1 Exportación y Cambio Climático Una revolución conceptual viableSeminario CERA Exportación y Cambio Climático Construyendo la Agenda Energía Gris Una revolución conceptual viable Lic. Claudio R. Hirschler- Consultor Asociado Recycled Energy Development- Illinois-EEUU EnergyCo, México DF, México Buenos Aires, abril 22, 2010 RED | the new green

2 Evolución del Consumo de Energía (1850-2007)Población + 430% Consumo per Cápita up 760% Consumo total up 4600% 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% Nuclear Natural Gas Oil Hydro Coal Wood 1850 1900 1950 2000 1850 1900 1950 2000 1850 1900 1950 2000 Source: Arulf Grubler (1998), BP Statistical Review of World Energy (2008), US Bureau of Census (2008) RED | the new green

3 La emisión de gases de invernadero se acelera año a añoLa emisión de gases de invernadero se acelera año a año. Virtualmente se duplicó en 30 años. 100% 50% 0% Emisión de GdI originados en el uso de combustibles fósiles. (acum, en MT CO2equiv.) 90% desde1909 1979 Source: RED calculations based on data from BP Statistical Review and J. David Hughes, Geological Survey of Canada (ret.) RED | the new green

4 Consideraciones El impacto del proceso de sustitución del uso de combustibles fósiles será largo y lento, posiblemente medible en términos generacionales. En principio, la sustitución sólo producirá una inflexión en el crecimiento geométrico de la emisión de gases de invernadero. Parece dificil que se llegue a un acuerdo que logre una disminución a corto plazo de los niveles absolutos de emisión Las crecientes necesidades de energía de las economías que más crecen (las más pobladas del planeta), seguirán estando basadas en la combustión de petróleo, gas natural y, notablemente, carbón. Hay que seguir incrementando, ahora dramática-mente allí donde se pueda, la eficiencia en el uso de la energía. RED | the new green

5 La Ceguera de los ParadigmasLo esencial es invisible a los ojos. Joven, a tu edad nada importa, cuando la vista se acorta….es cuando se empieza a ver. Tenemos un elefante en la casa…y no lo vemos.

6 Sumario La generación termoeléctrica es ineficiente e inherentemente dispendiosa. En términos globales contribuye con cerca de un 1/3 a la liberación a la atmosfera de gases de invernadero. El uso del calor de los procesos mediante su reciclado duplica la eficiencia, reduce los costos de producir energía eléctrica, y disminuye directa e indirectamente la emisión de gases de invernadero. Desarrolladores como RED ofrecen proveer los conocimientos esenciales y el capital para generar de manera rentable energía eléctrica con el calor y los gases producidos por los procesos industriales RED | the new green

7 Generación ConvencionalCogeneración (CHP) Modelo de Negocio RED | the new green

8 Generación Termoeléctrica Tradicional 1960 (& 2009)Contaminación Calor Liberado 65% Combustible Fósil 100% Pérdidas Lineas 2% Useful Power 33% The conventional power generation has not changed in fifty years. One hundred units of fuel go into the power plant. 65% goes up in the air, as seen on the last slide, as waste heat. Then 7.5% of the electricity or 2% of the original heat is lost in transmission. Finally, 33% of the heat in the fuel is delivered to consumers. Three units of fuel produce one unit of delivered energy. Fuel Generation Transmission Consumption RED | the new green

9 Planta de Generación TípicaChildren who watch the Simpsons know that much of the heat goes into the air through the cooling tower. But why look at cartoon power plants. RED | the new green

10 Electric-only generation plants waste 2/3’s of input energy 600 MW plant, Craig, COThis is a real power plant. The clouds of vapor from the cooling towers on the right plus the heat from the three tall stacks shows 2/3’s of the heat being wasted. RED | the new green

11 Generación ConvencionalCogeneración CHP Modelo de Negocio RED | the new green

12 Planta Generadora + Vapor + AguaCogeneración en plantas generadoras Generación de calor y energía para reducir costos Calor y gases liberados 33% Comb. Fósil 100% Useful Thermal Energy 33% 66% Efficient Useful Power 33% Recycle Waste Heat The first approach is to build new electric generation near thermal users, designing the size of the plant to match the size of the thermal load. Only one third of the heat is vented while another third is delivered as electricity and the final third is delivered as thermal energy. Topping cycle cogeneration doubles the efficiency of conventional electric-only generation, saving money, fuel and emissions. Fuel Planta Generadora + Vapor + Agua RED | the new green RED | the new green

