taken. ARRA allows taxpayers eligible for the CHP ITC to receive a grant from the U.S. Treasury Department instead of taking the ITC for new installations. For eligible CHP projects, the Department of Treasury will make payments to qualified applicants in an amount equal to 10 percent of the system cost. On July 9, 2009, the Treasury Department issued guidance for receiving a grant in lieu of the ITC. For more information including the guidance document (PDF) (20 pp, 138K), terms and conditions (PDF) (3 pp, 29K), and a sample application (PDF) (6 pp, 75K), please visit the U.S. Department of Treasury's Web site. Please note: The Department of Treasury is not yet accepting applications for grants. This information has been released to allow companies to prepare in advance for submitting a grant application. The CHP ITC is claimed through IRS Form 3468 (PDF) (3 pp, 249K), available on the IRS's Web site. Facility owners who claim the ITC can not claim the production tax credit (PTC).

Colorado: NEED Grants (New Energy Economic Development) Commercial/industrial/public sectors For energy efficiency and renewable energy projects $2m in funding for this round No max per projects 1st deadline was August 28th (but 2 other rounds will follow)

Still the best source for all incentive information: DSIRE Database (Database of State Incentives for Renewables & Efficiency) www.DSIREUSA.org Also check… EPA CHP Partnership www.epa.gov/chp - Clean Energy Application Centers (see websites or just call) Note: our website lists incentives unique to our states; other CE-AC websites probably do the same… INTERMOUNTAIN CHP CENTER www.intermountainCHP.org Text text

New Colorado Industrial Energy Efficiency Program Launching This Fall Voluntary commitments to reduce energy intensity Assessments, technical assistance, goal-setting, trainings, public recognition INTERMOUNTAIN CHP CENTER www.intermountainCHP.org Text text

New Colorado Industrial Energy Efficiency Program (cont’d) Stems from Gov. Ritter’s Colorado Climate Action Plan Governor’s Energy Office, SWEEP, ETC Group, Colo State Univ. One of 12 state/regional industrial EE programs selected to receive funding from DOE ITP solicitation Will promote upcoming ISO energy management standard 50001

INTERMOUNTAIN CHP CENTER Industrial Assessment Centers Energy, waste, and productivity assessments to small and mid-sized manufacturers Funded by DOE Assistance provided by upper-level engineering students INTERMOUNTAIN CHP CENTER www.intermountainCHP.org

Colorado Governor’s Energy Office (GEO) Home Weatherization: $80m over 3 years Energy Efficiency and Conservation Block Grants (EECBG): $45m over 3 years Most to cities/counties, some to state State: local code development & training, residential EE, “Greening Main Street” (commercial EE), & more State Energy Program…

CO State Energy Program $50m over 3 years, from ARRA funds 42% Financing and Capital Grants 21% Renewable Energy Programs 12% Residential Programs 11% Commercial Buildings Programs 10% Greening Government Programs 3% Public Information & Outreach 1% Utility and Transmission Programs

Questions? Patti Lynn Case 801-278-1927 plcase@etcgrp.com 801-278-1927 Director, Intermountain Clean Energy Application Center www.intermountainCHP.org Vice President, ETC Group www.etcgrp.com