1. RED | the new greenwww.recycled-energy.com 1 Vision – Chicago: Hub of the 21 st Century Clean Energy Economy Growing Chicago’s Clean Energy Economy Sean Casten, President & CEO Recycled Energy Development, LLC May 11, 2010 University of Chicago Chicago IL

2. RED | the new greenwww.recycled-energy.com 2 What is Chicago’s core competence? Richard Longworth’s question Author, Caught in the Middle: America’s Heartland in the Age of Globalism Former senior correspondent for Chicago Tribune Now senior fellow at Chicago Council on Global Affairs How has Chicago avoided the economic collapse that has struck the rest of the rust belt? Longworth’s answer: other cities specialized in making things while Chicago specialized in understanding how things are made World leaders in manufacturing-focused finance, advertising, consulting, insurance, logistics are all based in Chicago How does Chicago clean energy economy best capitalize on these innate skills?

3. RED | the new greenwww.recycled-energy.com 3 Chicago has deep understanding of how heat & power are produced and used. 2/3rds of US fossil fuel use / CO 2 emissions is associated with the production of heat and power. Any transition to a clean energy economy will ultimately be measured by its ability to reduce our fossil fuel use per unit of economic activity. Chicago’s industrial understanding gives knowledge base not found in other regions GTI, UIC Industrial Assessment Center, etc. The premier global energy recycling firms are all based in Chicagoland, drawn by regional competencies Recycled Energy Development, Primary Energy, Capital Power, Lakeside, Endurant Energy, others.

4. RED | the new greenwww.recycled-energy.com 4 RED representative project Project will generate 60 MW of power from presently wasted heat Will produce 464,000 MWh of fuel-free power/year – same as would be produced by 265 MW of solar PV. Will lower the cost of silicon production - and therefore, PV.

5. RED | the new greenwww.recycled-energy.com 5 Primary Energy representative project 95 MW of power recovered from the exhaust of 268 coke ovens. Saves host ~$40 million/year with negative CO 2 emissions/MWh. A clean energy economy depends upon steel, silicon, cement and other innately carbon-intensive raw materials; reducing their CO 2 - intensivity is key. Courtesy Primary Energy

6. RED | the new greenwww.recycled-energy.com 6 A clean energy economy needs a goal-driven, holistic policy. Favored paths change over time, creating short-term incentives at odds with long-term capital investment. Nuclear, ethanol, wind, PV have all seen spectacular boom/bust cycles over past 40 years in US and Europe Incentives wax/wane with electoral cycles and energy crises Cyclicality of incentives ironically at odds with goals. Regulatory volatility has raised cost of capital for cleanest (often lowest risk) technologies. Chicago’s manufacturing-dependent economy will suffer so long as environmental policies are in conflict with economic policies. Clean energy is not innately expensive – but clean energy policy is often incompatible with cheap energy policy.

7. RED | the new greenwww.recycled-energy.com 7 Deploying low-cost, clean generation requires reforms to affect power price and contract tenure. No new baseload generation in nearly 30 yrs Retail prices trended towards marginal costs as long as there was spare generating capacity on nuke/coal/hydro fleet Supply constraints driven prices up since 2001, will continue Wholesale markets also drive down to marginal cost; no generation technology (clean or dirty) can be built & amortized based on wholesale market signals. Markets not yet deep enough to provide long-dated contracts Long-dated contracts generally not available outside of utility commissions (which don’t work for non-utility participants) and path-driven RPS mandates; many win/win low cost & clean approaches have no route to market.