13 Cogeneración aguas abajo con captura de fuentes de energía térmicaBottoming cycle cogeneration Recycling industrial waste energy Saved Energy Input E.Eléctrica Bienes Finales Planta de reciclaje Combustible Fósil Emisiones The conventional factory imports electricity and process fuel to turn raw materials into finished goods. Many processes also vent significant amounts of waste energy. Bottoming cycle cogeneration burns no incremental fuel. Highly specialized plants are designed to capture and recycle streams of waste energy into heat and power. The factory reduces its purchase of power and fuel while still producing the same amount of finished goods. The laws of physics are not violated. The waste energy is reduced. Electricidad Vapor Agua Caliente Planta Industrial RED | the new green

14 Conventional GenerationCombined Heat & Power Modelo de Negocio Now it is time to talk solutions. Proven technology can profitably double the efficiency by combining heat and power generation in distributed plants co- located with thermal hosts. RED | the new green

15 Costos equiv. según tipo de generaciónPromedio de tarifas mayoristas en alta y media tensión (2008) Promedio en México Fotovoltáica Solar Solar concentrada Eólica Offshore CC Gas Eólica Onshore Carbón con CO2 ret. Nuclear Syngas Biomasa Geotérmica Biomasa CHP Fósil CHP Energía reciclada Reciclada CHP Carbón ” All-in Cost of Clean Energy Generation* US$ per delivered MWh c/energía reciclada This chart shows the cost of power needed to cover all of the costs and produce a market level return on investment for fourteen clean energy generation options. A line at $100 per megawatt-hour, equivalent to 10 cents per kilowatt-hour, shows the average retail price of power in the U.S. in Note that the options that use energy twice – that recycle normally wasted energy – can feasibly sell power at below the average retail price. All of the other clean energy options raise the price of power. * Incluye T&D, pérdidas de línea, generación de backup and subsidios netos de impuestos RED | the new green

16 El modelo de negocio del desarrolladorCliente Industrial: Suministra el calor de su proceso industrial Compra la energía térmica y la electricidad del proyecto, bajo un contrato a largo plazo El desarrollador provee: Know-how y capital Construye, opera y es propietario (BOO) la planta de reciclado de energía Los acuerdos son “open-book”, y se comparten los resultados de la operación. El contrato alinea los intereses de las partes para asegurar la relación entre ellas a largo plazo. El cliente industrial mantiene el foco en su negocio. RED | the new green

17 EVALUACION DE FACTIBILIDAD TECNICAPaso 1.- EVALUACION DE: Temperatura de los gases en el punto de entrega Masa/Flujo y composición química de los mismos Composición y cantidad de partículas en suspensió Paso 2 Croquis de lay-out de planta y flujo del producto Intermitencias del proceso de calor y características del mismo Necesidades energéticas de base y de calor y/o enfriamiento en la planta y/o sus aledaños. Volúmenes y/o temperaturas Distancias a potenciales puntos de consumo adicionales Análisis de potenciales problemas de interferencia al proceso productivo (de realizarse en planta operativa) Paso 3 Evaluación integral de la factibilidad técnica RED | the new green

18 EVALUACION DE LA VIABILIDAD ECONOMICA-FINANCIERAPaso 1.- Análisis del ramo del negocio del cliente, de su situación en el país y en el contexto global. Análisis integral de la historia y evaluación del futuro de la empresa. Evaluación de la disponibilidad y precios potenciales de la energía eléctrica en el país. Evaluación del marco regulatorio y su evolución probable. Paso 2 Definición y discusión con el cliente de las pautas básicas del primer modelo del negocio Ni bien se cuente con una estimación integral del monto de la inversión requerida comienzan a evaluarse en detalle los aspectos técnicos, económico-financieros y legales del proyecto. RED | the new green

19 U.S. Delivered Electric EfficiencyLa experiencia del desarrollador 260 proyectos ahorran a la industria $500 million y evitan la emisión de 5 million ton CO2 Industrial Waste Heat Recovery 14 Projects Steam Pressure Recovery 190 Projects Combined Heat & Power 56 Projects RED’s predecessor companies have proven the viability of combining heat and power with 250 projects in many countries that had capital costs of roughly $2 billion. The dots show when the projects were built and the net electric efficiency. Note that the worst of these projects achieves double the efficiency of the U.S. electric grid. U.S. Delivered Electric Efficiency RED | the new green

20 U.S. Potential to Recycle Waste EnergyPotential to reduce U.S. CO2 by 20% and save $80 to $100 billion per year, World Alliance for Decentralized Energy (WADE) study We have not found a study, but know that Mexico has many opportunities to profitably recycle waste energy Government agencies have identified 200,000 of electricity capacity that could be generated with cogeneration plants that greatly cut the use of fossil fuel and cut the emissions of carbon dioxide, while saving money for the hosts. RED | the new green RED | the new green

