Energy & Water

New Oil | September 2011

The New Oil

04. Sugar=Energy | The new oil.

09. Renmatix | Turning wood waste to energy.

12. Energy & Water | Can’t live without each other.

17. Clean Water & Energy | Renwable & Desalination.

20. Origin Oil | Algae cleans utility’s carbon & produces bio-crude 24. Water Quality Trading | Cleaning the Ohio River.

28. Design | A swimming pool that floats in Hudson Bay. 30. Glossary | Water and energy policy terms.

Letter from the Editor

Eye popping. The politics of abundance.

This magazine was founded on the belief that the United States is the greatest engine for innovation in the world. Facing resource shortages and a universal desire for a quality of life that includes clean air and water, we believe that these are problems that industry can—an ultimately will—solve. We have dreamed of an economy of abundance, but have not seen anything that realistically showed how we might get there.

In September, we encountered several stories that changed our thinking dramatically.

First, a panel of very smart people talked about “the disruptive technology”: nonfood bio-crude, that has all the benefits of petroleum. Not a new concept, the panel of VC, Government and Industry leaders unveiled a process that could get to the scale needed to really fuel industries (pun intended). Next, we learned of two important utility-scale projects in Australia, one of which is creating bio-crude as a side effect of sequestering carbon.

These technologies aren’t magic bullets, but major wedges in the energy pie.

Growing new power industries takes time and investment. The underlying concerns about resource management must be addressed, along with a slew of infrastructure issues that take planning and cooperation between agencies, industry and finance.

As a nation, these technologies are a vision for a future that is reliant on robust industries that produce new products for markets at home and abroad, as well as an energy future that does not rely on imports. This is the vision to believe in.

We must engage—now—in uniting behind the idea of abundance, and the policies and programs that believe in, and support, that vision.

A. Tana Kantor

THIS ISSUE

The New Oil 04. Sugar=Energy | The new oil.

09. Renmatix | Turning wood waste to energy.

12. Energy & Water | Can’t live without each other.

17. Clean Water & Energy | Renwable & Desalination.

20. Origin Oil | Algae cleans utility’s carbon & produces bio-crude 24. Water Quality Trading | Cleaning the Ohio River.

28. Design | A swimming pool that floats in Hudson Bay. 30. Glossary | Water and energy policy terms.

THE GREEN ECONOMY September | 2011

BUSINESS GREEN

| TECHNOLOGY

SUGAR = ENERGY The Disruptive Technology for energy security is cheap, plentiful sugar.

John Doerr

As anyone who has seen a two year old with a candy bar can attest, sugar and energy are linked.

Here’s what the equation of sugar and energy means for the next generation of US technologies.

Many of the products we have come to depend on—plastics, synthetic fabrics, detergents and pharmaceuticals, as well as fuel—come from the sugars in Petroleum. That’s right: sugars.

A panel of industry leaders recently discussed “the next

crude”, bio-matter, at the opening of the Renmatix plant in King of Prussia, Pennsylvania. John Doerr, a Partner at Silicon Valley’s most innovative venture capital firm, Kleiner, Perkins, Caufield & Byers (KPCB), moderated the panel.

He opened by talking about IT (Information Technology), BT (Bio-Technology) and ET (Energy Technology). His sees ET as the largest market of the three, and Renmatix’s technology as the disruptive game changer.

Sun and Sugar The role that Renmatix can play starts with the relationship of sunshine and sugars. Although we think of sugar as the sweetener for food, it is nature’s way of storing energy. In plants, this energy is derived from the sun, through photosynthesis.

Partner Kleiner Perkins Caufield & Byers

John Melo CEO Amyris, Inc.

Vik Prabhu Industrial Biosciences Strategy Leader DuPont

Paul Bryan Head of Biomass Program, US Department of Energy

Over millennia, plant matter decays and forms petroleum deposits—in effect underground storage tanks. Drilling for oil taps that reservoir.

The extracted crude is refined for use as chemicals and fuel.

“Today’s American energy strategy is to borrow money from China, buy oil from the Middle East, and then burn it all across the country.”

