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Presented by Tim Tawoda

ANNUAL FALL CONFERENCE; 2009

www.preon.com

Technology Basics: Micro Turbine, Absorption Chiller & Smart Grid

Micro Turbine “Muni” Drivers: Environment, Economics & Security

City Implementation of CHP (Cogen)City-Specific IssuesCase Study: Chicago PoliceApplying CHP City-WideHow Do I get Started?Q & A

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Small, light, self-contained Power Plant: 100 – 250 kW per MT – depending on Vendor

Fueled (primarily) by Natural Gas

Reliable, quiet and clean-burning

Similar to jet engine Value Proposition:

improves Environment, Economics and Security/Reliability

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3’ Wide

10’ Long

7’ High

Weighs 4,000 lbs

Turbine assembly weighs 200 lbs

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4

68 k RPM

Generator and Starter

Heat for Absorption Chiller or Boilers

Compressor

Turbine

Intake Air

Fuel

InverterBattery

Combustor

Rectifier

RecuperatorElectric Output

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Micro Turbine Exhaust is source of “free” energy for Absorption Chiller

Electric Utility Grid

Smart MetersDistributed Generation

Controls & Communications

Like Solar and Wind Power, Micro Turbines are a form of “Distributed Generation”

Reciprocating Micro Turbine

Electrical Efficiency 30% 30%; Increases to 37% with ORC (slide 26)

Thermal Efficiency 20% (50% total Efficiency)

50% (80% total Efficiency)

Air Quality 500 PPM NOx 20 PPM NOx

Noise 75 dB @ 15 M 59 @ 15 M

Maintainability 50 Moving Parts; engine re-build = 5 days

1 Moving Part; turbine replacement = 8 hours

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Reciprocating Engine Generators (also known as “Internal

Combustion” Engine Generators) vs Micro Turbine Generators

Traditional Power Plant Delivers 33% of Input Energy

MT CHP Delivers 50% + 30% = 80% of Input Energy

Traditional Power Plant Requires 2.42 X’s as much Energy: 2.42 X’s carbon footprint

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100%Fuel

45%Thermal

30%Electric

MT CHP = Micro Turbine Combined Heat & Power

Normal City Application: Utility Natural Gas (NOT “Renewable” Gas) as fuel source

*However, MT CAN Operate on “Renewable” Gas:

Bio Gas Digester Gas Landfill Gas Bio Diesel

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MT operating on coal bed methane @ 4,000 feet and -40 def F.

Why Natural Gas vs “Renewable” Gas for Cities? Natural Gas is readily available and consistent via Utility Gas Grids – HOWEVER, Technology Advances is changing this!

Bio Gas can be produced from Solid Waste via a.) Cellulosic or b.) Pyrolization gasification processes

Digester Gas can be produced from natural gassing at Waste Water Treatment Plants

Landfill Gas can be produced from natural decomposing of garbage at Landfills

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MT operating on landfill gas

Municipal Pyrolization Plants may be around the corner: solid waste converted to free energy

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Micro Turbines

Smart Grids allows City to aggregate all base load (“green” coal gasification plant) and supplemental Renewable Energies: Micro Turbines run on “syn” gas and methanol created by coal gasification plant: gas is blended with utility gas for redundancy/reliability

ARA: 10% of cost –Up to $200 per kW NYSERDA: 10-50% of capital cost ICAP: $66,000 per 1,000 kW (annually) State of New Jersey: $1000 per kW State of Oregon: $1000 per kW State of California: considering 2010 Fed Solicitations: NETL $500M Grants 13 States + DC consider Waste Heat as

“Renewable”

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ARA: Micro Turbines Operating on “Renewable” Gas or Bio Diesel qualify for 30% vs 10% ARA Grants

ARA = American Recovery Act = Federal Stimulus

http://www.dsireusa.org/ This Link Provides an Update on Grants, Credits and Subsidies State-by-State

NYC CHICAGOData Criteria

$6.0 $/MM BTU: Cost of Natural Gas Utility

$0.10 $/kWh: Cost of Electric Utility

$0 Accelerated Depreciation

($700,000) Fed, State & Utility Subsidy

$744,000 Annual Net Energy Cash Flow

19% IRR

$2.72M NPV

5.65 Payback

$7M Budget

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Data Criteria

$6.5 $/MM BTU: Cost of Natural Gas Utility

$0.220 $/kWh: Cost of Electric Utility

$0 Accelerated Depreciation

($500,000) Fed, State & Utility Subsidy

$232,982 Annual Net Energy Savings

130% IRR

$1,721,394 NPV

1.75 Payback

$1,000,000 Budget

Example: 200 kW CHP Plant: 2 x 100 kW Micro Turbines + 60 Tons of AC; Average Electrical Consumption: 150 kW

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Electric Utility Consumption decreased by 2.8% in 2009: USDOE

Electric Utility Cost INCREASED by 4.2% in 2009: USDOE

The Key to MT CHP Economics: Micro Turbines produce 2.72 X’s as much output energy as traditional power plants

Ideal MT CHP Cost Metrics: Expensive Electric Utility & Cheap Natural Gas Utility

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“US Estimated Gas Reserves have surged by 35%; US holds far larger reserves than previously thought. The jump is the largest increase in the 44-year history of reports from the committee”: Potential Gas Committee – Wall Street Journal 6-18-9

US Reserves increased due to Shale Gas deposits: technology advances makes gas @ 4,500’ depth viable

If Cities used Landfill, WWTP and Bio Gas: cost of energy is Zero $

TRADITIONAL POLICE STATION

Single Primary Power: Electric

Secondary Power: Diesel Genset

CHICAGO POLICE STATION

Dual Primary Power: Electric AND Natural Gas

Secondary Power: Diesel Genset

Potential Enhancements: a.) Secondary Power via Micro Turbine with LP (Eliminate Diesel Genset); b.) Redundant AC with Absorption Chillers

Lowers Stress on Local Electric Utility Grid

On a NATIONAL LEVEL, United States becomes less dependent (more SECURE) when utilizing renewable fuels (bio gas, digester gas, landfill gas and bio diesel ) OR CBM, Shale gas and domestic natural gas . CBM, Shale gas and domestic natural gas and LP, unlike oil and diesel fuel, is very plentiful.

