1. U.S. EPA’s CHP Partnership: Supporting CHP in the Midwest Midwest Cogeneration Association Bimonthly Meeting November 28, 2001 Joe Bryson Team Leader, CHP Partnership, U.S. EPA

2. Overview CHP is key item on the federal government’s energy/environmental policy radar U.S. EPA’s CHP Partnership: EPA-industry initiative to recognize & promote CHP projects and their benefits Midwest is leading region targeted for attention –Need your input

3. Bush’s National Energy Policy May 2001 “CHP is environmentally preferred, cost effective, efficient, and reliable.” Directs EPA/Treasury to promote CHP –EPA at brownfields sites through flexible permitting with greater clarity & shortened permitting times –Treasury evaluate shortened tax lives or investment tax credits

4. National Energy & Environmental Challenges Energy Challenges –Reliable –Low-cost –National security Environmental Challenges –Human health –Local/regional environment –Global environment

5. CHP Characteristics Distributed: located where energy is used –Increases reliability –Avoids T/D line losses Highly efficient: reduces fuel consumption –Lowers costs ==> increased competitiveness –Less fuel combusted ==> reduced emissions Employs waste fuels –Lowers costs –Avoids disposal issues

6. Efficiency of U.S. Electricity Generation Is Low and Stagnant Fossil-fired power plants have not improved their efficiency in last four decades: ~32% (before line losses) Amount of energy U.S. wastes each year is greater than Japan’s entire annual energy use CHP is 60-90% efficient

7. Large CHP Opportunity Still Exists 0 20 40 60 80 100 1025501002003004005001000>1,000 SaturationOpportunity % Steam Draw (1000 lbs/hr) 10 MW1 100 Source: General Electric

8. Existing : 48 GW Potential: 88 GW Chemicals 29% Paper 16% Refining 13% Food 9% Metals 5% Other Industrial 19% Commercial & Institutional 9% CHP Opportunity in Industrial Sector Paper 30% Refining 13% Chemicals 11% Food 9% Metals 8% Other Industrial 29%

9. CHP Opportunity in Commercial & Institutional Sectors Colleges 29% District Energy 20% Government 13% Hospitals 10% Water/ Waste 8% Other 20% Source: Onsite Energy Existing: 5 GW Education 27% Health Care 24% Office Buildings 21% Food Sales/ Service 10% Lodging 7% Other 11% Potential: 75 GW

10. U.S. Lags Europe in Realizing CHP Opportunity

11. EPA’s CHP Partnership bVoluntary program to foster accelerated development of CHP projects bEPA-Industry Partnership including -- Industrial, commercial and institutional endusers -- Project developers and equipment suppliers -- Local distribution utilities -- Federal, state, and local policymakers -- Nonprofits bWithin Climate Protection Partnerships Division -- ENERGY STAR Label (enduse efficiency) -- New Clean Energy partnerships: CHP & Green Power

12. EPA’s CHP Partnership: The Basics Partners agree to –work with EPA to promote the benefits of CHP and support development of new projects –report data on existing and newly developed CHP projects –provide input to EPA-developed tools/services –employ tools/services to develop and promote new projects EPA will –promote understanding/recognition of CHP benefits –with partner input, develop tools/services to accelerate project development and recognize partners’ projects

13. Founding Partners Abbott Laboratories Archer Daniels Midland Bethlehem Steel Caterpillar Energy Products Group Dow Chemical Co. ExxonMobil General Motors International Paper Real Energy Solar Turbines Texaco Power and Gasification International Trigen Energy Co. U.S. Steel Verizon Communications Weyerhaeuser College of New Jersey NY State Energy R&D Authority (NYSERDA) UNC at Chapel Hill

14. Founding Partners Leading entities, diverse representation –Largest current CHP users: chemical, refining, steel and paper –Diverse end-users: industrial, commercial, district energy, and power reliability –Diverse stakeholders: end-users, equipment suppliers, project developers, and state agencies > 5,800 GWs & >10% of U.S. CHP capacity Annual environmental/energy benefits: > 8 million tons CO 2 > 29,000 tons of NO X > 19 million barrels of oil

15. Sample Tools/Services Regulatory/Policy Support –Educate policymakers on CHP benefits and environmental policies for recognizing them –Permitting handbook and project-specific assistance –Web-based State Best Practices, links, and analysis Public Recognition –ENERGY STAR CHP Awards –Ribbon-cutting ceremonies –Press kits

16. Sample Tools/Services - Continued Outreach/Education –Web-based partner profiles and case studies –Participation in regional CHP initiatives Market Development –Web-based “yellow pages” for service/equipment providers –State profiles of CHP installations & opportunities Technical –Emissions impact calculator

17. Pilot Initiatives in Target Markets Regional markets –NY/Northeast (NYSERDA) –IL/Midwest (Midwest CHP Initiative, MCA) –Texas (TNRCC) End-user markets –Small/medium industry (gas/industry trades) –District energy (IDEA) –Hospitals, office buildings, & hotels (ENERGY STAR label for buildings)

18. ENERGY STAR Buildings Label Top 25% within Market Based Upon ENERGY STAR Benchmarking Tool (Btu/sq.-ft.) –Completed: office space, supermarkets and grocery stores, K-12 schools, and hospitals –Beta testing: hotels and convenience stores http://www.energystar.gov –Click on “Benchmark your building’s energy performance”

19. ENERGY STAR CHP Award Recognize exceptional CHP facilities Requires one year of operating data Use 5% less fuel than state-of-the-art separate heat-and-power generation http://www.epa.gov/appdstar/news.html

20. Draft Guidance Source Determinations for CHP Under New Source Review and Title V Programs of the Clean Air Act Clarifies treatment of third-party CHP facilities providing energy to host 30-day comment period closes 11/14/01 http://www.epa.gov/ttn/nsr/whatsnew.ht ml

21. Reactions to proposed products/activities Ideas for new products/activities Discussion of what would make a difference in midwestern CHP markets Follow-up: Joe Bryson Team Leader U.S. EPA’s CHP Partnership (202) 564-9631 bryson.joe@epa.gov Reactions. Input. Ideas. How Can EPA Contribute in Midwest?