Although all plant matter contains carbon, some is easier to extract than others. Cane sugar and corn provide very accessible sugars, and are used for creating biofuels, notably ethanol. The subsidies and supports for ethanol have created an industry that may be a contributing factor in food shortages. Renmatix technology is capable of breaking down the sugars in wood chips and other kinds of non-food bio-matter, which has the potential of creating a revolution in how products are created and energy produced. (see page 8)

Opportunity The panel discussed the opportunity literally lying around in the US. Billions of tons of bio-waste are available on forest floors, building up beside lumber and pulp mills, thrown away from grain production, in unused corn husks or the hulls of nuts. In a millennia or so, they will decay and become new petroleum deposits. However, speakers on the panel aren’t willing to wait that long.

John Melo, CEO of Amyris, is on the Renmatix Board of Directors.

Amyris, also backed by KPCB, refines bio-sugars into high-performing alternatives to petroleum based fuels and chemicals. At $0.12/$0.14 a pound, most of their sugar comes from Brazil.

Melo’s US facilities are responsible for thousands of jobs at his facilities and throughout his supply chain. To grow his company, all he needs is more

sugar, preferably created here in the United States, close to his teams of chemists and engineers. Every day, those teams create and test over two million “bugs”: that is enzymes that ferment sugars into products for Amyris’s products. But recently, Amyris had to temporarily put a plant on hold due to lack of supply from Brazil, not a lack of clients. Amyris has tested the Renmatix product, and is excited about the potential. As Melo said, “We need all the sugar we can get our hands on.”

Another member of the panel, Vik Prabhu, an Industrial Biosciences Strategy Leader at DuPont, echoed Melos remarks. Sorona®, a new DuPont fiber from bio-matter, is being used for clothing as well as automobile, commercial and residential carpets. Prabhu sees this is just the start of the direction that DuPont wants to go, to take advantage of a huge, existing and predictable market for products manufactured from bio-based feedstock.

Innovation Prabhu believes that the United States is still the leader in technological innovation. With over 650 biologists world wide, the company would like to make “everything” from bio-based sources. Each product that is developed will bring about a supply chain to source, extract, refine, manufacture, ship, store and sell those products.

A revolution in bio-sourced product means not only jobs for highly technical people, but a revitalization of rural areas. Doerr pointed out that a process for getting sugars from biomass would increase the value of the waste from many crops, particularly grains. In addition, companies like Renmatix are likely to locate near rural areas, close to their suppliers.

Paul Bryan, Head of Biomass Program at US DOE (United States Department of Energy) was equally excited about the future for an affordable bio-based sugar. DOE and the United States Navy are looking at Remnatrix’s process, hoping for a real solution to energy security. “This is really important. If we can do this, we really should,“ he said. He added that

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there are alternatives for automobiles, but there is a huge need for a reliable bio-based diesel that can be “dropped in” to the existing fueling infrastructure.

“No amount of raising taxes or cutting expenses will get us where we need to go without growth.”

Policy During the panel, Doerr put the $300 billion a year spent on imported fuel in blunt perspective: “Today’s American energy strategy is to borrow money from China, buy oil from the Middle East, and then burn it all across the country.”

Melo added that “No amount of raising taxes or cutting expenses will get us where we need to go without growth.” As Bryan noted, high petroleum prices makes bioproduct very competitive, which should encourage new enterprises to switch to Renmatix’s product.

But Melo believes that while many countries are “strategic” the US is not. The US is focused on “the next congress, or the next president”, a comment echoed in a talk after the panel by Pennsylvania’s Governor Tom Corbett. By strategic, Melo was referring to countries that have a national policy to support new energy industries. Famously, sun impaired Germany has grown a robust industry in solar, Brazil has invested $50-$60 billion in sugar production and China has invested as much as $10 billion in a single solar panel manufacturing company. Such investment has affected the competitiveness of companies in the US. Solyndra, now a national scandal, produced solar panels in the US, but was consistently outbid by product from China. While programs exist within a variety of US Departments, including Defense, Agriculture, Energy and Transportation, a national policy would help coordinate these efforts into a unified, predictable process.

Bryan has seen the $1 Billion in ARRA (American Recovery and Reinvestment Act) funds and the $200 million a year from DOE, attract private capital. As he says, investment “flows when reassured on risk and technology”. Much like a bank that is reassured when a homeowner puts a significant down payment on a mortgage, private capital is reassured by loan guarantees, grants and tax equity that reduces their risk.

Doerr would like to support for R&D—Research and Development. Bryan agreed, noting that the first roll out of any product is unlikely to be as economical as later processes, so that support for early innovation is critical.

