1. 1 RED | the new greenwww.recycled-energy.com 1/15/08 West Virginia: Opportunities to Capture Waste Energy Presentation to Senate Committee on Economic Development Dick Munson, Recycled Energy Development January 15, 2008

2. 2 RED | the new greenwww.recycled-energy.com 1/15/08 Recycled Energy Development  $1.5 billion of equity. Eager to invest in West Virginia, with $200 million of clean energy projects already under discussion.  Goal is to reduce greenhouse gas emissions profitably.  Helps industries slash energy costs, increase their competitiveness, maintain and create jobs.  Avoids line losses and transmission additions.  RED principals have built more than 250 power plants, costing more than $2 billion and producing more than 10,000 megawatts.

3. 3 RED | the new greenwww.recycled-energy.com 1/15/08 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 Edison’s 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.  Capturing waste heat -- energy recycling – could generate 200,000 megawatts – equal to output of 400 coal plants.

4. 4 RED | the new greenwww.recycled-energy.com 1/15/08 Rising Electricity Costs  Important difference between today’s average power cost and the cost of building future power plants. TVA and Ontario are tackling with Standard Offers.  Clean Air Interstate Regulations (CAIR) and mercury rules will add $550-850/kw for existing plants.  Average WV coal plant is 45 years old. New plants cost $2,500/kw, up from $800/kw in late 1990s.  Fuel costs are 3-5 times above 1990 levels, and long-term contracts now below the spot market.  Pending expenses: transmission expansion, greenhouse-gas reductions (carbon credits of $20/ton would add 2 cents/kwh).

5. 5 RED | the new greenwww.recycled-energy.com 1/15/08 What is Energy Recycling? Converting industrial waste energy to heat and power:  Exhaust heat from any industrial process or power generation,  Industrial tail gas that would otherwise be flared, incinerated or vented,  Pressure drop in any gas. Recycling waste heat from power generation:  Local combined heat and power (CHP) plants recycle byproduct heat to displace the boiler fuel of nearby thermal users.

6. 6 RED | the new greenwww.recycled-energy.com Conventional Central Generation Fuel 100% 33% delivered electricity Power Plant T&D and Transformers Pollution 67% Total Waste Line Losses 9-20%

7. 7 RED | the new greenwww.recycled-energy.com Combined Heat and Power (CHP) Fuel 100% Steam Electricity Chilled Water 90% 10% Waste Heat, no T&D loss Pollution (At or near thermal users) CHP Plants

8. 8 RED | the new greenwww.recycled-energy.com Recycled Energy (At user sites) Waste Energy 100% 10% Waste Heat Steam Generator 65% Steam 25% Electricity Back-pressure Turbine Generator No Added Pollution

9. 9 RED | the new greenwww.recycled-energy.com 1/15/08 96 MW Generated from Coke Oven’s Waste Heat (Mittal Steel)

10. 10 RED | the new greenwww.recycled-energy.com 1/15/08

11. 11 RED | the new greenwww.recycled-energy.com 1/15/08 Energy Security Act Encourages Recycled Energy (signed by President Bush on December 19, 2007)  Defines clean energy as power plants converting at least 60% of the fuel’s potential energy to useful thermal energy, electricity, mechanical energy, chemical output, or any combination thereof.  Provides $10/megawatt-hour grant for first three years of electricity produced from clean energy projects.  Orders Environmental Protection Agency to create a waste-energy inventory.

12. 12 RED | the new greenwww.recycled-energy.com 1/15/08 West Virginia’s Draft Clean Energy Standard Offer Program (CESOP) West Virginia could encourage development of recycled energy and other clean technologies with a 'Clean Energy Standard Offer Program' (CESOP)  Offer 20-year CESOP contracts for electricity generated by qualifying clean technology facilities, as defined in Subtitle D of the 2007 Energy Act.  Pay roughly 80% of the cost of delivering power from new coal plants. Obtain a discount against current best deal for new power.  Embrace opportunity to capture waste heat from West Virginia’s energy-intensive industries. Increase the competitiveness of those industries.

13. 13 RED | the new greenwww.recycled-energy.com 1/15/08 Thank you Dick Munson Senior Vice President, Recycled Energy Development dmunson@recycled-energy.com 630/590-6035