21 Beneficios potenciales a nivel microeconómicoMejora de posición competitiva a nivel global: Mayores ingresos por venta de energía reciclada excedente Reducción de exposición a precios volátiles Menores costos de energía térmica Bajar niveles de emisión de carbono and y otros gase RED’s principals have enjoyed working with over 1,700 commercial and industrial customers over the past thirty years. We have learned much about how to extract value from otherwise wasted energy. We hope you will allow RED to work with your organization to recycle waste heat and profitably reduce your greenhouse gas emissions. RED | the new green

22 Beneficio a nivel macroeconómicoReciclado de energía liberada no utilizada ayudará a: Transformar y modernizar la industria de manera rentable Beneficiar a todos los consumidores eléctricos y a la economía. Duplicar la eficiencia de la generación reduciendo la contaminación, incluyendo el dióxido de carbono RED’s principals have enjoyed working with over 1,700 commercial and industrial customers over the past thirty years. We have learned much about how to extract value from otherwise wasted energy. We hope you will allow RED to work with your organization to recycle waste heat and profitably reduce your greenhouse gas emissions. RED | the new green

23 Algunas consideraciones de política enérgéticaUna gran cantidad de países han incorporado a la cogeneración como una componente esencial de su plan energético y diseñado coherentemente políticas de promoción EEUU se ha planteado el objetivo de duplicar al 20% de su capacidad instalada de cogeneración en el año 2030 El Plan Estratégico de Energía de México plantea que la capacidad de cogeneración tiene el potencial de triplicarse hasta (de 3300 MW a MW) Como parte de su política de ahorro en el consumo de combustibles fósiles, la CE ha diseñado directivas globales para fomentar la cogeneración que representa alrededor del 10 % de su capacidad instalada. La dispersión entre países es muy alta (Dinamarca, Holanda y Finlandia con niveles que orillan el 50 %) y países importantes con niveles de un dígito. El objetivo modelizado es triplicar el ahorro de energía en 2030. RED | the new green

24 FIN RED | the new green

25 Electricity generation inefficiency is the elephant in the roomWhy does policy not focus on the source of 2/3’s of fossil CO2, or why the efficiency has not improved in five decades. Generation is the elephant in the room “I’m right there in the room and no one even acknowledges me” RED | the new green

26 Conventional Generation Recycling Energy is ProfitableCombined Heat & Power Recycling Energy is Profitable From energy and carbon, we turn to the generation of electricity and thermal energy for a simple reason: these two activities account for 2/3’s of the fossil carbon dioxide emissions, and the efficiency has not improved for five decades. RED | the new green

27 Recycling industrial waste energy Cokenergy Mittal Steel, Northern IndianaThree projects at Indiana Harbor Plant save ArcelorMittal U.S. $100 million per year You see Chicago’s skyline in the background, across Lake Michigan. At this plant, constructed in 1995, exhaust from 268 individual coke ovens boils water to produce 1.3 million pounds of high pressure steam per hour. The steam comes to the large building in the foreground to produce up to 95 megawatts of electricity, while sending up to 900,000 pounds of low pressure steam to the adjacent integrated steel mill. The project burns no incremental fossil fuel and has no incremental emissions of any air pollutant, including carbon dioxide. Each year, the project produces as much clean power as was produced by all of the grid-connected solar PV panels in the world in The project capital cost was $165 million, versus roughly $5 billion for the solar collectors. Such recycling is a cost effective way to produce clean energy RED | the new green

28 Waste energy recycling examplesWe now turn to three examples of bottoming cycle cogeneration that illustrate the range of potential, as well as the complexity of integrating such projects with industrial processes RED | the new green RED | the new green

29 Recycling glass plant waste energy to cut costsThis glass plant burns natural gas to melt sand at over 3,000 degrees Fahrenheit, and then cools the molten glass to produce plate glass, by rejecting the heat to the cooling towers shown at the bottom of the Google earth photo. RED | the new green

30 Butter plant needs low-grade thermalAcross the road is a dairy, also burning natural gas to make low pressure steam to produce powdered milk. RED | the new green

31 Using energy twice Saving money with clean energyTo profitably reduce greenhouse gas emissions, use the glass plant exhaust heat to boil water into medium pressure steam, generate some power, and then send low pressure steam across the road to displace the boiler fuel. RED | the new green