Financing All members of the panel saw the future for a bio-based product that could replace the current reliance on petroleum products, and the role of Renmatix’s process to break down and produce the raw materials from waste bio-mass.

But energy—including the whole industry of finding and refining sugars—isn’t easy. As Melo said, “easy isn’t always the best.”

“Four or five years ago, VCs were looking at energy.

But today, it’s more like, ‘Energy is really tough. Let’s do this social stuff. That will be easy.’” He added that all the advertising in the world won’t get close to the market for synthetic rubber alone. Ironically, since the advertising that fuels social media is dependent on successful business with money to spend, innovation in energy may well grow social media as well.

Renmatix may well have found the disruptive technology that will release us from reliance on petroleum. If so, it could usher in an era of unexpected prosperity should we just grasp the opportunity. n

@

KPCB Amyris US DOE Biomass DuPont Bio Program

= Sugar Building an Industry in Pennsylvania.

Tom Corbett Governor Pennsylvania

Mike Hamilton Imagine a pressure cooker: the combination of pressure and heated water breaks down fibers, cooking meat or potatoes faster. In a similar process— what chemists call supercritical hydrolysis—Renmatix breaks down non food biomass and creates the sugars that are raw materials for fuel and chemistry.

“At a very fundamental level you take the biomass [in this case woodchips] and put it into a fluid, and you raise the pressure and temperature in a very controlled way, to a very precise point, for a very precise amount of time, and

then magic happens. You get the constituents out, and the pieces that fall out are not something indigestible, like a wood chip, but sugars that are very valuable.”

That is how Bill Joy, Partner at KPCB and current observer and past board member of Renmatix, describes the process, which Renmatix calls the Plantrose Process.

CEO Renmatix

Fred Moesler VP of Process Technology Renmatix Bill Joy, PhD Partner, Kleiner Perkins Caufield & Byers

Processing

Bio-Crude

Shipment

By supporting the Renmatix plant, Corbett sees the opportunity to grow a world class industry that will create jobs and take advantage of the entrepreneurial energy and innovation throughout the state.

cost effective solution.” John Melo, CEO of Amyris, one of the Renmatix’s future customers and a member of the board of directors, likes the process because it’s simple. He notes that this isn’t the only attempt to turn cellulose into its component parts, but the elegance of the process holds the promise for getting to scale.

10

Fred Moesler, VP of Process Technology, adds, “Lots of very interesting things happen when you go supercritical. Cellulose becomes soluble.”

The irony of Renmatix building a plant in Pennsylvania that is emblematic of the potential for new energy is not lost on Governor Tom Corbett. He notes the history of Pittsburgh as an early energy leader, and the large deposits of both natural gas and coal that make Pennsylvania the second largest energy field in the world.

As Corbett notes, the key to the Renmatix future is affordable, available sugars for a variety of industries. “[It] intuitively sounds expensive,” said Moesler.

“But with a good fundamental technology like supercritical fluids and a good engineering design, you find the proper ways to harness excess energy back in the process to make a

Amyris’s engineers and chemists have tested Renmatix’s product and are very excited to see the planned 100,000 tons a year that the plant will produce. n

Non-food cellulose and water are combined to make a biomass slurry.

The slurry is then heated and fractionalized, so that water and solids can be separated.

Hydrolysis breaks cellulose into components.

Water is returned to the start. The process recycles 75%-80% of the water used.

Solids and liquids are separated, producing C6 (biocrude) and Lignin.

Lignin is returned as fuel to the system.

@

PA Gov. Tom Corbett Renmatix Web Renmatix Animation

11

SouthWest US 2011

12 Month Drought Levels

80%

Texas, Louisiana, Oaklahoma, Arkansas, Mississippi, Tennessee

70% 60%

Moderate

50%

Severe

40%

Extreme

30%

Abnormal

20% 10% 0%

9/14/10

1/1/11

6/21/11

http://droughtmonitor.unl.edu/DM_south.htm

9/20/11

The Nexus of Energy and Water What if the ocean could become water for the farm?

Or a new bio based fuel could clean water?

These technologies are not future speak, or ideas generated in China or Brazil. They have been created and, in some cases, financed by, US innovation. Yet many are deployed in other countries, while back at home we thirst for the ideas that have been created and developed in the United States.

