Renewable Energy/Carbon Credits

U.S. Energy Services, Inc

&

Wenck Associates, Inc

Agenda

• Introductions

• Fundamentals

• Scope

• Results

• Recommendations

Accounting vs MonetizationAccounting• Quantify and report GHGs from all sources in an organization

(facility or enterprise)• Example: emissions reported to The Climate Registry

Monetization• Focus on ‘project specific’ GHG reductions or generation of

renewable energy (e.g. methane)• Reductions or creation of renewable energy must be certified and

credits can be sold (monetization)

How do we create GHG Value?

• 6 Major Greenhouse Gases– Carbon Dioxide– Methane– Nitrous Oxide– Hydroflourocarbons– Perfluourocarbons– Sulfur Hexafluoride

• Metric Ton of CO2 equivalent (Mton CO2e)

Monetize – Create and Exchange Environmental Assets for cash!

What is the Value?

• Average Price in 2009 – $4-$5.00 per Mton CO2e*

• Heavily dependent on “Quality”• What is Quality

– High Additionality– Co-Benefits– Offset Standard

• Buyer Motivation*Source: Voluntary Carbon Index, March-April 2009. New Carbon Finance 2009

$4.00

Project Overview

• Project Review– Additionality Review– Project Baseline

• Applicable Standards

• Determination of Credits Available

• Valuation– Renewable Energy

Projects Reviewed

• Metro Fluid Bed/Co-Gen

• Empire Flare

• Metro Diffuser Set Point

• Metro Diffuser Predictive Maintenance

• Blue Lake

• Algae Project

Market Look

• Not all reductions are created equal

• Practical hurdles to overcome– Cost– Buyer interest– Existing methodologies– Project Risk– Low carbon price

• Renewable Energy is a nice fit

Applicable Standards

Methodologies

StandardsMembership

Required

Methane capture and

destruction for Waste Water

Renewable Energy Fuel Switching

Energy Efficiency

Carbon Sequestration

Voluntary Carbon Standard

California Climate Action Registry In

Development

Chicago Climate Exchange

EPA Climate Leaders

Projects

ProjectSimple

Payback5 yr. NPV (5%

Disc. Rate)Algae Biofuel Production N/A N/AMetro Fuel Switch 1 year 179,036$ Metro Fine Bubble DO Setpoint 2.7 years 32,320$ Metro Co-gen 3.7 years 8,888$ Blue Lake Biogas too small (66,540)$ Empire Flare too small (75,040)$ Metro Diffuser Predictive Maint. (2) too small (90,922)$ Metro Diffuser Predictive Maint. (1) too small (118,634)$

Estimated Emissions Reductions MTons CO2e/yr.

-555.721,413.212,376.172,891.537,464.828,885.50

17,781.0020,440.00

Recommendations

• Additionality Review• Monitoring & Measurement• Early Action Credits• Standards Comparison• Current Methodologies• Project Type• Volume• Financial Sensitivity Analysis

Thank You

• Bob Peplin(763) 479-4220 work

(612) 799-5297 cell

bpeplin@wenck.com

• William Brown(763) 479-4212 work

(678) 548-4861 cell

bbrown@wenck.com

• Beau Griffey(763) 543-4683 work

(913) 488-5820 cell

bgriffey@usenergyservices.com