32 Silicon furnace, Alloy West VirginiaThis $250 million project will recover 65 MW and save silicon producer U.S. $18 million per year, with no capital outlay This is the top of a submerged-arc furnace that melts quartz and reduces the silicon dioxide to molten silicon. For 80 years, the hot exhaust has been dumped to atmosphere. RED is investing $84 million in the mill to reconfigure the hoods, capture the hot exhaust and produce steam to drive a 44 megawatt steam turbine generator. The five existing furnaces draw about 120 megawatts, and the project will recover over 40 megawatts, or one ‘recycled’ MWh for each three input MWh. The savings to Globe Metallurgical will allow them to open a sixth furnace and pull silicon manufacturing back from overseas. RED | the new green RED | the new green

33 Current silicon metal production360 MW Energy Input RED-WVA’s Project Design: RED | the new green

34 Existing exhaust cooling“Hairpin” heat exchangers air cool exhaust before the dust collectors Not needed for board RED | the new green 34

35 Silicon metal with energy recycling360 MW Energy Input 65 MW Clean Energy RED | the new green 35

36 RED’s Business Model Industrial host: RED supplies:Supply waste heat Purchases thermal energy and electricity from project, under long term contract RED supplies: Knowledge and capital Builds, owns and operates the energy recycling plant Open book, with profit sharing of actual results Contracts align host and RED interests to insure a long term partnership Host industry focuses on its core activities. RED | the new green

37 Conclusiones Recycling Mexico’s waste energy can:Profitably transform and modernize industry Benefit all electricity consumers and the economy Double generation efficiency while reducing all pollution, including carbon dioxide RED’s principals have enjoyed working with over 1,700 commercial and industrial customers over the past thirty years. We have learned much about how to extract value from otherwise wasted energy. We hope you will allow RED to work with your organization to recycle waste heat and profitably reduce your greenhouse gas emissions. RED | the new green

38 Conclusions Recycling Mexico’s waste energy can:Profitably transform and modernize industry Benefit all electricity consumers and the economy Double generation efficiency while reducing all pollution, including carbon dioxide RED’s principals have enjoyed working with over 1,700 commercial and industrial customers over the past thirty years. We have learned much about how to extract value from otherwise wasted energy. We hope you will allow RED to work with your organization to recycle waste heat and profitably reduce your greenhouse gas emissions. RED | the new green

39 Increases in world population and energy consumption 1850-2007Population up 430% Consumption per Capita up 760% Total Consumption up 4600% 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% Nuclear Natural Gas Oil Hydro Coal Wood 1850 1900 1950 2000 1850 1900 1950 2000 1850 1900 1950 2000 Source: Arulf Grubler (1998), BP Statistical Review of World Energy (2008), US Bureau of Census (2008) RED | the new green

40 90% of human greenhouse gas emissions during the past century100% 50% 0% Emissions of Greenhouse Gases from Fossil Fuels (cumulative, in MT CO2e) 90% GHG emissions since 1909 1979 Source: RED calculations based on data from BP Statistical Review and J. David Hughes, Geological Survey of Canada (ret.) RED | the new green

41 Summary Electricity-only generation is inefficient and inherently wasteful. Generating heat and power doubles efficiency and reduces industrial energy costs Recycled Energy Development offers to supply essential knowledge and capital RED | the new green

42 Columbia Ice Field, Jasper, Alberta 2007RED | the new green

43 Recycled Energy DevelopmentRED’s Mission: Profitably Reduce Greenhouse Gas But how make clean energy and save money? RED | the new green

44 How make clean energy and save money?This chart shows the cost of power needed to cover all of the costs and produce a market level return on investment for fourteen clean energy generation options. A line at $100 per megawatt-hour, equivalent to 10 cents per kilowatt-hour, shows the average retail price of power in the U.S. in Note that the options that use energy twice – that recycle normally wasted energy – can feasibly sell power at below the average retail price. All of the other clean energy options raise the price of power. * Includes T&D, line losses, backup generation and subsidies RED | the new green

45 Electricity-only generation is inherently inefficient, raises costsWastes energy Raises industry costs Increases pollution Inefficient generation U.S. Delivered Electric Efficiency Source: U.S. Energy Information Agency RED | the new green

46 Profitable clean energy for AIEM membersUse bottoming cycle CHP to recycle waste energy streams and earn added revenues from: Hot exhaust Flare gas Steam and gas pressure drop Use topping cycle CHP to provide base thermal loads with byproduct heat from electric generation New gas turbine generator, sized for thermal load Use exhaust to make high pressure steam, generate more electricity Extract low pressure steam to displace boiler fuel RED | the new green