Water and energy are inexorably tied together. Thermal power plants use water for steam to drive turbines and cool exhaust, consuming as much as 43% of U.S. water (see chart next page). In addition:  Hydropower uses the kinetic energy of falling water  Geothermal circulates water through underground tubes  Fossil fuel production injects water into conventional oil wells to increase production  Oil extracted from unconventional resources, such as oil shale and tar sands, is very water intensive

13

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In turn, power is needed to pump, distribute and clean water. Large-scale sea or brackish water desalination is being implemented in Tampa, Florida, and is planned for sites in California, Texas, Utah and Hawaii. Such efforts require significant amounts of energy, which, ironically, requires significant amounts of water.

from power plants has become a problem for utilities. Georgia Power lost a bid to draw water from the Chattahooche River, Idaho has denied water rights requests for several power plants, and a Pennsylvania nuclear power plant is planning to use wastewater from coal mines. A nonprofit is working with utilities to develop a clean water trading for the Ohio River (page 24).

Desalination Australia, which has seen the same kind of drought that plagued the South West, has been taking aggressive steps to meet their future water needs since early 2000s.

In 2006 they opened a reverse osmosis plant powered by renewable energy, and are planning another one supported by GE Financial Services and First Solar. (see page 16).

Water Availability

Growing populations and changing expectations in emerging countries alone will increase demands for clean water.

In China, some rivers are too dirty for industry, let alone to drink.

Yet the largest percentage of water in the world is in the oceans, meaning that desalination is likely to be increasingly important, regardless of future climate changes..

Water Wars Water is already generating conflict across the Middle East and Asia. At home, disputes are ranging across the United States. California’s allocation of Colorado River water has been reduced because competing urban, agricultural and environmental interests could not agree on a conservation plan.

Water rights issues have also sparked between Virginia and Maryland, Virginia, North Carolina, and Georgia, and Florida and Alabama.

As pressure mounts from local, state and federal agencies, cleaning the nutrient rich, heated water

Energy & Water Risk For companies, especially those with off-shore manufacturing or other interests, water regulations and restrictions will become a major factor. As pressures mount on companies to clean their supply chain, reporting on water use and quality will mount.

Cities facing economic stresses are changing water policies, charging more for services and adding new taxes to cover storm water management, sewage and other issues. These stresses constitute risks, but also opportunities. As utilities, like those along the Ohio River (see page 24), are getting ahead of the curve by supporting water quality efforts and education, their approaches may well turn into opportunities for the business sector. n

Perth Seawater Reverse Osmosis Plant, November 2006. Located at Kwinana, some 25km south of Perth in Australia, the plant is the largest of its kind in the southern hemisphere and the biggest in the world to be powered by renewable energy. Ultimately supplying 17% of Perth’s needs, the plant will be the largest single contributor to the area’s integrated water supply scheme and provide an annual 45GL, to help serve the 1.5 million population.

Water Usage in the United States

15

BUSINESS GREEN

16

| WATER & ENERGY

Clean Water + Solar Energy Australia’s First Utility-Scale Solar Photo Voltaic Project is under way—and it will help meet Western Australia’s water security issues by fueling a much needed desalination plant.

A utility scale desalination plant uses utility scale solar energy.

A joint effort funded by Australia’s Verve Energy, GE Energy Financial Services and the Western Australian Government, the 10-megawatt project will use PV modules by First Solar, based in Tempe, Arizona. Output from the 10-megawatt AC project, on 80 hectares (about .3 square miles) of cleared land, will contribute to offsetting the energy requirements of the Southern Seawater Desalination Plant (SSDP).

that at least half of the water needed for the Perth metropolitan area will be supplied from climate independent desalination and this will provide security to water supplies even in the driest of years – in both the short term and long term.

The plant is being built because Western Australia can no longer rely on rainfall to power dams.

Last year only 13 billion litres flowed into the dams, which is a fraction of the volume of water needed to meet supply. This year has seen around 13 billion litres of inflow with the winter months two thirds over. Normally they would expect around 36 billion litres by this time of year.

The Western Australia Water Company release about the Southern Seawater Desalination Plant expansion, announced

In order to meet the energy demands of desalination, Western Australian state-owned power utility Verve Energy and GE Energy Financial Services will each own 50 percent of the Greenough River Solar Farm. The Western Australian Government is providing A$20 million (about $21.3 Million US as of 8/31/11), including A$10 million from the WA Royalties for Regions program. The Western Australia Water Corporation, which is building the Southern Seawater Desalination Plant, has committed to purchase 100 percent of the solar farm’s output.

