Renewables (CHP), Global Warming, and Energy Efficiency Richard Brent Solar Government Affairs Lake Tahoe, California July 28, 2005 California Manufacturers & Technology Association Energy Conference

Conversion Losses d Residential 4.37 Commercial 4.17 Industrial 3.38 Energy Consumed To Generate Electricity Electricity Flow Source: Annual Energy Review, Energy Information Administration, 2004 CHP Opportunity

CHP System Exhaust Bypass Silencer Air Inlet Filter Heat Recovery Steam Generator (HRSG) Generator Gas Turbine Engine Duct Burner Diverter Valve Exhaust Silencer 45 Units Heat 100 Units30 Units Electricity 25 Units Losses 75 % System Efficiency Digester Gas Landfill Gas Bio-Derived Fuels

CHP Potential in California Scenario Market Penetration ( ) Description Base Case1,996 MW Expected future conditions with existing incentives High Deployment Case7,340 MW $40/ kW year T&D capacity payments for projects < 20 MW, global warming incentives, wholesale export, extended SGIP (incentives on first 5 MW for projects < 20 MW), $0.01/ kwh CHP production tax credit Expected Benefits Base Case: 400 trillion BTUs of energy savings $1 billion in reduced facility operating costs CO 2 emissions reduction by 23 million tons High Deployment Case: 1,900 trillion BTUs of energy savings $6 billion in reduced facility operating costs CO 2 emissions reduction by 112 million tons Source: Assessment of California CHP Market and Policy Option for Increased Penetration, EPRI, Palo Alto, CA, California Energy Commission, Sacramento, CA: 2005