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Micro Turbine CHP Plants

MT CHP Plants + Smart Grid provides the ultimate City Power Infrastructure

Security or Environ Criteria Met; Funding Alternative Made; City Consensus for MT CHP

City instructs Architect to embrace MT CHP; Architect allocates footprint and complies with LEED criteria

Architects instructs Spec Engineer to integrate MT CHP into Electrical and HVAC infrastructure

Spec Engineer works with vendors on equipment sizing and selection; Contract award based on “bid-spec” or “Performance Contract”.

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Mayors embrace CHP for Environment & Security merits

Energy Czar may be weak link; transient (political) position: gets promoted to different Department - by the Mayor

Mayor must transcend Czar disruption (promotion)

Energy Integrator: keeps the focus of Mayor/City agenda, Architect & Engineer - also facilitates the design

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Continuity of Energy Czar office/tenure varies greatly City-to-City. Many smaller Cities have no Energy Czar.

A forceful Mayor is Key Ingredient for CHP Implementation

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Expense Cultural Barriers Resource Constraints Short-term thinking Lack of collaborative spirit Lack of coordinated R&D b/w utilities and

vendors Lack of standards, definitions,

interoperability Unwillingness to deconstruct the paradigm Scope of Technology Change

Bottom Line: Comprehensive Smart Grids could take decades to perfect. However, CHP can accomplish key objectives of Smart Grids today: demand reduction, improved reliability/security and better economics. CHP can be integrated with the Smart Grid as it evolves

Issue MT CHP Response

High Utility Density: source of overloads and failures

MTCHP off-loads electric utility demand: improves reliability

High Citizen Density: impacted by environmental noise and pollution

MTCHP has no audible noise at property line and clean burning

High PC/Internet and Electric Vehicle Density: greater electric density

MTCHP off-loads electric utility demand: improves reliability

Utilizing CHP when there is no use for turbine waste heat?

Waste Heat can be converted to “free” additional Electricity via ORC

MT CHP must be Seamless to City Operations

Disruption to MTCHP output has no impact: parallels to electric grid

MT CHP can not be Administrative burden

MTCHP is automatically monitored by Energy Integrator

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Density of City Electric Loads Increasing: PC’s and Internet is 2.5% of US power consumption total but is doubling every 5 years: concentration is much greater in Cities. Electric Plug-in Vehicles require 8 kWh electric re-charge per 40 miles: 100 cars recharging in the building garage could increase the demand by 800 kW: 10-30% increase in demand.

East Coast Blackout on August 14th 2003: Problem could have been averted with less stress on the grid

During electric outage, buildings can operate if gas grid is up

LP (Liquid Propane) can power MTCHP if gas grid is also failed

Hurricane Katrina August 29th 2005: MT CHP could have provided electric power and cooling at time of crisis

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East Coast Blackout

TIME LINE MT OPERATING ON ROOF

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Each new Chicago Police Station will have a 100 kW Micro Turbine on the roof: total of 12 new Stations

Qty (1) 100 kW Micro Turbine – expandable to 2 MT: MT in parallel with Electric Grid; MT provides 90% of Electric Power Needs

Encorp Controls 350 kW Diesel Genset Commissioning 5-Year Service Agreement Utilization of Waste Heat: Boiler &

future absorption chiller Continuous Monitoring and Control of

Micro Turbine via Internet by Energy Integrator

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Electric Grid

Building Electric Load

Encorp Controls

Diesel Genset MT Genset

Natural Gas GridMT Turbine Exhaust to Boilers

Standby-Backup

GPC Gold Box

Internet

Future export of Diesel Genset Power via GPC, Internet and Smart Grid

Future Export Power

Engine Control/Monitor

Utility Relays PLC Logic & Network

Communications Local/Remote

Communications Interface

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Traditional ControlsSmart Controls

Encorp GPC (controls) replaces numerous mechanical relays with a single solid state controller: accommodates export of aggregate diesel gensets/buildings in the future via “smart grid”.

GPC

CHP requires viable use of waste heat: Often heating/cooling of building space

Typically requires 7 x 24 habitation such as Police Stations

How do we utilize the waste heat for other buildings – such as High Schools?

Calnetix Micro Turbines manufacturers Organic Rankin Cycle (ORC)

ORC converts waste heat from (4) micro turbines to 100 kW additional “free” electricity

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ORC

Expansion Module

Access to MT CHP Technologies Post-Factory Upgrades to Micro Turbines Application Engineering Project Management Commissioning Capabilities Continuous Maintenance and Monitoring of MT

CHP Plant

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A. Start with New Construction vs Rehabs: Easier to Move Lines on Paper vs Knocking Down Walls

B. Consider Police Stations: Smaller CHP Plants, Easy Use of Waste Heat due to 7 x 24 Habitation; Police Stations have need for Higher Security Benefit

C.Engage your Local Energy Integrator:

Thank You for Your Time!www.preon.com ; ttawoda@preon.com

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