The result is that no debt will be raised to fund the project.

150,000 Solar Panels First Solar has agreed to supply the project with over 150,000 of its

advanced thin film photovoltaic (PV) modules and provide engineering, procurement and construction services, in addition to operations and maintenance support once the solar farm is operational.

“This demonstrates the significant potential for renewable energy generation—especially utilityscale solar in Western Australia and throughout Australia,” said Jim Brown, President of the Utility Systems Business Group for First Solar. “We’re pleased to bring our expertise in advanced PV technology and utility-scale solar deployment to Verve Energy and GE Energy Financial Services to deliver this ground breaking project.”

Taking advantage of the area’s vast dry, flat and sunny conditions, the solar farm will be the first utility-scale PV project in Australia, 10 times larger than any other operating solar project in the country. The agreement is subject to the satisfaction of certain statutory requirements.

Verve Energy Strategy and Business Development Manager, Tony Narvaez added: “The solar farm is important for Verve Energy, for Western Australia and for the local renewable energy sector.

It enhances Verve Energy’s reputation as a renewable energy innovator.”

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For GE Energy Financial Services, the project represents its first renewable energy investment in Australia, adding to its global portfolio of more than US$400 million of solar power equity and debt investments in 42 projects.

“This transaction enables us to apply our renewable energy investment expertise to a new market, add to our portfolio of projects with First Solar and to GE’s broader work with Verve Energy,” said Jason Willoughby, GE Energy Financial Services’ Australia business leader. “This project also will support GE’s ecomagination program, in our aim to help customers meet their environmental challenges.”

Jobs & Carbon Providing clean, affordable and sustainable energy to partially power the Southern Seawater Desalination Plant, near the town of Binningup, the solar project is expected to create more than 50 construction jobs. The project, which will produce energy when it is most needed—during the day—will displace 25,000 tonnes per year of greenhouse gas emissions, the equivalent of taking 5,000 cars off the road.

The state’s primary supplier of water, wastewater and drainage services, the Water Corporation, will purchase the power generated by the solar farm for the Southern Seawater Desalination Plant under a 15-year contract.

The plant will produce about 50

gigalitres of potable water per year. The project will boost Western Australia’s share of the Federal Government’s renewable energy target of 20 percent by 2020.

The Partners About First Solar First Solar manufactures solar modules with an advanced semiconductor technology and provides comprehensive photovoltaic (PV) system solutions.

From raw material sourcing through end-of-life collection and recycling, First Solar is focused on creating cost-effective, renewable energy solutions that protect and enhance the environment.

When the expanded plant is complete, at least half of the water needed for the Perth metropolitan area will be supplied from climate independent desalination. This will provide security to water supplies even in the driest of years—in both the short term and long term.

About Verve Energy Verve Energy is the leading generator of electricity in Western Australia. Verve Energy owns and operates an extensive and diverse portfolio of power stations and renewable energy systems with a total capacity of 2,967 Mega Watts.

About GE Energy Financial Services GE Energy Financial Services’ experts invest globally across the capital spectrum in essential, long-lived, and capital-intensive

energy assets that meet the world’s energy needs. GE Energy Financial Services offers the best of GE’s technical know-how, technology innovation, financial strength, and rigorous risk management. The GE business unit helps grow new investments, strong partnerships, and optimization of its approximately US$20 billion in assets. n

19

BUSINESS GREEN

20

| WATER & ENERGY

Scaling Algae In Australia, a project that sequesters carbon is creating the next generation in petroleum replacement.

The Tarong Power Plant, in Queensland, Australia, must reduce carbon emissions from their stacks to meet current and future utility standards. In an unusual partnership, the power plant hired MBD Energy to grow algae in order to sequester CO2.

MBD Energy then turned to Origin Oil, a US company based in Los Angeles, California.

Origin Oil has a process to harvest the algae, and then extract commercially valuable replacements for energy, and chemicals for pharmaceuticals.

Origin Oil

Riggs Eckelberry on site in Australia, and at right.

Origin Oil doesn’t make anything: they invent solutions. As Riggs Eckelberry, the charismatic CEO says, “We’re not focused on producing or manufacturing.

We imbed our technology into facilities being built for the massive use of algae.”

Riggs sees Origin Oil’s technology as the “killer app” of carbon capture. “Algae loves to attach itself to things. This is what it does,” he says.

Origin Oil has two products that were especially valuable to MBD:

Algae can also be very valuable to mining companies, because it can grow in brackish or nutrient loaded water. Origin Oil’s process produces clean water and “algae crude”: a valuable petroleum replacement. Ideally, a mining company could reduce their energy costs while cleaning their water.

 Quantum Fracturing™ a technology that injects CO2 and nutrients into algae culture.  Single Step Extraction™ for continuous, highly scalable, chemical-free dewatering and cell lysing (decomposition).

On the potential for algae at utlity scale in the United States, Riggs is not optimistic. “I’ve been in Australia, Europe, China, where it’s all the rage. But it’s not happening in this country because we can’t seem to make up our minds to get rid of carbon.”

CITIES: Thinking to Scale October 2011 Story submissions: editor@theGreen Economy.com Advertising: sales@theGreenEconomy.com

Origin Oil Tech + MBD Al 22 Harvest

Sequester and grow

Inject CO2 from stack into algae culture.

Tarong Power Station, Queensland Australia

Clean, brackish, or high nutrient load water

Recycled H2O

lgae + Tarong Emissions Extraction, dewatering and cell decomposition

Clean water

Bio “Crude�

Product sold for fuel and chemicals

Queensland Project Timeline - Getting to utility scale James Cook University research - done (5,000 m2) Tarong Energy display plant - in progress (1 Hectare: 2.47 acres) Pilot plant (30-90 Hectare)

23

Demonstration plant (500+ Hectare)

@

Origin Oil MBD Energy Tarong Power Plant

ransitions T Water quality trading is coming to the Ohio Basin.

In 1952, the Ohio River caught fire. This year, the two biologists who check the river daily, Jeff Thomas and Rob Tewes, expressed optimism. “The Ohio River quality is drastically better than it’s been,” Thomas said. “We’ve made great strides over the past 50 years.”

O

ne of the continuing problems is that power plants, which installed scrubbers to remove SOx (sulphur oxides) and NOx (nitrogen oxides) from their stacks, clean those scrubbers with water, which can be discharged into the Ohio River.

As the utilities look to solve this problem, they face a twofold issue: what to do right now, and what to do in the long term. The long term is technical: capture, store and take away; biochemically break down nutrients; or reduce pollution before it gets in the pipe. But these technologies are new and take time. Some are being tested before being deployed across the country, while others are still on the drawing board.

EPRI (Electric Power Research Institute) has been looking at the Ohio River as a whole for several years, analyzing the issues and searching for an innovative way to reduce nutrient levels in the near term. Jessica Fox, Senior Project Manager, has been leading this effort in collaboration with power companies, federal and state agencies, agricultural organizations, academia, the private

sector and industry organizations. The result is Ohio River Water Quality Trading.

F

ox and her team created a market mechanism to reduce pollution, help the utilities meet current and future water quality regulations, and support efforts by the many ecologically innovative municipalities along the river.

EPRI could foresee an ecological uplift, with significant community benefits, by using funds from utilities and then teaming up with land owners and farmers along the river’s edge. In addition to supporting existing local initiatives, such a plan could incent landowners to create buffer zones by replanting forests between urban and suburban areas, and encourage farmers to reduce the use of fertilizer. They decided on a clean water trading mechanism beginning with a pilot project to test the idea, work out problems and be sure of the monitoring protocols.

Clean Water trading is similar to carbon trading: the entity (farmer, landowner, municipality) provides a measurement methodology to show the benefits in nutrient reduction of their actions. The state DEP (Department of Environmental Protection or similar agency), along with state agricultural reps, state

conservation nonprofits and the permitting authority for the power plant review proposals and monitor progress. Project principals submit a plan, and the agencies approve the crediting methodology and let principals know how many credits they will receive.

Once approved, unique codes are generated by EPRI for each credit, so that they cannot be double counted. The utilities then purchase credits, balancing the amount needed to offset their own emission.

Since any project with complex aims—particularly one that involves the ecosystem­—has uncertainty, EPRI put in place plans to offset risks. They include:  Aggregate several sources—projects— to minimize monitoring and administrative overlap.  Generate, at a minimum, twice as many credits as technically needed, in order to achieve the needed water quality benefit.

The over-targeting is intended to balance projects that do not meet goals set by the project principals.

If the results do not match the expected nutrient reductions, the credits will be retired—that is not sold to a utility. If there are more verified credits, than the utilities can use, those additional credits

25

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here are many advantages to the program as a model, ranging from lessons to be learned, and unintended benefits. One of the latter is that the program has been bringing together community groups, utilities, landowners and municipalities to share in the discussion about their watershed.

Ms. Fox said that she was surprised by the common vision that was emerging about the future of a very important shared resource.

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ince any plans for the Ohio River basin will lead to changes in 15 states, the project is providing a road map for the interstate cooperation needed to for any broad based environmental remediation.

Ms. Fox went on to add that nutrient loading is a huge issue globally, due to excessive emissions from anthropogenic activities: industry, sewage treatment plants, agriculture and other kinds of waste. In the US, the Chesapeake Bay has nutrient loading that will have to be addressed, while there are dead zones in the gulf of Mexico where fish and plant life cannot survive.

For power plants, this program does not let them “get off scot-free” by just paying and continuing to pollute.

Each utility has two sets of limits: a technology based effluent limit that must be engineered, and a water quality effluent limit, which can be met with solutions other than technologies. It is the second the set of limits that the EPRI pilot program can address.

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Beyond that, she sees the potential for “credit stacking”: that is creating clean water and carbon credits from a single project. She sees the great potential for this project to show how various management systems can work.

She concluded by saying that after the first round of pilot trades, EPRI will do an assessment and make recommendations. The long term plan is to transfer the management to a fully transactional marketplace. n

@

EPRI EPRI Water Quality Trading Abstract

27

Design

28

| WATER PARK

Diving into the East River: A Pool that Floats A Brooklyn duo designed a pool that sits like a giant sieve in the New York City harbour.

The two firms, DongPing Wong from FAMILY Architects and Archie Lee Coates IV and Jeffrey Franklin of PlayLab, aren’t just designing, they are on track to build their grand idea.

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heir plan is for a pool that filters out the “bad” water, at a rate of once every half hour—the New York city requirement for public pools. The team is looking at the potential for the river current to power it.

the Plus Pool team out to lunch and then volunteered to help with the engineering. After a winter where they studied water quality, structural configurations, energy use, site potentials and the filtration system, they concluded that the project was, in fact, feasible.

The international engineering firm, Arup, dove right in when they heard about the idea.

Arup projects include the 2008 Bejiing Olympics “Water Cube”, California Academy of Sciences in San Francisco, JetBlue’s Terminal 5 at JFK International Airport, and the redevelopment of New York’s Lincoln Center,

more conventional pair might have formed a corporation, looked to raise millions, and spent millions doing it. But Family Architects and PlayLab went a different route, starting a campaign through KickStarter. com, a non-profit. Projects raise money though the site, but only receive it once their goal is reached. They promise that IF they reach their goal, THEN they

After hearing about the project from the team’s initial outreach through social networs and a mailer, a team from Arup took

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will give tokens (such as mugs or other memorabilia) to each of their contributors.

1,200 people contributed $41,647 of the $25,000 that they intended to raise. The funds allowed the team to complete the first round of tests, and to have initial talks with “every city official we can”, said Coates. They are working toward construction docs.

The next step is to work with engineers, planners, officials and swimmers to assess the project’s bureaucratic challenges. In addition, they are testing materials and refining the design to establish the best systems and methods for Plus

Pool. Coates said the goal is to refine the performance and quality of the pool to meet or exceed community, city, state, and federal requirements for swimming pools.

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tarting in June when they launched the project, there was a flood of interest from New Yorkers: swimmers, designers, engineers and community organizers.

To build the full filtration assembly, however, they will need $250,000 and a full-scale mock-up will require $500,000. The

aim is to get the pool into the water by summer 2012.

Craig Covel, principal at Arup, said: “Is it really going to happen? Yes, of course it is, but we all need to get behind it. We need to make sure that we have people not only on the technical side but also from the government side for the permits and approvals. We’ve got the community saying yes they want it, but we need to get all of those other aspects behind it and then it will become a reality.” n

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PlusPool PlayLab FAMILY Architects Arup

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glosssary RPS CES

PPA

Feed-In Tariff

CAFE

RECs and SRECs Renewable Energy Certificates (RECs) and SREC’s (Solar Renwable Energy Certificatespronounced es-rehks) are tradable energy commodities representing one megawatthour (MWh) of electricity from an eligible renewable energy resource. Traded on the state level, the consumer receives a certificate, verified by a certifying agency which gives each REC a unique identification number. The green energy is then fed into the electrical grid (by mandate), and the accompanying REC can then be sold on the open market.

PPA Power Purchase Agreement is a contract between an electricity generator, such as a wind or solar project, and an energy buyer, such as a utility. A PPA incents renewable energy investors, who are guaranteed a set rate at which power will be purchased from their installation, and for how long. This guaranteed income lowers the cost of capital for financing projects. The utility can use the PPA to conform to mandated renewable energy standards. Since utilities generally expect rates to rise over a period of time, energy purchased through a PPA may be sold to utility customers at a higher price as the PPA ages.

Feed-in Tariff A Feed-in Tariff (F.I.T.) is a policy mechanism set by a government, which fixes the prices to be paid by a utility to a renewable producer. As opposed to PPAs, which are negotiated between utility and energy developer, this is a long-term tarriff typically based on the cost of generation for different types of technology. The contract can include a “tariff degression�, which ratchets down the price over time in order to encourage technological cost reductions. While feed-in tariffs have encouraged markets for renewable energy, occasionally they have lead to higher prices because overproduction, which cannot be integrated into the existing infrastructure, must still be paid for by the utility.

CAFE Corporate Average Fuel Economy (CAFE), first enacted by US Congress in 1975, is intended to improve the fuel economy of cars and light trucks sold in the US in the wake of the 1973 Arab Oil Embargo. If the average fuel economy of a manufacturer’s annual fleet of vehicle production falls below the standard, the manufacturer pays a penalty.

CAFÉ standards are regulated by The National Highway Traffic Safety Administration (NHTSA) and measured by the US Environmental Protection Agency (EPA).

Energy Star Energy Star is a joint program of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE). It provides an eco-label for purchasing products that use less energy and prevent greenhouse gas emissions. First created in the United States, Energy Star has become an international standard for energy efficiency consumer products. The label can now be found on new homes and commercial and industrial buildings.

RPS Renewable Portfolio Standard (RPS) is a state regulation that requires the increased production of energy by electric utilities from renewable energy sources, such as wind, solar, biomass, and geothermal. Certified renewable energy generators earn certificates for every unit of electricity they produce and can sell these along with their electricity to supply companies. Supply companies then pass the certificates to some form of regulatory body to demonstrate compliance. Because it is a market mandate, the RPS relies almost entirely on the private market for its implementation.

CES Clean Energy Standard, unlike an RPS, includes nuclear, carbon capture and sequestration (CCS), and “clean coal” technologies. Recently, there has been a move to adopt national CES as proposed by the Obama administration.

Carbon Intensity Carbon intensity is a measurement of the percentage of GHG (green house gas) emitted into the atmosphere. When used to set future targets, intensity is a relative marker. For example, if a country produces an output of 20% GHG (say 100 tonnes), when doubling the amount produced with the same technologies, emissions will still be at 20% of the total, although the country is now emitting 200 tonnes. Meeting a 20% target proves that the current technologies have not gotten worse, although the overall GHG in the air has risen. As a result, intensity targets are often used as benchmarks by emerging nations expanding their use of energy and fuel.

Carbon Total Carbon total is the total amount of GHG produced. For example, if a technology produces 100 tonnes of GHG (Green House Gas), equalling an emission of 5% of all GHG emissions, then, when doubling the amount produced, the total emission of GHG into the atmosphere will also have risen. The percentage of overall GHG will be higher unless balanced by an equal or greater reduction from another source. As a result, carbon totals are often used as benchmarks by developed nations planning to reduce their use of energy and fuel.

1603 Tax Grants 1603 Tax Grants are payments for specified energy property in lieu of tax credits to support eligible renewable energy projects. What this means for investors is that up to 30% of project capital costs are eligible for grant funds, if those projects are placed in service or started before specific dates.

PTC Federal Production Tax Credits provide a 2.2-cent per kilowatt-hour (kWh) benefit for the first ten years of a renewable energy facility’s operation.

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